Wasn’t implying anything at all
They did use the word expected on 23rd May
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Could "We live in hope" be more to the point,than expected.?
We live in interesting times.
That preso presents a compelling case to get in while the shares are cheap as ....very impressive
EBIT going from $14m this year to $25m next year and then $40m a year or so later is very impressive. (even though they were achieving those sort of figures a few years ago)
The $25m is going to mean F19 EPS is about 10 cents (I think allowing for the new shares) ....so based on this how high can the share price go over the next year?
Only thing that would worry me is that all the talk about the booming market and all the great things to improve efficiiency / productivity etc echos of Metro Glass.
HaHa , still holding VOC and enjoying the bounce, just 100% more lift to go and im in the money:eek2:. The CEO built it up buying buying buying paying far too much , spinning bull dust then sold out at the top!! And left, b'stard.
I hold STU indirectly. The options are,sell at the bottom, do nothing and be diluted or take up spp and believe newish management really have sorted it (ERP scapegoat, legacy issues , insurance will pay bulk of fines for dodgy mesh). Im thinking the last approach atp.
pretty much sums it up. damned no matter what you do really eh JT.
I have a small holding, purchased before the 'building boom'.... lesson learnt; say no more.
Its not huge sums so not that bothered, but will throw some extra cash at it and average down. Long term play though.
I don't believe insurance will cover anything (cant insure negligence?) and then there is still that pesky risk of a class action (where no one wins except the lawyer trying to instigate it).
Not expecting a divi anytime soon either, but reckon those beaten down building stocks are all at the bottom of their cycles and should come good eventually.
new management look okay. will watch to see how it plays out
Does anyone have any insights as to the full extent of liability for supplying dodgy mesh/steel that has been incorporated into a construction? I.e. how far could this issue actually go, would buildings have to be rebuilt and to what extent is STU really covered by insurance?
I think it will be up to the courts to determine the extent of liability,and whether buildings have to be rebuilt or not.Compensation etc.
The insurance I would think will also be determined in the courts.
Whatever ever happens, I expect it will come at a considerable cost to STU.
Lawyers,QCs and courts do not come cheaply.
All hunky dory, nothing to worry about, transformation well underway and dividends back next year:
http://nzx-prod-s7fsd7f98s.s3-websit...957/285625.pdf
(how much to believe though)
Had plenty of support today up 4c wonder how this will trade heading into the bookbuild ....
It said the quarter trading is looking positive...so the management must be on track. A write off is one off..so with 1/2 billion revenue...for sure the SP worth more than the current?
Since when would revenue determine the share price? Last time I checked was STU not a hyped up startup software company, but a building supplier with a lousy quality system.
If you look into earnings (instead of revenue), than yes, this is typically one of the factors impacting on share price, but not the only one. And to be honest - a forward PE of 133 (2018 to 2020 based on analyst consensus) might suit amazon, but is this the right PE for a ZERO growth company like STU?
And what about risks? Isn't there some pending litigation with potentially fatal outcome given that they sold lots of substandard steel?
If we assume that all the customers whom they sold substandard steel are happy and forego compensation (unlikely) and that they manage to get back to something like 20 cents EPS next year without further slippage (highly optimistic) - how much would they be worth? OK - lets say $2 as absolute best case. The question every investor needs to ask themselves is - how large is the risk that things run less than optimal (they always do ....).
I think the market gives a quite clear answer to this question;
Having another spurt towards the theoretic ex rights price of $1.28 today. The rights in the money by 19c will be interesting to see how this trades over the next few days.
So the question is - what effect on SP will the bookbuild have, which closes for retail investors tomorrow moring? Will those that bought their entitlement at $1.05 get burned, or make a nice instant profit?
This will help STU...
https://www.nzherald.co.nz/business/...ectid=12116219
Record date for rights issue 5.00pm on 15 August 2018
• Despatch of Offer Document to shareholders 16 August 2018
• Opening date of rights offer 17 August 2018
• Closing date of rights offer 5.00pm on 3 September 2018
• Shortfall bookbuild 5 September 2018
• Allotment of New Shares 7 September 2018
• Payment of any premium achieved in bookbuild By 11 September 2018
Masochists..
Place it on your watch list and wait for the programme alert !!..
Will be interesting to see how the bookbuild pans out next week and how it will compare to the theoretical ex rights price of 1.28 ....
Agreed one has to remember that the rights are renounceable so perhaps shareholders who would otherwise participate in a non renounceable will simply sit on the sidelines and receive a premium if the book build price is above $1.05 ....
Either way will be interesting to see how many holders do stump up for the 1:1.9 shares @ $1.05
The intos supported them..they already raised 20m....so the sign of confidence that the boat will sail smoothly..otherwise instos won't put in the money in?
Ironic the instos Get a third bite of the cherry ....
STU going to do something like what Nuplex did after a deeply discounted cap raise
Share price will be well over 2 bucks next year ......even if they don’t perform as promised.
