Shareholder
Newsletter
December 2024
Dear Shareholder
Kia Ora, Tēnā Koutou
With the end of 2024 just a few weeks away, we are looking forward to 2025 and seeing an uplift in the economy which will drive growth for New Zealand businesses.
Successfully Navigating the Cycle
We recently provided an update on trading for the first four months of our FY25 financial year (July to October 2024). As has been well noted by industry participants, this year has been a particularly challenging one for our sector, with reduced demand across all key market segments having a sizeable impact on our topline.
Capturing revenue and driving profitability is the priority across all our teams.
We are doing this by controlling the controllables and staying the course on our strategy – continuing to strengthen our core and invest in high value products and services.
We’re focused on emerging from this cycle as a stronger business:
- We are continuing to take cost out while ensuring we retain sufficient inventory, resource and capability to allow us to scale up quickly to meet demand when it returns;
- We are maintaining our market share and have more than 13,500 active customers. We continue to strengthen our customer relationships and work closely with our customers on future projects to ensure we are a preferred supplier when these commence;
- Our M&A strategy is delivering value and our strong balance sheet has the capacity to let us take advantage of opportunities, both in the current market and the future
Long Term Trends are Favourable
While the timing of an economic recovery remains uncertain, there are some positive themes that should lead to improved activity over the next 12 to 18 months.
Continued interest rate cuts over the coming year are expected to stimulate the manufacturing and construction sectors. There is a massive shortfall in housing, with more than 115,000 new homes needed to fix the current housing crisis. Commercial investment into new buildings will start again as borrowing costs reduce.
Longer term, there is a significant need for maintenance and new infrastructure in roading, health, water, climate resilience and renewable energy. These are all areas where Steel & Tube has specialist expertise, for example, in wind farm construction.
The Government has an important role to play in lifting confidence and activity. There are 149 projects which have been selected for immediate referral to the expert panel under the Fast Track bill - it will be good to see these approved and funded, although we acknowledge it will take time before project work actually starts.
Ready to Win
Over the past 70 years, Steel & Tube has proven its ability to successfully navigate through down cycles. Our dual pathway strategy is delivering tangible results, and this remains the framework for our actions.
Our market share is steady, we have a loyal customer base and we have quality inventory meaning we can provide the products and solutions we know customers will need when their projects start up again. Our inherent operating leverage will deliver profit expansion as demand returns and our strong balance sheet is providing resilience and supporting growth.
We have the resilience and robustness to successfully navigate through the current cycle, the capability and expertise to leverage the increase in demand when it returns, and the balance sheet capacity to take advantage of opportunities, both in the current market and in the future.
We are confident in our ability to see this cycle through and optimistic about our future. We hope you enjoy reading about some of our initiatives and work below.
As always, we welcome feedback from our shareholders. Thank you for your continued support and thank you to those shareholders who participated in our recent Annual Shareholders' Meeting.
Ngā mihi and Happy Holidays
Susan Paterson Chair
Mark Malpass Chief Executive Officer
2024 Annual Shareholders’ Meeting
We were delighted to welcome shareholders to our Annual Meeting on 28 November 2024 in Auckland. All resolutions were passed.
The Meeting speeches and presentation can be viewed here.
December 2024 Procurement Update
Steel & Tube prepares a regular Procurement Update, providing insights into the global steel market and what this means for Steel & Tube and our customers. The December 2024 Update ‘Point of Inflection’ suggests that with product markets appearing to have “bottomed” in 2024, landed pricing is expected to keep a relatively flat trend across 2025, waiting for a return of volume.
A Building for the Sporting Talent of Ōtara
Replacing an aging facility, this new sports centre has been designed to reflect the many cultures of South Auckland and to revitalise the Ōtara cultural and sports community.
The design brief was for a fit for purpose, highly secure building that was responsive to the area’s cultural roots and neighbouring marae. Architects, Pacific Environments, were already very familiar with Steel & Tube’s roofing profiles, having used them on multiple previous projects.
The long low pitch roofing profile of Steel & Tube’s ST900 roofing profile was the ideal solution, meeting all the design requirements and more. It provides long-term durability, low maintenance, and sound reduction in the rain, and forms the backdrop for a roof-top sculpture made of woven aluminium Tukutuku panels.
Double Steel Solution The Pā
The most ambitious building project in the history of the University of Waikato Te Whare Wānanga o Waikato, The Pā takes pride of place as the new front door and academic heart of the Hamilton campus.
With a floor plan of 6,500 sqm, The Pā is constructed from massive timber columns and beams, supported by steel reinforcing, along with nearly 2,500 sqm of ComFlor® composite steel decking for the mid-floors. It was a very complex build, requiring 550 tonnes of reinforcing steel from Steel & Tube for foundations, slabs, columns, beams and retaining walls.
