I will now hand the presentation over to CEO of Steel & Tube, Mark Malpass. Please go ahead.
Thank you and welcome everyone for joining the call. Here with me today is Richard Smyth, Steel & Tube's CFO. We'll start with a quick summary on our 2022 financial year, and then move into more detail on our financial results and strategic progress, and finish with a Q&A. The 2022 financial year allowed us to demonstrate the value of our turnaround and our focus on growth. We delivered a record financial performance and now have a robust operating model in place to support our growth ambitions. We have a very clear focus on two pathways of growth to continue to generate double-digit returns on our capital employed. Firstly, continuing to strengthen our core business, and secondly, to grow by investing in high-value products, services, and sectors. We are very well-positioned to deliver through the economic cycle.
We have the expertise in place, an operating platform and growth strategy that will create continued shareholder value. We're pleased to deliver record results in the 2022 financial year. This has been driven by our focus on the customer and adding value to our customers' businesses, operational performance and disciplined supply chain management, which meant that we were able to have inventory available when our customers needed it to support their growth across a range of sectors. Revenue increased 25% to almost NZD 600 million. EBIT increased 130% to NZD 47.6 million, with EBITDA up 73% to NZD 66.6 million, and profit almost doubling to NZD 30.2 million.
On the back of this strong performance, our board has declared a final dividend of NZD 0.075 per share, which will be 50% imputed, taking 2022 financial year dividends for the full year to NZD 0.13 per share. Other key metrics also improved. Return on funds employed was 14.6%. Our customer satisfaction or Net Promoter Score moved up to 40 versus an industry average of 32. Our employee satisfaction Net Promoter Score moved up to 35 versus an industry average of 18. This is a very good score. Also importantly, our safety, our employee total recordable injury frequency rate improved to 1.13, which is well below the industry average of 5.
Our long-term aim is to operate our business in a way that is financially rewarding for our shareholders and is positive for our people, our customers, and our planet. We have three key focus areas. Firstly, around maximizing steel contribution to a sustainable and low-emission society. Secondly, supporting our people and customers. Thirdly, delivering value to our shareholders. Our new initiative we are excited to support in 2023 is a carbon credit offer in conjunction with HERA, the Heavy Engineering Research Association, for infrastructure customers. Now customers who opt to offset the embodied carbon and steel they order with Steel & Tube will facilitate through our partners. These credits will be passed directly through the customer, with the cost used to fund the planting and protection of native trees across New Zealand and the Pacific Islands.
Steel & Tube doesn't make any money from this program. Moving to our ESG scorecard, we're very focused on continual improvement in key areas that matter to us. You can see that, as I mentioned earlier, both employee safety and employee engagement have improved significantly. Pleasingly, our people rated their satisfaction as 7.8 out of 10. Our general manager satisfaction is actually running at 9.5 out of 10, which is a reflection of a very strong culture at Steel & Tube. It's also worth noting that during the early stages in COVID, we recognized that mental wellbeing was going to be an important. During the lockdowns, we supported our people, not only financially, but also their wellbeing.
Every six weeks, excuse me, we have been continuing to run webinars on a range of topics that affect people both in the workplace and at home. These range from mental health, parenting, managing stress, financial advice, nutrition, and mindfulness. It was also important that our people and their families were healthy and safe, and we were the first company to invest in vaccine incentives. We pushed booster support and provided RAT tests for people to take home to their families. We've also invested in training and skill development while many of our workers were stuck at home. We did this both to keep them engaged and also to allow them to upskill and progress their careers. Customer satisfaction also continues to increase and reflects our ability to deliver products during what has been a very challenging year for our customers.
