Thank you very much, and thank you to everyone for joining the call for Vulcan Steel Half Year FY26 Result. We have our CFO, Kar Yue, our COO, Adrian Casey, our New Zealand business, and we've also got our Company Secretary, Sarah Jane. If we could turn to the agenda. In the call this morning, we'll cover the overview of the results. We'll have a look at financials and priorities and outlook. If we go to page six, to cover off a few points on the performance of our business. The revenue is up at NZD 535 million, up 8.6% for the three months of sales from the acquisition of Roofing Industries. Our adjusted, included the impact of Roofing Industries from the 1st of October.
Growth %, reflecting the impact of mix and also margin pressure to 33.9. The Vulcan Board also approved the interim dividends of 2.0 flats with last year. If we go to page- and operational highlights, the team Roofing Industries on the 30th September, the integration of the business is on track, and the highlight has been the. We've also continued to focus on our delivering full metrics, ensuring we have the right stock in the right location at the right time. We continue to execute on our hybrid rollout strategy, with three sites completed in the first half of FY26. We recorded sales growth year-on-year with an impression. The first half of 2026 also included the three months impact of Roofing Industries. Cost management with investment into hybrid sites and increasing capacity where we've required it.
We continue to generate cash flow and manage working capital to support the investment in our business, reduce our debt levels. If we turn to the Vulcan's highlights. With the purchase of Roofing Industries, we four divisions under our steel segment, which now three existing divisions under our metals. 89% of our sales, with Australia 61%, and New Zealand at 23% of total sales. The map of our current footprint across Australia and New Zealand, and with the addition of Roofing Industries, we now have 81 sites across Australia and New Zealand, serving over 25,000 customers. Page 10, we have our growth strategy. We have, we've had them now for a long time on our focus on growing the business, and we'll continue to look at opportunities to improve and expand and also to grow.
If we turn to page 12, and we'll have a look at FY26. In Australia, with some activity increasing in our steel division, particularly in the second, albeit what has been off a low base. Industry profitability is still at this stage, we've seen no Olympic project or activity in Queensland, and this is unlikely to impact in this current year and likely to be pushed out to FY27 and beyond. In New Zealand, with the reduction, the sense of an economic recovery is starting to emerge, and we've seen, seen some positive signs of improvement in activity over Q2 of FY26, still a challenge. From a global economic perspective, uncertainty- steel prices have remained subdued, but we are seeing some pressure on pricing with aluminum and nickel, both increasing over the last couple of months.
In Australia, with a pickup in the economy, the Olympic projects likely to place further pressure on labor cost. I'll hand you over to Kar Yue, who will take us through the financial performance.
Thank you, Gavin. Good morning. Our 8.6% year-on-year revenue growth in the first half was a combination of three things. One, first, two, improvement in underlying volume. There's three, lower revenue per ton, which offset the first two. Earnings before interest tax and depreciation and amortization or EBITDA for the half-year-on-year basis at AUD 57 million, was offset by continued industry pressure on other parts of our businesses. Some participant off margin for volume. Despite our earnings holding the bottom of the industry cycle, our cash flow and return on capital encouragingly remains sound, at sound levels. Slide, compartmentalizing the key drivers of our earnings change in the first half for me. 11% higher overall volume to profitability, AUD 18 million. This of a ton and higher operating cost, which is partly driven by our investment for growth.
Segment level on the next slide, please. Steel segment result in the first half was ahead of a year ago. Revenue, GP dollar per ton, inclusive of roll forming, as well as. In our metal segment, the performance was mixed across Australia and New Zealand. Segment EBITDA on year to NZD 3 7 million. This reflected a combination of volume and margin outcomes year on. Turning to our cash flow on the next slide. Our business generated this from operation after paying CapEx and also capital expenditure, and also lease lines generated AUD 16 million in free cash before including capital raising, the initial payment for acquisition, and also any dividend payments. Including patient for capital expenditure between NZD 30 million-NZD 35 million for the full current financial year. The NZD 2 million final settlement for Roofing Industries acquisition was paid in January 2020.
Now, turning to slide 17, as Gavin mentioned, has been set at NZD 0.025 per share. This will be fully franked and imputed. Our net debt finished at NZD 202 million for the first half year.
With a net debt 2.9 times, as you expect, that's conventionally done on a pre-IFRS 16 base calculation purpose in terms of the debt covenants.
Heading, now turn to page 19, we'll run through our priorities. We focus on our delivery and full on time and supporting our customers whilst focused on. We'll manage through the recovery, recovery in the economic cycle in both Australia and New Zealand, Roofing Industries, to continue to build on our aspirations of growth in that space. We'll continue to develop our people across all levels and explore opportunities to further grow our business. If we turn to page 20, whilst conditions are still challenging in both countries, we're beginning to see some signs of recovery. In New Zealand, the low, we expect to see a gradual recovery of volume into the second half, although industry profitability.
