Steel & Tube decides 50 years is enough for its audit systems

By ELLEN READ and NZPA

Following a review of its corporate governance, Steel & Tube Holdings is putting its external audit up for tender for the first time in 50 years.

Chairman Rob Every told yesterday's annual meeting that the company would also change to managing its own internal audit procedures.

PricewaterhouseCoopers had performed both roles for around 50 years.

"These decision have been made for reasons of good corporate governance and are not due to any performance issues," Every said.

PricewaterhouseCoopers will be invited to participate in the tender.

Shareholders were told its first quarter profit was up 21 per cent on the same period last year on the tail of New Zealand's economic growth.

Piping Systems, which the company acquired in May, contributed 7 percentage points to the increase - for which no figure was given.

Chief executive Nick Calavrias said fat farm earnings would continue to push up profits until Christmas, but it needed construction and consumer spending to fill the vacuum as the rural sector drew back.

"We are concerned because farming income is going to be less, and that has been primarily driving the New Zealand economy during the last two to three years," Calavrias said.

The Lower Hutt-based company, half-owned by Australian long products steel maker OneSteel, made a net profit after tax of $18.3 million for the year to June 30, up 23 per cent on the previous year.

Steel & Tube starts a buyback programme of up to 8.78 million shares today, after deciding last month not to make further acquisitions with capital left over from selling Canadian subsidiary A. J. Forsyth.

The programme target is to buy up to 4.39 million shares on-market by next September.

This will be matched by off-market purchases from OneSteel's subsidiary Tubemakers NZ to keep its shareholding under 50.3 per cent.

Even after the buyback, the company would be conservatively geared and able to pursue growth opportunities, Calavrias said.

Steel & Tube shares closed at $3.06 yesterday.