Our greenhouse gas emissions reduced year-over-year with a 21% reduction in emissions per NZD 1 million of revenue. This is a result of multiple supply chain and operational initiatives. Our company has been transformed over the last five years since we started our Project Strive program back in 2018. Our financial performance has improved significantly to this year's record results, with the embedded value now being realized from Project Strive and our growth strategy that is well underway. One of the key drivers in this fiscal year has been the recovery and uplift of economic activity, creating high demand for steel. Residential construction has been booming. Commercial construction and manufacturing have remained steady, and infrastructure is expanding with large ongoing projects such as three waters, wharfs, wind farms, rail bridges and motorway upgrades.
Steel & Tube is a diversified business and therefore is not unduly reliant on one or two sectors, which provides greater stability and demand and activity. You can see here our exposure across a diverse number of sectors. 50% of our sales are in commercial and residential construction, although residential is only 11% of that mix. Manufacturing is 31% of our sales, and 10% of our sales are in the engineering space, which is special steels used in machine shops and special plant and equipment and industrial projects. There's no doubt there's headwinds rising in terms of interest rates, and inflation that may result in some leveling off of construction activity late in the 2023 financial year.
At 11.4%, the company has a high dividend yield with total shareholder returns of 19.1% in the 2022 financial year. Net tangible assets are NZD 1.22 per share, and return on funds employed has grown 14.6% for the 2022 financial year. Steel & Tube has a clear forward strategy, a strong operating platform, and the means to invest in growth. The turnaround and commencement of the growth strategy has proved with this year's results. I'll now hand over to Richard Smyth to talk through the financials before I provide more information on our strategic progress.
Thanks, Mark. We are very pleased to be delivering such a strong record result for FY 2022. This chart shows a summary of our financial performance compared to last year.
Revenue, earnings, and profit are all up strongly year-on-year, with net profit after tax almost doubling to NZD 30.2 million. Normalized results have been adjusted to exclude non-trading costs of NZD 0.3 million, including the release of a holiday pay provision, an IFRS 16 impairment reversal, and SaaS expenses. The board is pleased to declare a final dividend of NZD 0.075 per share, which will be 50% imputed, taking full-year dividend to NZD 0.13 per share. Steel & Tube is well-positioned to deliver through the economic cycle while investing in growth. We have a strong balance sheet with low borrowings and a substantial bank facility in place. During the year, we utilized our strong cash position to invest in critical inventory, supporting our customers and mitigating supply chain headwinds.
The FY 2022 results marks the fourth consecutive half year of strong growth following the initial impact of COVID-19 in 2020. Now looking at the results in a bit more detail. Revenue increased by NZD 118 million to NZD 599 million. This was despite the impact of COVID-19 and the headwinds during FY 2022. Volumes also increased due to strong customer demand for a range of products. This strong trading momentum has been driven by our focus on customer service, trading disciplines, positive market conditions, and our ability to deliver on customer demand. Our primary focus on gross margin dollars per ton was reflected in a 1.9 percentage point increase in gross margin to 22.3%. This includes freight and direct and subcontractor labor. Excluding these costs, product margin was 34%.
We expect this to improve as we expand into higher value products, services, and sectors. At a business unit level, distribution performed strongly, benefiting from focused customer service, pricing and supply chain disciplines and inventory management. We expect margins to continue to improve with the current expansion of plate processing underway and other high-margin product opportunities being planned. In infrastructure, revenues increased despite the challenging market conditions. While margins were down slightly, primarily due to the impact of COVID on reinforcing, we have positioned this business to drive higher returns and lower risk. Roofing, which makes up 60% of infrastructure revenue, has grown significantly, as has purlins. We are also seeing increased demand for steel framing. We have continued our focus on cost management and our OpEx as a percentage of sales continues to decline.
The structural changes as part of Project Strive are now embedded with a NZD 12.3 million reduction from FY 2018. Normalized operating expenses increased in FY 2022 due to inflationary pressure, provisioning for incentive accruals, and increased depreciation. The positive volume and margin growth supported a 143% year-on-year increase in normalized EBIT to NZD 47.9 million. A key factor during the year has been our increased investment into high-demand critical products to ensure availability for our customers during a period of shipping and supply chain disruption. This saw our inventory increase by around NZD 79 million year-on-year. This was mostly due to higher prices. Pleasingly, our inventory terms have remained consistent with previous periods. Strong cash flow. Cash inflows reflect increased revenues with major cash outflow being the investment in inventory, dividend payments, and other working capital movements.
