Steel building products manufacturer Steel & Tube has lifted annual profit by 15 per cent after gaining a sales boost from buying a stainless steel goods maker.
Profit rose to $17.9 million in the 12 months ended June 30, from $15.6 million a year earlier, the Lower Hutt-based company said.
Sales increased to $441.4m from $393m, in part boosted by a $12.9m contribution from its new business, S&T Stainless.
The company bought Tata Steel (Australasia), the local division of the Indian manufacturer now renamed S&T Stainless, for $28.1m in April, giving it market share of stainless, engineering steel and floor decking products in New Zealand.
Steel & Tube is a key beneficiary of building activity in Auckland and the Canterbury rebuild, particularly in the reconstruction of the CBD rebuild.
In anticipation of increased activity it had invested in new plants and equipment, including two in Auckland and one in Palmerston North.
The company is also part of government infrastructure projects, including the Auckland Waterview Connection, Wellington’s National War Memorial Park and underpass and Burwood Hospital in Christchurch.
“Economic activity, and consequently volumes, improved across most sectors although competition remains intense, restraining margins,” chief executive Dave Taylor said.
“Globally the steel industry remains challenged: over-capacity is a continuing issue alongside increasing geopolitical risks and reducing economic forecasts across several regions.”
The company didn’t give specific guidance, but Mr Taylor said economic activity across the country would see Steel & Tube “continue to deliver improving results”.
It announced a final dividend of 9 cents from 8.5 cents the previous year.