Steel & Tube (STU) investor relations material

Executive summary

• Sales revenue increased 8.1% year-over-year to $211.9m for 1H26, with volumes up 11.3% to 54,213 tonnes.

• Perry's Galvanizing acquisition outperformed expectations, delivering high-value, consistent earnings and offsetting margin pressure in the base business.

• Net loss after tax widened to $12.4m compared to $10.4m in the prior year period, with no dividend declared as capital discipline and balance sheet rebuilding are prioritized.

• Structural cost reductions and efficiency programs have delivered over $12m in opex savings to date, with a third phase underway targeting an additional $6m annualized savings.

• Operating environment remained challenging, but market share was maintained and customer satisfaction stayed high.

Financial highlights

• Normalised EBITDA rose to $2.8m from $2.0m in 1H25; normalised EBIT was $(10.3)m versus $(9.5)m in 1H25.

• Net operating cash flow was $5.6m, down from $23.1m in 1H25; cash and cash equivalents at period end were $7.0m.

• Product margin improved to 31.1% from 28.7% year-over-year.

• Net debt increased to $43.0m, mainly due to the Perry acquisition.

• Inventory reduced to $115m, with SKUs rationalized from 23,000 to 15,000.

Outlook and guidance

• Gradual and uneven market recovery expected through 2026, with construction and manufacturing demand forecast to rise, supported by lower interest rates and government spending.

• No formal guidance provided, but management expects EBIT to improve in the second half, aiming for breakeven in coming months.

• Management expects to meet revised banking covenants in the upcoming financial year, with forecasts assuming earnings will return to 2021–2023 levels.

• Medium-term plans include reducing debt, resuming dividends, and continuing M&A as conditions allow.

• Focus remains on cost discipline, margin growth, and capturing synergies from acquisitions.