We are comfortable with our net debt of NZD 43 million. Following the utilization of our tax losses, we have started to pay company tax in FY 2023. The FY 2022 CapEx of just over NZD 6 million was slightly up on 2021 and remains in line with depreciation and amortization. The majority of the spend was supporting digital and growth initiatives, and this focus will continue into the new year. We will also continue investing in processing equipment that will open up identified market opportunities and other growth opportunities. Thank you for your time, and I'll pass you back to Mark.
Thanks, Richard. Our purpose, our goal is simple, to make life easy for our customers needing steel solutions and to be their supplier of choice.
We continue to build on initiatives under each of the five pathways, which are again focused on our customers, our people, our technology, service, and operational efficiency. Elevated global demand is expected to continue. The Russia-Ukraine conflict has impacted the global steel markets. Longer term, we expect the Ukraine rebuild will have a large demand for steel. The New Zealand customer demand is expected to remain strong in the near to medium term. Average steel pricing increased through the 2022 financial year by 27% due to a mix of reduced output from China. China accounts for over 50% of the world's steel production. Due to an increase in global demand for steel, both manufactured consumer goods and also government stimulus programs that were put in place post-COVID.
Inflation, including rising costs of raw materials, freight, fuel, and labor, are driving up the price of steel, which is being passed through to customers via distributors. The supply chain disruptions and elevated shipping costs are expected to ease in the 2023 financial year, although there is still a long road back to normal. At a sector level, the 2023 financial year, we expect momentum in infrastructure as the sector large-scale projects come online, many of which steel is an essential material. Manufacturing and commercial construction activity is expected to build and residential construction will moderate. We are seeing increased demand for project work as all sectors of the economy become fully productive again. Our strengths position us to deliver through the economic cycle. We are a diversified company across a range of sectors.
Our investment and leadership in the digital technology space is also paying dividends across all areas of our business, driving efficiency for our customers and for Steel & Tube. Our strong inventory management and supply chain disciplines, as well as our digital analytical tools, have been of significant value through the current environment, meaning that we've been able to support and add value to our customers' businesses. We have a robust operating platform and are continuing to strengthen our core to deliver further efficiencies and values for our customer. We have a clear growth strategy in place with initiatives underway and set to deliver in this financial year and beyond. Continuing volatility in both the global and the local economy is expected. Customer demand is also anticipated to remain strong in the near to medium term.
Steel pricing is expected to remain elevated and inflation remain high, with rising interest rates and cost pressures on freight, fuel, and labor. On the positive side, we do not expect any further lockdowns from COVID-19, and we're starting to see supply chain congestion ease, which will benefit all businesses. These changing conditions have been a critical part of our risk planning, with a variety of initiatives and responses put in place to mitigate our risk and help maximize opportunities in the current environment. We'll continue to monitor these risks and update our plans as needed. With a strong business platform now embedded, we've moved to focus on growth. In particular, our efforts are concentrated on two key areas to drive gross margin improvements and add value to our customers' businesses by, one, strengthening our core foundation and, two, growing higher-value products, services, and sectors.
Building on our core involves strengthening of our business foundation that's now been put in place. Building best-in-class customer service, leveraging our industry-leading digital platform, that will help improve efficiency both for our customers and ourselves. Secondly, leveraging our breadth of scale to cross-sell a wider range of products and services. Our digital strategy is a key enabler for our business and provides a significant competitive advantage in what has been a very traditional analog business. We've seen digital steel trading emerge in the U.S. and in Europe, which provides us with continued conviction to invest in our digital and IT offering and accelerate our shift to digital sales, making it easy for our customers and delivering efficiencies both for them and us, and also helping to contribute more to New Zealand Inc.
