New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Thematic (Sector/Industry)

<div id="m_2532418749359313970iubdj-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2"><ul><li>After having run at record levels over 2021–2022, residential building consents finished the year down -25% on 2022 but still at a solid 37k.</li><li>The decline was concentrated in metro areas, in particular Wellington and Auckland, and there were similar levels of declines in both detached and high density dwellings.</li><li>While consents are likely to continue to soften over the first half of 2024, forward indicators suggest activity will likely improve over 2024. </li></ul></div>

After having run at record levels over 2021–2022, residential building consents finished the year down -25% on 2022 but still at a solid 37k.The decline was concentrated in metro areas, in particular Wellington and Auckland, and there were similar levels of declines in both detached and high density dwellings.While consents are likely to continue to soften over the first half of 2024, forward indicators suggest activity will likely improve over 2024. 

Building Sector - NZ Consents — A Year in Decline

<ul><li>September quarter ready-mix concrete (RMC) production highlighted continued soft NZ construction activity, with volume declines on both the prior quarter (seasonally adjusted) and the prior year.</li><li>The -10% year on year decline in RMC volumes is broadly consistent with recent trading updates from Fletcher Building (FBU) and Vulcan Steel (VSL).</li><li>Concrete volumes are now broadly back to pre-pandemic levels, but there maybe some signs of life in Auckland where there have been two quarters of sequential volume growth. </li></ul>

September quarter ready-mix concrete (RMC) production highlighted continued soft NZ construction activity, with volume declines on both the prior quarter (seasonally adjusted) and the prior year.The -10% year on year decline in RMC volumes is broadly consistent with recent trading updates from Fletcher Building (FBU) and Vulcan Steel (VSL).Concrete volumes are now broadly back to pre-pandemic levels, but there maybe some signs of life in Auckland where there have been two quarters of sequential volume growth. 

Building Sector - Ready-Mix Concrete — Set in Its Way

Equity Bottom-Up

<ul><li>Steel and Tube's (STU) FY23 result was in line with recent guidance and our expectations. It was a tale of two halves and two divisions.</li><li>Volume declines accelerated significantly in the second half.</li><li>This was most acutely felt in the Distribution division while structural improvement in Infrastructure saw earnings lift. </li></ul>

Steel and Tube's (STU) FY23 result was in line with recent guidance and our expectations. It was a tale of two halves and two divisions.Volume declines accelerated significantly in the second half.This was most acutely felt in the Distribution division while structural improvement in Infrastructure saw earnings lift. 

Steel & Tube Holdings - FY23 Result — Tale of Two Halves

<ul><li>Macro challenges offset through cost controls: STU upgraded its EBIT guidance by +5% at the midpoint to NZ$31m–32m.</li><li>Inventory unwinding drives debt reduction: STU's focus on its balance sheet and running down inventory has reduced net debt by c.-NZ$50m on FY22 and resulted in net cash of NZ$6.5m at FY23. </li><li>More cyclical pressures on the horizon: FY24 is likely to be another challenging year. While STU's key non-residential exposure remains robust we expect some deterioration as higher interest rates pressure commercial development feasibilities. </li></ul>

Macro challenges offset through cost controls: STU upgraded its EBIT guidance by +5% at the midpoint to NZ$31m–32m.Inventory unwinding drives debt reduction: STU's focus on its balance sheet and running down inventory has reduced net debt by c.-NZ$50m on FY22 and resulted in net cash of NZ$6.5m at FY23. More cyclical pressures on the horizon: FY24 is likely to be another challenging year. While STU's key non-residential exposure remains robust we expect some deterioration as higher interest rates pressure commercial development feasibilities. 

Steel & Tube Holdings: Steeling the Limelight

<ul><li>Slow start to 2H23, stronger finish required to hit guidance: STU guided to FY23 EBIT of NZ$28m–$32m which implies 2H23 EBIT of NZ$8m–$12m</li><li>Solid cash earnings runs down inventory and net debt: The key positive from the update was further evidence that STU's focus on its balance sheet is paying off, with inventory and net debt continuing to reduce</li><li>Navigating  a weaker demand environment: FY24 is likely to be another challenging year given the exit run-rates from FY23</li></ul>

Slow start to 2H23, stronger finish required to hit guidance: STU guided to FY23 EBIT of NZ$28m–$32m which implies 2H23 EBIT of NZ$8m–$12mSolid cash earnings runs down inventory and net debt: The key positive from the update was further evidence that STU's focus on its balance sheet is paying off, with inventory and net debt continuing to reduceNavigating  a weaker demand environment: FY24 is likely to be another challenging year given the exit run-rates from FY23

New Zealand

Steel & Tube Holdings Limited produces and distributes steel throughout New Zealand and its products include steel fasteners, nuts, bolts and screws.  The Company's other activities include steel reinforcing.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Steel & Tube Holdings (STU NZ)

Building Sector - NZ Consents — A Year in Decline

After having run at record levels over 2021–2022, residential building consents finished the year down -25% on 2022 but still at a solid 37k.

Forsyth Barr

Building Sector - Ready-Mix Concrete — Set in Its Way

September quarter ready-mix concrete (RMC) production highlighted continued soft NZ construction activity, with volume declines on both the prior...

Forsyth Barr

Steel & Tube Holdings - FY23 Result — Tale of Two Halves

Steel and Tube's (STU) FY23 result was in line with recent guidance and our expectations. It was a tale of two halves and two divisions.

Forsyth Barr

Steel & Tube Holdings: Steeling the Limelight

Steel and Tube (STU) lifted its FY23 earnings guidance slightly as cost-out initiatives and stable gross margin dollars per tonne offset softer...

Forsyth Barr

Steel & Tube Holdings: Down the Tubes

Steel and Tube (STU) has provided FY23 EBIT guidance which implies a significant slowdown in 2H23 earnings, driven by both lower volumes and gross...

Forsyth Barr

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)