The directors announce the unaudited consolidated financial statements for the 2012 half year that were authorized for issue on February 9th 2012. The trading result for the six months to December 31st 2011 is a profit after tax of NZD 6.4 million. This is a decrease of NZD 2 million or 24% compared with the same period last year, and in line with previous guidance.
Sales increased by NZD 12.5 million or 7% to NZD 202.9 million. However margin pressure resulted in a reduced overall trading result. The net tangible assets per share at December 31st 2011 were NZD 1.47 compared to NZD 1.45 at December 31st 2010.
Industry activity levels saw no appreciable change from the prior year. Notably demand in Auckland was very subdued across all product categories, particularly during September and October, with November seeing some improvement.
Although the key sectors of residential and non residential construction, along with metal related manufacturing remained subdued, this was marginally offset by improvements in the rural sector. The ongoing uncertainties throughout the world continue to impact business sentiment, generally resulting in a cautious approach.
Company officials said that "Our Christchurch operations and people continue to demonstrate considerable resilience as they deal with the ongoing earthquakes and aftershocks. There had been early signs that some rebuild activities were commencing, however the ongoing seismic activity may further impact the rebuild schedule. Volatility in global raw material prices, finished steel prices and in the New Zealand dollar has led to increased volatility in domestic steel prices. This increased volatility along with inventory lead times is creating a more dynamic and challenging pricing environment for steel manufacturers, distributors and customers alike. In addition, the subdued demand led to some manufacturers and distributors being prepared to discount prices early, resulting in significant margin pressure. Prices were increased late in 2011, reflecting international pricing, to reduce the continuation of the margin decline."
They added that "At Steel & Tube, we remain focused on delivering initiatives that focus in improving customer service and growing the company. The One Company approach has resulted in improved sales as the new operating model gains traction. The new and exciting brand was introduced to our customers and staff in July and re branding was completed in September. Work continues to refresh other parts of our business, which includes upgrades to numerous facilities over coming periods as we continue with the facility rationalization program. Additionally our focus on costs, debtors and inventory management, position the organisation for the environment ahead."
They aid that "Health and safety remains a top priority. Good progress is being made in addressing higher consequence safety risks and although the number of medical treatment injuries is higher than last year, none of the injuries were of a serious nature."