The Nuplex iisue worked out extremely well for holders but the circumstances were rather different. In NPX's case it was mainly a matter of too much FX borrowing, owing at a timewhen the NZD took a tumble. The business was sound, otherwise, and not facing the seemingly ongoing quality problems that STU still battles. A bit of a punt, still, IMO.
... and didn't Nuplex come up with this amazing new coating technology everybody wants to use before its share price went stellar (http://www.scoop.co.nz/stories/BU150...industry.htm)?
Unless we assume STU have something comparable in their secret research labs (I haven't heard about, hey they must be really secret) should we probably be careful with comparing apples and potentially less desirable droppings?
You guys please stop picking on me
All I was trying to say was that buying after a deeply discounted rights issue (for whatever reason) is often very profitable and that Nuplex was an example of that. No doubt others
And BP that whiz bang technology of Nuplex just kept them in the game, nothing else. And the business still isn’t performing that well in NZ even under new ownership. Don’t know how rest of world is going.
Recent research from Craigs was missing any mention of the "class action," or the "Commerce Commission" likely heavy fines.
I think this is extraordinary.
Well let’s see what happens to the SP tomorrow noting the bookbuild price will be not lower than $1.05 and no higher than $1.22 being today’s closing price ...
Took up my shares and put a few quid into the insto raise, recapitalising the business at a discounted price. Assuming they hit the $25M EBIT next year amd $35-40M EBIT within 3 years this could look very cheap. That being said the really do need to be turning a corner and not get hit with a huge fine from the comcom. Will be interesting to see how this trades while the book build occurs .....
Plenty of turnover at these prices would lend support to the book build price being towards the closing price of yesterday one would think
http://www.sharechat.co.nz/article/5...71-uptake.html
Significant vote of no confidence. Very very difficult industry to be in. I think the chances of STU meeting their future profit "guesses" (which is all they are), are VERY slim.
Beagle with 70% uptake I think it’s a bit hard to call it a vote of no confidence particularly with the fact those holders not taking up the right are still entitled to any premium should the bookbuild be above $1.05 a share (assuming their is a premium). I would imagine if the rights were non renounceable the take up would of been close to 100% the fact remains the CR is recapitalising the business to a considerable extent. As always the proof will be in the post CR trading ....
Have made plenty of money in the past whenever FBU got itself into trouble and needed new capital and restructuring (as in selling assets etc). Just have to make sure you are not exposed when they get into trouble.
But thanks for the cautions, Beagle. That is why we have a market. Sincerely meant.
Well bookbuild price at 1.23 a good a result as could be expected will be interesting to see how it trades on market ....
Scaling of the bookbuild also applied should help support the price
https://www.nzx.com/announcements/323441
Fund managers going long on purchases it would seem. Will be interesting to see how STU trade over the shorter term the market isn’t expecting much afterall ....
https://www.nzx.com/announcements/323845
Always take note when directors and management buy shares and/or more shares.
Has served me very very well over the years - not a sure fire thing but close! Believe me, the buggers are tight with their money, so used are they these days to free options, discounted price entries etc. So when they put in their own money, especially more than token amounts, take note!
The market has fairly low expectations going forward, i suspect news that they are on target will see a rerate here....
u bloody right! They are tight n won't put the money in unless they r on track!
https://www.anzshareandbondtrading.c...spx?id=4838853
No worries at all, back to $1.80 in no time.
https://www.nzx.com/announcements/324244
(re-affirm FY19 guidance)
Has to be one of the better buys at current prices?
(bought a couple more just in case I am right)
Today, amongst the many pieces of paper post from assorted share registries around the world was one from Computershare NZ suggesting that I sign up for electronic communications with STU.
Why or why when registries send your statements by email do they then resort to paper for so much else?
So, as I seem to do on a regular basis, I selected the 'I want ALL my communications for ALL the companies I have shares in sent electronically' option.
I hate Computershare and have fantasies about reprogramming Penny, their Virtual Agent, with a large axe.
Moving on.
Obviously I bought a few, and for less than the $1.20 I thought was worth a punt, like the fact that they have reaffirmed guidance [Our guess is still good :mellow:] but would like a few cents more on the share price.
Going to be a long time between drinks for this one, me thinks.
Always good buying in the bookbuild ...
Thanks guys should of quantified it’s was re the STU bookbuild .... looks like it is going for a bit of a run this arvo.
Looks to be breaking out ...
ASM could be the next catalyst for a move higher in 3 weeks. Assuming they keep to or above guidance and are done with right offs those divi hounds will come sniffing again my bet assuming divis are resumed shorty....
Lets hope they exit the plastics business and they don't have to write off any more for this asset. Would be good to hear that margins are improving and they are winning a few larger contracts...
Sell side volume appears to be thinning also. Agree comment re reinstatement of divi will send this flying ...
Offer from flecther...
someone knew?
https://www.nzx.com/announcements/324803
https://www.nzx.com/announcements/324803
Takeover offer on 10 September 2018 from FBU - $1.70
Board does not support the offer but why have they kept is so quiet until now??????????????????
