Could this be setting the trend for building and construction industry (STU,FBU,MPG) in general for FY18 that things are gonna be very tough...
Printable View
HY report announces EBIT for six months of $6.7M (HY17: 16.1M) and NPAT of $3.8 (10.6M). Impairment costs done, and future now brighter......
https://steelandtube.co.nz/2018-half...igital-version
Another "Oh Dear" coming.?
No no percy ......not again surely ....but this sounds a bit ominious -
The halt is to allow for STU’s board to complete a review of the company's financial performance year to date and consider certain other factors that are likely to impact on earnings guidance previously provided to the market.
Wonder what’s happened to the rumours about corporate activity
you missed 'asset valuations' out.
maybe they have sold their Blenheim Road site which they took to market per the announcement on the 3rd?
Yep– that’s plausible. They seemed to be pretty upbeat about its value though - “Steel& Tube believes the Blenheim Rd property will be very attractive to potential landlords. The property is expected to be one of the leading industrial investment opportunities in the South Island market for 2018.”
Was it is 2016 that the divi was increased because of property sales? i.e. by selling and & leasing back their site at Seaview? Who knows – might be a positive update coming (…..now wouldn’t that be a surprise!)
Certainly a shortage of good quality industrial properties out there for investors and the syndicated managers (fees! Fees! FEES!) but my understanding is that single purpose properties leased by one tenant is not as attractive and sought after as multi-purpose and multi-tenant properties.
Maybe Zero Commission making a full takeover at $1.88
Any property sale ramifications not relevant to the upcoming announcement ..it’s about financial performance performance etc
Guidance was -
•Excluding the one-off inventory valuation adjustment included in the half-year earnings guidance, full year EBIT for the 2018 financial year is expected to be materially the same as the 2017 financial year EBIT of $31.1 million, as the impacts from recent price changes and the benefits of change actions are realised.
So the expected better second half won’t eventuate (again) and there is a few other demons in the business
Sounds like H1 is going to be a lot worse that $10m less than last year as they indicated a while ago.
Hard to believe share price was over 260 last July ....outlook was have been bright back then
There is a few positive things in the announcement so besides a huge loss for F18 and breach of banking convenants and having a computer system that doesn’t seem to work the new and refreshed management team are on to it and the future is all honky dory
If you can actually work out what’s going on from this announcement you are pretty clever
http://nzx-prod-s7fsd7f98s.s3-websit...333/279695.pdf
This is really sad and it looks like I may have had a lucky escape. I was an indirect shareholder in STU for many years through my shareholding in ASX listed Arrium. I considered buying a serious direct sized STU stake, just to take advantage of the imputation credits that I wasn't getting with my Arrium holding. What put me off was how relatively unprofitable the Arrium held steel supply business on the Australian side of the Tasman was. I became uneasy that if they couldn't make a really good go of it 'over there', why are we in a much smaller market so much more profitable? What today's event tells me is that, fundamentally the steel supply business is tough on both sides of the Tasman.
SNOOPY
So even on a normalised basis without counting the bad stuff they might make $2m ebit in H2 when they said a few months ago they were on track to making $17m (to get full year to $31m)
Market has got heaps more competitive eh
Lesson / tip - never believe ANY company who says they will recover lost ground in the second half of the year. It rarely happens.
I managed to make a bit of money out of STU over the years but I cut away from them a couple of years ago as nothing was really changing there - too predicable and sad.
Hope not too many punters hurting today
Bit bored today and WINX.AU is in hiatus so got my punting money out and got some STU this morning at average under 150
might be a long time shareholder from here ....ha ha
But watching the action closely
Malpass said he hoped the market hadn't lost faith in the company,
http://www.sharechat.co.nz/article/3...s-drop-21.html
Shares didn’t quiet down to where they were last century
Study in US showed about 20% of reported corporate profits are eventually ‘reversed’ ....ie they never really existed in the first place when they write down asset values and restructure and have to make adjustments for inventory and debtors and a whole lot of other stuff ...all abnormal non-recurring items of course
STU have made about $150m npat over the last 9 years and now going to make one off non-cash adjustments/writeoffs of about $40m ...pretty good effort eh
Ugly...............................
http://www.sharechat.co.nz/article/7...aigs-says.html
Craigs must be reading this site for inspiration?
