I will now hand the presentation over to the CEO of Steel & Tube, Mark Malpass. Please go ahead.
Welcome everyone, and thanks for joining us today. On the call with me is Richard Smyth, our CFO. Today, we'll cover our financial results, our strategic progress over the last six months before looking at what we expect for the second half of the financial year. Moving to the results, overview snapshot. Steel & Tube's delivered a strong performance in the first half of the financial year with record revenue and earnings. The result has been driven by a couple of factors. Firstly, positive economic activity, driving increased demand for steel across a range of sectors. Secondly, embedded value from the long-term structural changes that we have made that are now delivering sustainable margin improvements. Profit was $ 14.3 million for the first six months. That's up 253% on the prior comparative period.
The board has also declared an interim unimputed dividend of $ 0.055 a share, and it's a significant increase over the $ 0.0121 for the comparative period last year. Pleasingly, we have also delivered strong results across all other key business measures, including order delivery and full on-time deliveries, safety and customer and employee satisfaction. Moving to market conditions. The first six months has seen a continuation of the COVID-related challenges with the lockdown and then ongoing restrictions in Auckland from August through to December. We have also had labor constraints, steel mill and supply chain congestion, which has impacted on stock availability. Steel pricing has increased due to a mix of, you know, reduced output from China, which accounts for over half the world's steel output.
Secondly, increase in global demand for steel, both for manufactured consumer goods as well as government stimulus programs have been driving that demand. We expect that long-term demand trend to continue for some time. This intensified activity has also been felt in the residential building environment, which has continued during the six-month period. We saw a recovery in most other sectors, including, the commercial building markets, which have been softer in previous periods. The infrastructure pipeline continues to grow and manufacturing is expanding. We have a number of advantages in this environment. Firstly, we're a diversified player across a range of the sectors. We have size, scale and very strong supplier relationships that mitigate a lot of the risk from the supply chain pressures. Our investment into technology is also paying dividends across many of the areas of our business.
Our focus has been on maintaining availability with high levels of service for our customers while navigating the global steel mill and supply chain constraints, as well as high pricing environment and the COVID-19 restrictions. Our strong inventory management and supply chain disciplines have also been of significant value in this environment. Moving to the economic drivers. This slide really demonstrates some of the economic drivers behind the increased steel demand. You can see the residential consents have continued to rise. The non-residential, or as we refer, commercial, consents are also starting to recover. The manufacturing PMI index is expanding. Infrastructure construction is also on the rise as government spending catches up with a long period of underinvestment. Our strength is the diversification of our business with limited exposure to any one sector.
You know, construction is certainly an important part of our mix, but we also have 14% exposure to infrastructure and a further 31% exposure to the manufacturing sector. We've built a strong foundation. The Project Strive program has now been completed and has delivered significant value for our business. Our national network has been optimized with a reduction in our footprint, reducing our annual lease cost by about $ 2.5 million a year. We have a laser focus on our customers with resources and tools in place to ensure that we can deliver outstanding customer service. We've seen significant cost reductions and efficiencies that are now locked in.
We have a robust balance sheet with gross debt reduced from a little over $ 133 million in June 2017 down to a couple of $1 million at the end of December 2021. Our investment into operational excellence and supply chain disciplines is also delivering value, particularly in this current environment, and sets us apart from many others in our sector. These structural changes are now embedded, and we move forward with a really strong foundation for growth. Moving to the group financial summary for the last six months. We've delivered a record half-year performance, excuse me. We're slightly exceeding the top end of the guidance that we gave in partway through December. Our volumes and revenue growth have grown strongly compared to the prior comparative period.
The structural reduction in operating expenses from our strategic initiatives is now locked in. Our priority focus has been to ensure that high demand critical items are available for our customers. We've utilized our strong cash position to invest in increased levels of fast-moving stock. Our expert supply chain team have really taken a very targeted approach to using data analytics to support our investment decisions and inventory. We've also seen the impact of the supply chain congestion on our cash flow. We retain a strong balance sheet with very low borrowings. The board have been pleased to declare an interim unimputed dividend of $ 0.055 a share. I'm now gonna hand over to Richard to go through some of the details in our financial results.