Well I did say all was hunky dory a few days ago and we would be seeing $1.90 again some time soon. To be fair I was sort of exaggerating but who knows now...
Somethings smells though. They have know since Sep 10, and the SP has been really moving in one direction for a while. Not sure if insider trading has been going on but WTF surely the board should have released that info on Sep 10 with a "board will analyse offer and get back to market with recommendation in due course". Wild wild west prevails.
So Susan Paterson buys 117,436 shares, she has done very well. This notice out on 13 September. But its all about timing when they actually signed the paperwork and sent the $. See its on 7 Sep that the transaction happened so that falls well before 10 Sep....
http://nzx-prod-s7fsd7f98s.s3-websit...845/286697.pdf
Topping up large in the bookbuild looks lile a fantastic move in hindsight ....
Well I do need to thank you Boysy and Balance for your insights,as I only got stuck in yesterday!
Great timing steveb what do the company think STU is worth is the question ? $2 has a nice ring to it ....
Smells a bit funky doesn't it?
No problem with the participation in the rights offer. The maths suggests it was part of the pro rata offer rather than the placement - so no additional shares (above the normal amount per the pro rata offer) were transacted in.
Does it matter if the offer was an indicative non-binding offer? And if so, why even announce the rejection of such an offer?
Without looking into the disclosure rules more closely, this one feels worthy of a box of wine
From the ann - let the games begin ......
Steel & Tube recently reaffirmed its FY19 guidance of earnings before interest and tax of $25 million on the back of the continuing positive progress being made under the company’s ‘Striving for Excellence’ strategy. The company has a clear focus on growth and improving financial performance as it positions itself as New Zealand’s leading supplier of steel products. While the market remains highly competitive, Steel & Tube continues to win new customers, sign large contracts, increase efficiencies and reduce costs.
Steel & Tube’s solid foundation has recently been strengthened with a successful capital raising. The Board and Management are confident in the improving performance of the company, and remain focused on providing high quality steel solutions and products and delivering value for employees, customers and shareholders.
One of my greatest buying at $1.16. Saw a lot of orders wanted to get in at $1.15...so a bit of punt....for me to get in. :t_up:
Not me - I just thought the recently increasing price was consistent with an increased probability of the future $40m+ EBIT occurring as the STU had confirmed they are on-track for the first step of the process, an EBIT of $25m. The capital raise repaid most of the debt so the big deduction to get to NPAT is tax. Allowing for a 28% tax rate and a little bit of interest, this EBIT is just over 10c/share earnings. Useful but not enough to support a share price much (if anything) above market.
Its the delivery of the $40m+ future EBIT's that would take the share price up.
Interestingly $40m - $0.8m interest - $11m tax (@28%) = $28.2m
$28.2m / 166m shares on issue = 17c/share
Indicative takeover is therefore around a future PE of 10 (if the $40m EBIT is hit).
You would imagine a fair few synergies would be able to be extracted should fletchers buy STU .... time to up the offer
First offer is never last offer so $2 is on imo.
The way to assess this is that FBU can debt fund itself at less than 5% pa so even if FBU pays $2 per share ($330m), a takeover of STU will be earnings positive : $25m EBIT less $15m interest = $10m additional EBIT for FBU
$330m @ 4.5% pa = $15m interest or at 5% = 16.5m
Plus all the benefits from the lovely synergies and rationalization to come!
Seems a win win i suspect only the directors of STU are worried about a new job under a TO situation .... Time to get an independent report done pronto if they think the offer is not up to scratch ....
I must admit it will be interesting to see what FBU have to say,hopefully they are busily getting a response together.Their SP is just drifting, down 8c today.
It's a forgone conclusion of the EBIT @ $25 mil,it's really a matter of how much icing is on the top!
Be fun if Fletcher’s go the hostile way
Haven’t had a good stoush on the NZX for a while ....things are just too friendly these days
Well, STU directors who topped up at $1.05 and $1.23 are not accepting the offer so FBU either withdraws (unlikely) or goes aggressive (likely).
Unlikely because FBU would look donkey stupid if this is their way of handling a takeover - no backup plan or counter offer. Credibility at stake.
The proposed acquisition would need clearance under the Commerce Act, which would take some time to work through due to Fletcher’s vertical presence and significant size in several steel product markets.
FBU would look a tad silly(again) if they went aggressive and the got shafted by the commerce commission !
here you go from FBU
https://www.nzx.com/announcements/324808
Interesting announcement from FBU certainly seems like they are willing to progress and negotiate a higher offer in due course wonder if any other suitors are out there ...
irst offer is never last offer so $2 is on imo.
The way to assess this is that FBU can debt fund itself at less than 5% pa so even if FBU pays $2 per share ($330m), a takeover of STU will be earnings positive : $25m EBIT less $15m interest = $10m additional EBIT for FBU
$330m @ 4.5% pa = $15m interest or at 5% = 16.5m
Plus all the benefits from the lovely synergies and rationalization to come!