:D
Got oversold on the way down picked up a few of late - someone seems keen on buying at these levels that’s for sure ....
Looks to be the banks have provided a waiver for the covenant breach on the basis the sales proceeds from the just completed property settlement are used to retire debt. Perhaps that long dreaded CR isn’t quite so likely afterall ....
Now with the possibility of a class action lawsuit regarding the steel mesh fiasco:-
http://home.nzcity.co.nz/news/articl...273131&ref=rss
It looks like in my laymans opinion a quick settlement could be the best way forward?
huge discounted rights issue , must really need the money bad at such a big discount
https://www.nzx.com/announcements/321785
They say -
“The capital raised will be used to repay debt, strengthening our balance sheet and giving us greater flexibility to execute our strategy and deliver better value for our shareholders. In addition, we expect the capital raising to strengthen Steel & Tube’s share register and help create liquidity which will benefit all shareholders.”
Like it when one plays the old ‘liquidity’ card ....clever
A sector to avoid like the plague in my opinion. They've been so "successful" at delivering value for shareholders to date why anyone would trust them with more is beyond my comprehension.
First part of cap raise done and dusted with $20m raised
Chair of Steel & Tube, Susan Paterson, said: “We received strong support from existing institutional investors and were pleased to welcome several new large investors to the Steel & Tube register, including a number of New Zealand and Australian investment funds.The interest in the stock and significant support by sophisticated and rigorous investors, demonstrated confidence in the refresh of the board and management and the strategic direction of the company.
Great paragraph by Susan .....all hunky dory going forward ....but methinks most existing investors just averaging down and new investors smell a bargain.
Good time to have a punt I reckon ....wonder what it will open at today .....I put a bid in at 120?
Will this be like Tower and be the beginning of a turnaround?
Or will STU keep stumbling along...
40m EBITDA in FY21 would make the cap raise price pretty cheap
People buying PPH shares off the founder at over $4 thought they'd got a bargain...just saying ! Is there enough flea powder in the country to fix the infestation on this dog ?
You can take this companies ability to forecast with a grain of salt. Notice how they said normalised profits will be XYZ. Doesn't that make one wonder how many more so called one off extraordinary items, restructuring, e.t.c. will need to be still accounted for ? If you see a cockroach in the kitchen and squash it there's ALWAYS a LOT more.
Think there will nearly 166M shares after all this is done.
FY19 Estimate $25M EBIT would then be about $0.104 NPAT.
'Normalised' $35M EBIT down the road would then be about 'normalised' $0.148 NPAT.
Might be worth a small punt at $1.28 cum rights or $1.20 ex rights for me, but just as happy to stay off the register.
https://www.nzx.com/announcements/321830
Read this placement very carefully and consider where the sp is likely to go in the short term.
Read page 26 for I believe is the only mention of the fact that the $20.8m or 18.1m shares issued - are at $1.15 are 'cum-rights'!
http://nzx-prod-s7fsd7f98s.s3-websit...787/283950.pdf
So these favored institutions and investors get their shares at ex-rights $1.08 vs existing shareholders at ex-rights $1.28!
That's at a huge 20c discount!
How the heck is that 'substantially' pro-rata to all shareholders?
https://www.nzx.com/announcements/322044
Confirmation 18.1m shares issued at $1.15 today.
Share price holding at $1.35 so there's a nice 20c profit or 17.4% profit to be made by those 'fortunate' enough to get access to the placement.
Wonder if the rest of the market (especially those buying today at $1.35) is aware of this 'pro-rata' participation by all shareholders!
I do not know what the page 26 is in reference to as you link appears to a dud.
While I agree that the $1.15 guys get a better deal, they actually get their shares at an average $1.116 if they take up their rights in full.
That the $1.15 shares are included in the rights offer is stated in the Offer Document (on Page 6).
Always one law for the rich and another law for the not so rich, heh?
