Steel & Tube Holdings Limited Analysis

Overview

Steel & Tube was formed in 1953 and listed in 1967. It is now one of New Zealand's leading providers of steel solutions, allowing access to the widest range of steel products in the market, through its nationwide network of distribution centres. The company distributes and processes a range of steel products and operates through two divisions - Distribution and Infrastructure - and offers an end to end customer experience, advising, sourcing and supplying customers with their steel requirements.

The acquisition of complementary businesses over the years has led to Steel & Tube owning a portfolio of strong heritage brands. The company is focused on delivering quality service and products, safely to customers.

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Today, Steel & Tube operates in the New Zealand market, primarily in the construction, manufacturing and rural sectors.

Performance

The following information was extracted from Steel & Tube Holdings Limited's Full year Results, released on 25 August 2025

Steel & Tube Holdings Limited (NZX: STU) has reported its audited results for the 12 months ended 30 June 2025 (FY25).

$m / FY25 / FY24 / Variance

Revenue / 385.4 / 479.1 / (93.7)

Volume (Ktonnes) / 101.7 / 115.5 / (13.8)

GM$/tonne / 688 / 901 / (213)

EBITDA / (2.5) / 31.4 / (33.9)

Normalised EBITDA / 2.1 / 35.8 / (33.7)

EBIT / (26.0) / 9.6 / (35.6)

Normalised EBIT / (21.4) / 14.5 / (35.9)

NPAT / (24.4) / 2.6 / (27.0)

Net operating cashflow / 10.4 / 42.2 / (31.8)

The challenging economy in FY25 impacted demand for steel and affected volumes and average selling price. Sales revenue was down 20% to $385.4m, driven by a 12% drop in volumes as well as product mix and pricing pressure, exacerbated by aggressive pricing from some competitors. An improvement has been seen in 2H25 daily volumes and sales, off a low base.

Volume and pricing impacts flowed through to a decrease in FY25 earnings. Normalised EBITDA remained positive at $2.1m1, although was lower year on year. Including non-trading adjustments of $(4.6)m2, EBITDA was $(2.5)m, with EBIT of $(26.0)m. The company reported a net loss after tax of $(24.4)m.

Gross margin remains a priority and the strategic focus on higher value products and services, pricing discipline and cost control will provide upside as activity returns. Product margins were 28.1%3 (FY24: 29.8%) and gross margins were 18.1% (FY24: 21.7%). Margin recovery is expected as volumes improve and capacity is better utilised

The ongoing cost out programme delivered approximately $7m in annualised direct and operating expense savings (FY24: ~$5m), more than offsetting inflationary pressure. Inventory continues to be managed prudently, with yearend inventory of $113.6m, including $5.9m related to the new galvanizing business (FY24: $121.3m).