Vulcan delivers earnings upgrade

The premises of Vulcan Steel in East Tamaki. Photo Kevin Fakapulia M Apelu

A billion dollar company founded by Bucklands Beach man Peter Wells and listed on both the NZ and Australian stock exchanges has announced a significant earnings upgrade for the year to June 30 2022.

Vulcan Steel, an industrial product distributor and processor, last week advised the market that its overall revenue is up 35 per cent year-on-year (yoy) for the five months to November 30 2021.

The company’s steel segment revenue rose 42 per cent (yoy) while its metals segment grew 22 per cent (yoy) during this period.

Overall sales volume saw an 11 per cent (yoy) increase for the same period. Steel volum lifted 12 per cent (yoy) while metals volume grew 7 per cent (yoy).

“Following the conclusion of stronger than expected October and November trading and reflecting the volume uncertainty of the December and January holiday period, Vulcan is revising its FY22 (full year 2022) earnings forecasts contained in the company’s prospectus,” the company said.

New guidance points to earnings (EBITDA) of $174 million to $184m, and 18-25 per cent upgrade on the $147m posted in the prospectus.

Vulcan now expects net profit in the range $93m-$100m, up from $74m in the prospectus – a 26-35 per cent upgrade.

Vulcan’s managing director and CEO Rhys Jones said will be fewer trading days in the second half of FY22 compared with previous corresponding period in FY21 due to the timing of public holidays and an additional national holiday in New Zealand.

“Trading has been stronger than anticipated and has been broad-based across all our Australasia business units, especially in October and November as Sydney and Melbourne emerged from Covid-19 restrictions,” Jones said.

“As an industrial distributor and value-added processor, we remain confident of our ability to maintain our high service level and product availability to meet the needs of our growing and diverse customer base.”

Vulcan was founded by Peter Wells in 1995. Wells, from Bucklands Beach, is listed as one of seven company directors, according to the NZ Companies Register.

On December 14 it was trading at $9.38 a share on the NZX. Its market cap – the value of all the company’s shares – at that time was $1.23b.