Looks like we are getting down to my $1.28 anyway :(
http://nzx-prod-s7fsd7f98s.s3-websit...909/284120.pdf
Per the offer document, this must be the most misleading statement possible to existing shareholders :
"The Offer follows the successful placement of $20.8 million of New Shares to institutional investors at $1.15 per share, being a higher price than under this Offer."
They are totally different type of shares under the offer!
Conveniently leaving out the fact that these are shares cum-rights so effective entry price (when they take up their rights at $1.05) is $1.08 vs $1.28 for those who hold shares at time of announcement!
Well given that:
the 'misleading' statement is totally accurate both in fact and language;
there is only one type of shares;
and the effective entry price is $1.116.
I think you may be letting your emotions cloud your rationality. Try and find a quiet spot and practice your mantra chanting (free one included with this post, look below).
Some of us managed to read the documents and do the sums and understand what is going on.
Disc: non-holder and will remain so at current market prices.
Can't see any reason to get worked up into a stew over this one. Shares subject to such a deeply discounted rights issue in a very poorly performing mutt often tend to end up trading very close to the issue price just before people have to stump up the funds and as more and more investors ponder whether they bother putting their paws in pockets to throw good money after bad. One wonders if the value of the rights will end up being virtually worthless ? How many more tens of millions of other write-offs / skeletons are there just waiting to be let out of the closet when the balance sheet has the strength to stand another lot of write-downs anyway ? Claims of solid normalized EBITDA for years to come is nothing more than brazen window dressing to try and get the desperately needed funds in the door.
Used car salesman selling some old piece of systemically flawed junk will tell you anything you want to hear to make a sale and this has those sort of salesmen's fingerprints all over it in my opinion.
Good on you then for such profound and insightful reading of document and conclusion indeed!
I am stunned into silent and quiet contemplation of said profoundness of insightfulness!
If only everyone had such depth of ability to understand what is going on.
Bravo, my friend and thanks so very very much of sharing your profoundness with us lesser creatures.
Stunning case of profound insightfulness in full display this morning :
Some insightful investor stood there and bought 30,000 shares at $1.34 - obviously with oblivious profoundness that the stock has gone ex-rights so should be theoretically trading at $1.19.
And they say that everyone reads the information and understand what is going on?
The offer from STU is...
"Under the Rights Offer, eligible shareholders are entitled (but not obliged)
to subscribe for 1 new share for every 1.9 existing shares held as at 5.00pm
on the record date of 15 August 2018, at an issue price of $1.05 per new
share. This represents a 28.1% discount to the closing share price on the
NZX on 6 August 2018 and a 18.3% discount to the theoretical ex-rights price
(TERP) of $1.28 per share, post the Placement and the Rights Offer, based on
the pre-announcement close of $1.46."
I'm no stockmarket legend but it appears that the stock is ex-rights at 5pm tomorrow. Could Balance possibly be wrong?
Pardon my ignorance, but why the XR notes and adjustments to the close price being made today (14 August) when the offer document says 5.00pm 15 August?
Because the ownership change (i.e. payment and register entry) happens only 2 days after the trade. Buy on the 13th, shares change hand on the 15th (and the new owner gets the rights). Buy on the 14th, shares change hand on the 16th and the old owner keeps the rights. This is what T+2 means :).
Thanks, W69 - but if only!
Amazing it is so hard to find an ex-date anywhere in the NZX web-site for any rights issue!
But when all bids and offers are cleared in the morning, that's as good a clue as any that a stock has gone ex.
Bit like when the missus clears out her wardrobe before leaving her hubby. :D
Under the Rights Offer, eligible shareholders are entitled (but not obliged) to subscribe for 1 new share
for every 1.9 existing shares held as at 5.00pm on the record date of 15 August 2018, at an issue price of
$1.05 per new share. This represents a 28.1% discount to the closing share price on the NZX on 6 August
2018 and a 18.3% discount to the theoretical ex-rights price (TERP) of $1.28 per share, post the
Placement and the Rights Offer, based on the pre-announcement close of $1.46.
Taken from STU news release dated 8th Aug. list 15th as being ex rights.