The collaboration with the main contractors, Hawkins, began early in the project, with Steel & Tube helping to plan prefabrication methodologies and using 3D modelling to produce shop drawings.
Says Steel & Tube Senior Project Manager, Heinrich Rautenbach, “It was good for collaborating with the engineers, so they could see exactly what was planned. For example, we had 10,600 individual studs for welding ComFlor to the structural beams, and we could point to the placement of every single one.”
Bringing both the reinforcing and steel decking to such an innovative and demanding project as The Pā gave Steel & Tube the opportunity to coordinate two trades at once.
‘It required a lot of skill and technical capability from both teams,’ says Grant McMurray, Steel & Tube’s National Projects Manager, Reinforcing. ‘It was a very complex build, and when you finish one of those you feel really proud. We delivered a good product, on time and to a high quality.’
Rosey is the National Project Manager, Acquisitions at Steel & Tube. With an engineering degree and more than 20 years’ industry experience, Rosey is responsible for managing the due diligence process on potential acquisitions and then integrating them into the group if they go ahead.
Rosey’s career started at Fletcher Construction, where she worked on infrastructure and industrial construction projects across the country. She then moved to Australia, working on projects that included a wharf in New Caledonia at one of the largest nickel mines in the world. On her return to New Zealand, Rosey worked in various Quality Manager roles before joining Steel & Tube in 2023 where her construction project management skills and experience have easily transferred to the M&A world.
Rosey balances her career with three children, coaching youth hockey teams and playing the sport herself, farming part time on the family farm in North Waikato and supporting her husband in their crane hire business.
Award winning
Rosey was the winner of the Woman in Contracting award at the Auckland CCNZ Hynds Construction Awards in 2017. As a result, she joined the CCNZ (Civil Contractors NZ) Auckland Branch Committee and has chaired the Awards subcommittee for the last four years. She says it’s really rewarding to see everything come together at the Awards event where the best of Auckland’s civil construction industry are celebrated each year.
Award winning Tray roof profile, QBT450
Steel & Tube is introducing an award winning roof profile, QBT450, in the first quarter of 2025. The profile offers a clean, contemporary look that delivers a ‘new edge’ to the tray profile market. Tray profiles are modern, flat and sleek roofing options, often used on contemporary homes. The minimalistic design and discreet fastenings make it a popular choice for wall cladding as well as roofing.
The innovative QBT450 system has no external penetrations, enables passive ventilation, mitigates thermal expansion and contraction, and allows better movement in seismic situations. Along with reducing installation time for our customers, the profile is also the only BRANZ approved Tray profile in New Zealand.
This product is an innovative system that will enhance the Tray market and create a leading position for the company.
Rapid, accurate and timely aluminium orders an essential ingredient in fabricator’s success
The Rising Foundation
The Rising Foundation provides intervention and support to unlock the potential of young people in South Auckland. Its core programme supports year 8 – 13 students through school, while its Transition 2 service, which Steel & Tube supports, provides assistance to students in their transition to the world of work. This is one of the most challenging phases of a young person’s life.
The Rising Foundation ensures its graduates are equipped for the relational and vocational issues that this transition presents and offers practical assistance and relevant guidance as graduates head out into tertiary education or into the workforce.
SUSTAINABILITY AT STEEL & TUBE
As one of New Zealand’s largest steel distributors and manufacturers, climate change has the potential to have a transformative impact on the way we do business. We are focussed on those things that we can control, from the transport emissions of our fleet to energy use and the reduction of waste produced during manufacturing in our plants.
We have partnered with Workride, a ride-to-work benefit scheme that provides our employees with equitable tax offsets to access a bike, e-bike or e-scooter for their work commutes. This initiative not only supports a healthier lifestyle but will also reduce our Scope 3 employee commute emissions.
Following on from the successful reduction of energy consumption on our sites through the installation of LED lighting, we have begun installing energy submetering equipment in our key Auckland sites to monitor the patters of energy use and understand where further efficiencies can be made.
To further our commitment to renewable and sustainably practices, we are exploring options for investment in a virtual solar partnership. This approach will enable us to support solar energy projects in Aotearoa and offset a portion of our electricity consumption with renewable sources, without needing physical installations.
We are actively involved in the Sustainable Steel Council. The Council is taking the lead on an ambitious journey to develop a comprehensive decarbonisation roadmap for the steel sector. This aligns with our commitment to sustainable practices and our goal of significantly reducing carbon emissions within the industry.
Climate Statement
Following on from our disclosure last year, this year Steel & Tube reported for the first time under the Aotearoa New Zealand Climate Standards.
We were pleased to be rated as B+ in Forsyth Bar’s CESG rating, remaining firmly at the top end of the Fast Follower category. Steel & Tube now has the highest C&ESG rating in the industrial sector.
