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Highlights

  • STU’s revenue fell to NZD 196.0 million in 1HFY25, reflecting reduced customer demand.
  • Net operating cash flow jumped to NZD 23.1 million in 1HFY25.
  • STU inked a conditional agreement to acquire Perry Metal Protection, Perry Grating, and Waikato Sand Blasting.

Steel & Tube Holdings Limited (NZX:STU) is an NZX-listed company that provides steel solutions across New Zealand. In the six months ended 31 December 2024 (1HFY25), STU’s revenue declined to NZD 196.0 million, compared to 261.8 million in the same period last year, reflecting softer customer activity and reduced demand across all sectors. Volumes also fell to 48.7 Ktonnes, compared to 62.6 Ktonnes in 1HFY24. EBITDA in 1HFY25 dropped sharply to NZD 0.6 million, compared to NZD 21.2 million a year earlier.

However, Steel & Tube’s proactive cost management strategies helped the company generate NZD 23.1 million in net operating cash flow, a significant improvement from NZD 3.5 million in 2HFY24. While Net Profit After Tax (NPAT) in 1HFY25 was a negative NZD 10.4 million.

Strategic Acquisition of Perry Metal Protection

Steel & Tube signed a conditional agreement to acquire Perry Metal Protection, Perry Grating, and Waikato Sand Blasting, with the deal expected to close by May 2025. Perry Metal Protection is New Zealand only ISO-certified hot dip galvanising business.

The total acquisition price stands at NZD 43.5 million, with an additional potential payment of up to NZD 6 million based on the assets' financial performance over a 2–3-year period post-acquisition.

Outlook: Poised for a Turnaround

“While market conditions remain tough, we are starting to see increased customer enquiries and tenders,” said Mark Malpass, chief executive of the company. “We expect activity to build momentum from mid-2025, and we are well-placed to capitalise on a substantial pipeline of future work.”

Despite near-term challenges, Steel & Tube remains optimistic about the future. The company believes the market cycle has likely bottomed out, and it is already seeing early signs of recovery.

Share performance of STU

STU shares closed 1.25% lower at NZD 0.790 per share on 13 March 2025. Over the past year, STU’s share price has dropped by nearly 25.47% and in the last three months, it has declined by over 8%.

52-week high of STU is NZD 1.14, recorded on 12 March 2024 and 52-week low is NZD 0.77, recorded on 24 February 2025.

Resistance and support summary

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 13 March 2025. The reference data in this report has been partly sourced from EODHD/Others.

Technical Indicators Defined:

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.