Overhaul set to pay dividends at Steel & Tube

Steel & Tube Holdings says improving sales have continued into the current financial year and it expects to resume dividends as its business overhaul begins to pay off.

The supplier of steel building products, restructured under the guidance of a refreshed board and new chief executive Mark Malpass, now “has a balanced exposure across the rural, manufacturing and construction sectors, with consistent demand and activity forecast in all sectors over the next few years,” it said.

“Steel & Tube has begun to see positive results from the implementation of its change programme, specifically increasing both volumes and sales,” the company said.

The overhaul uncovered a number of legacy issues which materially impacted earnings in the year to June 30. The company reiterated its loss on an earnings before interest and tax basis was $36.2 million in the year ended June 30 while normalised ebit was $16.5m.

The normalised figure stripped out $53.8m of non-trading costs and impairments and a $1.1m benefit from reduced software amortisation costs due to delays implementing a new enterprise resource planning system.

The firm said improving sales trends in the three months to June 30 “have continued into the current financial year”.

It reiterated it expects an ebit of at least $25m in the current financial year. While no final dividend will be paid for FY18, the company expects to resume dividends in FY19.