Activity in Australia has also started to pick up, but with inflation a watch and increasing activity of Olympic volume unlikely to impact us into FY27 and beyond. With that done, we'll now open up to.
Thank you. Wish to ask a question, please press star one on your telephone keypad and wait for your name to be. Request, please press star two. If you are on a speakerphone, please pick up the handset to ask. Your first question comes from RBC Capital Markets. Please go ahead.
Hi, guys. Thanks for doing the result. Just a quick one on the Roofing Industries and half 26. Is it better for us to take the off the first half of the AUD 3 million, or if you have used the AUD 1 million? A follow-up question around the -
Okay.
if you can just off some commentary around that. Thanks.
Yeah, appreciate it. Thanks, Tom. I'll hand across to Kar Yue will take us on for your question.
If you think about the numbers before we actually dive into like for the second half, just note that we're very early of this business, and so we're still building our understanding for things like seasonality, commercial versus residential, which in itself has got its own differences in terms of seasonality. I would be cautious extrapolating just one quarter for the rest of the financial year. The performance was encouraging, no doubt, wanted to be clear on that. Certainly the December quarter, typically from what we think, represents a slightly higher contribution in terms of volume to a-
Great. Thank you. Am I right in saying that that's shifted higher a little bit? Are you able to-
For clarity, the previous CapEx guidance was in the range. So that increase really reflects CapEx we will now have going forward with Roofing Industries.
Awesome. Thanks very much.
Your next question is from Harry Saunders with E&P. Please proceed.
Good morning. Thanks. Just wondering if you could provide your thoughts on the recent news flow around relating to allegations of dumping in the steel industry, you know, with reference to fabricated steel imports. If safeguard measures are found to be justified and implemented, I mean, how material the benefit could be, maybe how, how long would that take? Thanks.
Yep. It's been well publicized around the safeguard measure initiative steel. There was a proposal submitted pre-Christmas that is now, we're not expecting anything to come back till later this year. What that in, in essence means is that, pre, offshore fabrication coming into Australia was the base of about 300,000 tons, jumped to about 700,000 tons over the last 18 months. To potentially cap that and look at putting a charge or putting a tariff on 200,000 tons. If that happens, clearly there's going to be some actions. The impact of that is unknown, I think it's really important from an industry perspective, giving the opportunities to fabricators to be able to compete in a level playing field.
I think some of the product coming from offshore at, at lower prices. This year, we'll watch it closely, but yeah, we haven't got any forecasts or projections to give you at this stage.
Understood. Thank you. I'm just wondering if you could provide an update on some of those competitive pressures and, and Australia in, in both steel and metals, you know, any, the industry in either region and, and maybe what you would need to see, change for that to subside.
Yeah, look, if I start, starting with Australia first, some of the competitive landscape, particularly in Australia. I've seen one of our competitors close down some locations in each of them. Initially, the impact of that was seeing some additional volume to clear our stock, but that is now starting to rationalize and, and sort itself out. We are still seeing some pressure in some of our market in Australia, and those pressures will come from both mining and other end. A little bit slower than what we've seen in the past. From a, from a New Zealand perspective, again, we're seeing some pride that we really talked about, I think when we, when we released our full-year results back in August, changed.
I think there is, both a, a pressure on working capital, in, in, but there's also a drive to grow volume and, and impact that continue to play out here. Look, we stick to what we do, we manage our business, and we continue to look at how we provide great customer service and delivery.
That's great. Thank you. Could we discuss, you know, working capital requirements through the balance of the year relative to your, you know, improved net debt?
Yeah, I'll, I'll give a brief overview, and I'll throw across to Kar Yue, who. We're absolutely focused on, and you saw it in the comment, having the right stock, the right location at the right time, and I think that's making sure we understand as this economic activity gives the stock we need, we understand our customer's requirements. That's, that's a balancing act we, but it's also making sure that we understand the stock and the requirements that we need to have in location focus for Kar Yue, do you want to talk about some of the working capital needs?
Yes, sure thing. Really, just to echo Gavin's point around optimization of stock ourselves, in, to, to a high steady with customers rings us for, for certain SKUs. That's not just category stock, but individual stock unit. In terms of overall directionally, over the next 12 to 18 months, you should expect some increases in overall working capital. In no small part because you've been around, material prices are starting to rise, whether it's our stainless product, obviously. On top of that, when the cycle recovery, full flight over the next 12 to 18 months, we would expect in terms of stock, that we want you to meet those ramp up in demand. That's a, a very managed, and gradual program, a short and sharp movement.
