Steel&Tube Ltd is signalling a first-half result above last year's but is cautious in its comments about a recovery in the building and construction market.Chairman Dean Pritchard told the annual meeting that New Zealand's largest distributor of steel
Steel&Tube Ltd is signalling a first-half result above last year's but is cautious in its comments about a recovery in the building and construction market.
Chairman Dean Pritchard told the annual meeting that New Zealand's largest distributor of steel products had experienced a softening of demand in October.
"Our trading in the first four months of the new financial year has seen a continuation of the performance in the latter part of June 2010 half year, although demand has softened somewhat in October.
"Present indications are that the performance in this December half will exceed the underlying performance achieved in the second half of last year," he said.
The company reported an underlying profit of $9.9 million in the year to June 30 and said it experienced a recovery from a low base in the second half of that year.
Today, Mr Pritchard said the building and construction markets were still experiencing low levels of activity and expectations of a recovery were pushed further out.
The rural market was still reducing debt levels and had experienced adverse weather conditions but it has been buoyed by forecast increases in the Fonterra milk payout.
The strength of the NZ dollar has also weighed on the returns likely to be generated by the rural sector and the manufacturing sector.
Chief executive Dave Taylor said that in the short term the company was experiencing a softening of demand in Christchurch as customers were disrupted and the council and other organisations completes reviews and rebuild preparations after the earthquake on September 4.
"In the medium and longer term, which certainly will extend into several years, we expect to fully participate in the rebuild, although it is too early to say what the size of this opportunity may be," he said.