Thanks, Mark, and certainly a pleasure to talk about our results today. As you have been previously advised, COVID-19 had a significant impact on quarter one, with the majority of New Zealand businesses and projects shut down for up to five weeks. Pleasingly, most of the demand was simply deferred until the economy reopened, and we saw strong trading both before and after the lockdowns. Revenues grew 25% to $ 282 million, an increase of $56 million on the prior first half year. Volumes also increased strongly from 74,000-83,000 tonnes. Our distribution division provided 64% of revenue. This division was less affected by COVID-19 restrictions, with significant value being provided by our omni-channel platform and our nationwide network.
Customers were able to order products at a time and place that suited them with stock freighted to our regional warehouses and then on to customers. Distribution revenues, volumes, and EBIT grew strongly, as did gross margin and gross margin percentage. The infrastructure division, which predominantly processes products to customers' specifications, and often for large projects, was more impacted by COVID-19 restrictions, with the majority of our manufacturing based in Auckland. The strict restrictions have also impacted on customer projects and access for our installation teams. Despite this, the infrastructure's revenues grew year on year, as did gross margin. As you can see on this slide, the impact of COVID-19 and at lockdown and the level three operating restrictions on our business, as well as the strong trading both before and after the lockdown.
After two years of operating in a COVID environment, we now have established processes and plans in place to ensure we keep operating as efficiently as possible, our staff and customers safe. Omicron is expected to escalate over the next few weeks and cause disruption for a number of months. All Steel & Tube employees are vaccinated, and careful planning has been undertaken to minimize the risks to our customers, business, workforce, and supply chain. The company is also registered as a critical service as part of the Close Contact Exemption Scheme. Looking at gross margin. Improvement remains a priority focus for us, and we are pleased to report gross margin percentage increased to 22.8%, up from 20.3% in the first half last year.
This is mainly driven by the lower fixed cost base as a result of structural business changes, disciplined price and cost management with recovery of cost inflation and pricing, and a shift in product mix, as well as where we have targeted more attractive higher margin categories. We also had a small amount of benefit from older stock bought at lower prices. However, this is becoming less relevant with the average stock turn of around three to four months on critical items, with replacement stock being purchased at higher prices. We continued to effectively manage operating expenses. The completion of the three-year Project Strive program has delivered structural business change and a reduction of operating costs, which are now embedded into the business.
The first half 2022 normalized operating expenses grew by $ 4.7 million, mainly as a result of inflationary pressure, in particular wage and salary inflation, and the inclusion of incentive accruals and provisions, which were not included in the prior half year. Pleasingly, our OpEx as a percentage of sales has continued to reduce and was down to 15% for the period. This waterfall graph shows the key drivers of our significant improvement in EBIT, increasing from $ 8.3 million in the first half 2021 to $ 22.5 million in the current half. We maintain a strong balance sheet with limited borrowing and substantial bank facilities in place. Our disciplined approach to working capital continues, with a targeted increase in inventories as we invest in critical stock items to meet both sales demand and also to mitigate supply chain headwinds.
Our interim dividend of $ 0.055 per share is in line with Steel & Tube's dividend policy of 60%-80% of adjusted full- year NPAT. Turning to inventory management, we have a very targeted and analytical approach to supply chain planning and inventory management. In New Zealand, demand has increased to unprecedented levels, and the main suppliers are at capacity, with their production also impacted by COVID lockdowns and operating restrictions, as well as delays in access to raw materials. Lead times have blown out. For example, in New Zealand, the lead time for coil and roofing has increased from six to 16 weeks in the last six months. Average global lead times have increased to up to six months in some categories. Therefore, we have needed to order more from a range of offshore providers.
Alongside the shipping issue, this has meant longer lead times and more goods in transit. This has tied up more of our cash. Currently, about 40% of our stock is sourced locally, with the remainder sourced offshore. Freight costs have also increased, adding to the rising price of steel products. We have strong partnerships with shipping and freight forwarding suppliers, which is helping to mitigate some of these costs. The use of data analytics and the experiences of our supply chain management team are valuable tools in this environment.