Yeah. Remember, the lead time, quite a few months.
Yeah.
The impact of this financial year won't be substantial.
Great, thank you.
Question is from Rohan Koreman-Smit with Forsyth Barr. Please proceed.
Gavin, just a question, first of all, on, on numbers. You know, it looks like the revenue similar, you know, if you look at the 6-month versus 3-month ownership stats. The NPAT kinda goes from six to three. Is, is that an issue it, in terms of, you know, you have seen some margin, just given your comment on higher quarterly volumes in the December quarter?
I'm happy to take it, that call. Good morning, Rohan. Thanks for the question. I probably, but we took ownership, obviously, of the business, effective 1 October. The accounting standards provide some commentary around the basis at ownership effective from 1 July. In that respect, there was some synchronization policy that we needed to go back and rework the historical data that was, and as a result of that, you, that contributed to what appeared to be in the September quarter. Also, as I mentioned earlier on, there is some numbers here, or certainly seasonality during the year, in any given year for.
Thanks. Just in New Zealand competitive environment, have you change or any attempt to increase prices? I mean, I've heard there's been a few price increase notices potentially in the market, but I just wondered if there is anything that you can point to there around prices hitting higher domestically or also, you know, a view on what happens in terms of potential rationalization.
I mean, on the pricing. I think there has been the intent throughout the first half of this year, I think the execution has been mixed, so I think we haven't always seen. To me, that's just a, a focus on capability and discipline to make sure you do that. In regards to consolidation, phase out, over time, it's not something that, that we'll comment on here.
Okay, then in Australia, just long steel pricing has been something that have been suppressed with-
Yeah.
Tie up. Have you seen long steel price, prices return to normal or margin yet?
They're beginning to. What we're seeing is that, probably about May, June last year, and we're seeing the sort of consistency in the cost base. We're seeing, I think, apart from, you know, one of the competitors began to exit some locations, and we had some excess stock floating around for a while. We've seen probably a market over the last six months. We've seen, I think, a little bit more, which has been, I think, a, a positive tick, but we're still seeing some changes with our wireless still to play out obviously, over time and also, again.
Cool, thanks. I'll let someone else have a go.
Thanks.
Your next question is from Will Wilson with UBS. Please proceed.
Congrats on what seems like a really good result. Just on Roofing Industries, the potential step down this year, due to it being late cycle and just where the kind of market was at that point in time, didn't seem to eventuate, at least on my end, the broader market probably being a bit better, or was it more... Did you gain some share there?
Look, I, I, I think from my, my perspective on Roofing Industries, I think clearly, we've only had it for a couple of months. Actually, it's been really well managed. Probably just wanted to do a shout-out. I think the culture and the capability of the team has been excellent on those opportunities, through consolidation, about how we actually invest in the business. One thing I, I probably just need to shout out is that I think, you know, you know, Dave Blackley and the team have always invested in the business and it's, so it's almost been seamless for us. I might see if Adrian just wants to comment quickly on the, the quarter results.
Thanks, Gavin. Just reiterating, Gavin, the business is well set for the future. If we have a look at the people and the culture and the values, they're 100% aligned to or when we did DD. If we look at the, the, just the trading environment, tick up this quarter, it's more the market is slightly better. The team, have a look at the, the footprint, 15 sites, seven of them have moved into in the last 18 months. There with increased capacity. You put, put, put all that together, and we've owned the business, but very encouraging.
Then just on the OpEx, it obviously, axle forging, like, stepped up the largest amount and a few, a bunch of that's probably due to just the step-up in volumes that you experienced as well. Cost inflation or just like you, you've referenced, is positioning the business for growth?
The both. As we look at our, our cost base, clearly, there's inflation to manage, and that will continue, I think, into the future, particularly as we see... I think there's gonna be some pressure in Australia as we see some labor shortages and where that's gonna come from. You've seen some of the inflation prints in the last month or so there. I think the other point is, yeah, we are absolutely focused on continuing to invest where we need to invest, and, and that's both from a capacity perspective, but also as we, as we make sure we've got the right people in the right roles. You know, there are opportunities which we've seen, we've, we've invested back in the business, and we want to invest to make sure we're in and build on our business.
Awesome. That's all from me for now. Thank you very much. Appreciate it.
Thanks. Thanks, Will.
As a reminder, just star one on your telephone keypad if you would like to ask a question. Questions at this time, I'll hand the call back over to Gavin Street for closing remarks.
Thank you very much. Look, I just wanted to thank everybody for dialing, yeah, hopefully, to continue to grow our business and move forward. Thank you very much.