In terms of transitioning the building supply, services model. Investing in high value products, services, and sectors is focused on extending what we can offer to our customers. This includes adjacent materials and value-added services. Diversifying customer segments and building scale and footprint in these areas is important. While our primary focus is on organic growth, we also continue to consider opportunities in adjacent sectors. We are mindful of the investment shareholders make in our company and do not believe in growth for growth's sake. Instead, we have a very disciplined approach to investing in new opportunities, so to ensure that we deliver financial and strategic value. Two examples of this growth, our strategy in action, are our recent investment in expanding our plate processing capabilities and the acquisition of Kiwi Pipes & Fittings. Firstly, in plate processing, we've acquired new high-capacity equipment to expand our capability and offer.
This was operational in June this year, and plate processing is a high-value category with strong demand that provides attractive margins. It builds on our existing offer, and we already have a very strong workload in place. On the 1st of August, we acquired Kiwi Pipes, which is also symbolic of our strategy to selectively invest in high-value products and sectors. Kiwi is a small business that specializes in fire and water reticulation products. It builds on our existing offer and provides scale and market share growth as well as being immediately earnings accretive. You can see on this slide our key initiatives and each of their current states. We are in an early stage with many of our opportunities, with the full benefit and value yet to be realized.
Looking at our outlook for the 2023 financial year, we're expecting continued volatility in the global and local economy. Steel demand is anticipated to remain strong across a range of sectors. Steel pricing is also expected to remain elevated in the near term. Longer term, demand in some sectors, for example, residential, will moderate from the extraordinary demand we've been seeing. We have a clear focus on continuing to strengthen the core and investing in high-value products, services, and sectors. While the majority of our growth will be organic, we will also continue to consider small bolt-on acquisitions where they meet our criteria. The benefits of the current strategic initiatives are expected to commence in this financial year and be fully reflected in results from 2024 financial year. Our goal is to continue to deliver sustainable double-digit growth. Thank you for listening.
I'll now hand over to the operator to open up for questions.
Thank you. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. A voice prompt on the phone line will indicate when your line is open. Please state your name and company at the tone before posing a question. Again, press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. Thank you.
Okay. If there's no questions coming in. We've had a couple of questions come in online, so we can pick those up.
The first question we've got is, what do you mean by programmatic M&A? What size acquisitions, and how frequently do you expect to make these?
Yeah. Good question. I guess just backing up on that question a little bit. I mean, we've done a fair bit of research as to distributors in the U.S. and Europe, what really drives success for them. We've learned through those observations that really programmatic M&A is certainly a lever that we've observed has helped us drive success. When you look at downstream value-added services, we've talked about plate processing, we've talked about fire and reticulation sector that we've got into. We've identified a window of sectors that we're currently supplying that we would like to grow further and have set some fairly clear M&A criteria in place around how we might want to either organically grow or grow via smaller programmatic M&A.
We sort of see this as being, you know, somewhere in the range of 5%-15% of our market capitalization. Fairly small M&A that we believe that is a helpful pathway for accretive growth.
We have another question. Do you expect dividends at the same level going forward, and will these be imputed?
The Board policy is to pay a dividend between 60%-80% of adjusted profit. The current dividend is about 71%. It would be our expectation to continue that going forward, and also it's our expectation to be able to fully impute dividends from the next dividend. Once again, that is subject to board approval each dividend.
We've got no more questions online at this stage.
Okay. Any questions from anyone on the call?
There isn't one anymore. There was one earlier waiting. Once again, ladies and gentlemen, if you would like to ask questions, please press star one on your telephone keypad. Thank you. Over to you, Mark.
Okay. Well, thank you all for joining the call, and I'll now close the session. Thank you. I'll hand over to the moderator to shut the call down. Thank you.
Ladies and gentlemen, this concludes today's call. Thank you for your participation. Stay safe. You may now disconnect.