Those ignorant punters who may have taken up Zero Commissions offer of $1.88 earlier this year must be feeling pretty pleased with themselves now
https://www.stuff.co.nz/business/ind...firm-forecasts
Class actions - Scary stuff
You might have a problem finding some mug to buy a couple of million shares in this dog though
Funny thing. Bought my first STU shares in Dec 1998 @ $1.55
Sold some on 4/3/2005 @ $5.55 which I think is the highest STU shares have ever sold for.
Dividends over the years have been OK but my net return (capital + dividends) on STU to date is only 1.7% per annum which is appallingly pathetic compared with 13.1% from RBD, 10-15% from property, & etc.
Haven't kept up with the company well enough in recent years to really know what went wrong. Don't know what to do about the rights issue. Will probably just toss a coin.
Guess those got their shares in the placement at $1.08 equivalent will be happy to continue to lighten up - especially with the impending announcement any day now on the penalties to be imposed on STU re the substandard mesh steel?
$1.20 is still a nice healthy 11% profit for a week - that's 572% in a year if you can get sweet deals alike this every week!
I'm in the same boat. But today with the price sinking ever closer to the issue price, I am thinking that I will park what I have in the bottom draw for a few years.
With no divis this year and a bit unknown next, along with the Instos who will be selling for a bit of profit for a long time to come, why throw good money after bad?
Hi, just saw the announcement from Milford on 10-Aug 2018 where they declared:
...........
Details of transactions and events giving rise to substantial holding
Details of the transactions or other events requiring disclosure:
On-market purchases of 6,081,917 ordinary shares, for total consideration of $7,016,509.35 was made during the period 10 April 2018 – 10 August 2018.
..........
Average price works out just above 1.15, but the market never traded below 1.22 in
that period. So they obviously got themselves around 6m shares in the discounted
placement for 1.15 and declared them misleadingly as "on-market purchases".
Is this legal?
Result on this Wednesday...it said any commerce charges or penalties will be covered by insurance. It seems to be a good punt at the current price? Anyone thoughts?
They got their shares at $1.116 and a direct quote from announcement to NZX:
“As previously advised, it is expected that any financial penalty relating from the current Commerce Commission court case will be covered by Steel & Tube’s insurance”
Just keeping it real.
Results are 29th Aug now.
Anyone punt in? With restructuring happening almost a year...must be turn around soon?
Still mulling over taking up rights. Not much one can do when in a corner s/p wise. Will see results wed and decide then.Longterm longterm.
Hold a few much like those here waiting for the update.
Interesting piece re the book build the price cannot be less than $1.05 or more than the market price the day before the book build takes place. Should be plenty of room to do the numbers based on forward earnings projections assuming no more skeletons are lurking .....
https://steelandtube.co.nz/file/9175...token=LkNTFiE-
EBIT 25m for the next 2019 forecast...once capital raised..debts will be reduced to minimum from recent $100 debts...
once capital raised done done and dusted..will see the sp slowly raise?
With a history of under performance, they will need to get "runs on the board" ,before we can make a reasonable judgement on the company, and their future.
After the FBU fiasco is there anyone left that really believes that STU have found all the skeletons in the closet with their ~ $54m write-down ?
Future years profitability guesses have the look of a used car salesman telling me, yes we've fixed all the problems and you will get years of trouble free service...
Of course the company would say everything is sorted...they're up against it and need the capital ! Investors should treat anything this company says with a healthy dose of skepticism in my opinion. FBU and MPG have both left investors in the stew, why would you get a different result in the same sector from STU ?
Used car salesmen are pillars of the community.
The day of them telling lies went out the door years ago.
It is private car sellers who are the liars.
Only way is up is one way to look at it
The result meant to be 31st August, Friday. They brought forward to wed, 29th August, Wednesday.
what I see, the right offer close Monday, 3rd September. They would like to present it first so the shareholders can get Thursday and Friday to decide to get in the right offer?
I have heard things about STU... not good things...
I would be extremely skeptical about "Strive / ERP recovery" which is a huge chunk of the budgeted bigly recovery from FY18 to FY19
One of the comments on the slides from a customer mentioned "The ERP conversion caused a lot of problems...", and I reckon it caused a few to many problems for some customers, who won't be returning to STU
I hope for the holders sake I am proved wrong.