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_8317410814445020341iubdj-2-2-2"><ul><li>December quarter ready-mix concrete (RMC) production continued the downward trend that began early in 2022.</li><li>Volumes in 2023 were down -11% on the prior year and -12% for the December quarter.</li><li>December volumes were broadly in line with pre-pandemic levels in Auckland, with declines more pronounced across the rest of the country. </li></ul></div>

December quarter ready-mix concrete (RMC) production continued the downward trend that began early in 2022.Volumes in 2023 were down -11% on the prior year and -12% for the December quarter.December volumes were broadly in line with pre-pandemic levels in Auckland, with declines more pronounced across the rest of the country. 

Building Sector - Ready-Mix Concrete — Cementing 2023

<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>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

<ul><li>Steel and Tube (STU) has provided FY23 normalised EBIT guidance NZ$28-32m and 2H23 volumes down -10-15% on 1H23.</li><li>There has been a broad based softening in demand and high cost inventory is impacting margins.</li><li>EBIT guidance is 24-32% below our current forecast of NZ$42m and implies 2H23 EBIT of NZ$8-12m (NZ$20m 1H23).</li></ul>

Steel and Tube (STU) has provided FY23 normalised EBIT guidance NZ$28-32m and 2H23 volumes down -10-15% on 1H23.There has been a broad based softening in demand and high cost inventory is impacting margins.EBIT guidance is 24-32% below our current forecast of NZ$42m and implies 2H23 EBIT of NZ$8-12m (NZ$20m 1H23).

Steel and Tube (STU): Trading Update and Earnings Guidance

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.

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Steel & Tube Holdings (STU NZ)

Building Sector - Ready-Mix Concrete — Cementing 2023

December volumes were broadly in line with pre-pandemic levels in Auckland, with declines more pronounced across the rest of the country.

Forsyth Barr

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: 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

Steel and Tube (STU): Trading Update and Earnings Guidance

Steel and Tube (STU) has provided FY23 normalised EBIT guidance NZ$28-32m and 2H23 volumes down -10-15% on 1H23; There has been a broad based...

Forsyth Barr

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