A priority in the last six months has been on managing the supply chain to ensure we can provide stock availability to our customers. In particular, we have prioritized critical high turnover items. We have more stock in transit, both domestically and internationally, as a result of the increased orders to both meet demand and offset the longer lead times. Given the uncertainty of supply chains, we have also purposely added an additional buffer to our critical items to ensure we have stock on hand when our customers need it. Pleasingly, our DIFOT metric, Delivered In- Full, On- Time, is 98% for those items which are most important to our customers. Given the COVID-19 environment, CapEx has been reduced below depreciation levels. However, we expect to increase this as we invest into identified manufacturing and product opportunities as well as our digital strategy.
Mark will talk about this in more detail shortly. I'll now hand you back to Mark.
Thanks, Richard. Looking at our business scorecard in the key areas that matters to us, the safety of our workforce remains a key priority for our employees. You can see the TRIFR, the employee TRIFR or total recordable injury frequency rate, is down to 1.27. That's versus about 3.35 for the prior comparative period. That is now a rate that's well below industry levels. Our customer satisfaction rose strongly after the lockdown as our team worked hard to meet deferred and new demand. With an average net promoter score of 41 for the six-month period, that's versus 34 for the prior comparative period. We have approximately 13,000 active customers, and this number continues to grow.
Our people are an essential part of our business, obviously, and we have strategies in place to recruit, retain, develop, and reward our people. In particular, we're building on the foundational work that we did last year to introduce new internships, work programs and mentoring. We have also established career pathway planning across the organization. Steel & Tube took a lead, and was one of the first businesses to offer the vaccine incentive. This is very well supported by our team, and we have recently arranged an on-site booster program, where we've been getting booster buses to our key locations. We've done a lot of planning around Omicron, and we will be using the rapid antigen test system to ensure that our staff are safe at work. We have also been approved for the Close Contact Exemption Scheme Critical Services Register.
Our employee engagement scores increased to 29, that's versus 13 in the prior comparative period. We've also had employee satisfaction or engagement, overall engagement level of 7.7 out of 10, which is an outstanding result. Creating a sustainable business underpins everything that we do, and we remain focused on initiatives to reduce our greenhouse gas emissions. I also wanted to take the opportunity on behalf of the board and management to acknowledge the efforts of our team who continue to deliver day in, day out for our customers and our shareholders during these challenging times. Moving to our purpose, our goal is very simple: to make life easy for our customers needing steel solutions and to be their preferred choice of supplier.
We continue to build initiatives under each of the five pathways which are focused on customer, our people, technology, service, and operational efficiency. Our strategic focus chart. Strategically, we continue to build on our strong business foundation that we now have in place, with a focus on the digital and IT initiatives. Our gross margin dollar improvement and operational efficiencies remain a priority, and we will leverage our breadth and scale to cross-sell a wider range of products and services. We're investing in new products and opportunities that will extend what we can offer to our customers, and we will continue to invest in our marketing and sales to build that demand. While our primary focus is on organic growth, we are also considering opportunities in adjacent sectors.
Technology remains one of our biggest investment areas, and we continue to invest in e-commerce, customer experience, analytics, cloud technology, and investing in Industry 4.0 initiatives. These investments make us more competitive and will enable a best-in-class customer experience for our customers. In particular, in the last six months, we've implemented enhanced pricing and margin management capabilities, and we've also implemented customer management CRM tools. Our e-commerce channel continues to grow in popularity and increasing numbers of customers placing orders, often which are of higher value than our comparative sort of analog customers. We've identified several opportunities in the high-margin sectors, which we already have a footprint in, and we believe we can grow market share in.
One such opportunity is in added value plate processing sector, where we are investing in new high-tech capacity, so big bed equipment, that will expand our plate processing capability and offer. This new equipment will replace our older machinery, and we expect to be commissioned in the fourth quarter of this current financial year. This is a category with very strong demand that provides attractive margins. Our expanded capability will allow us to benefit from growing demand in this value-added processed steel plate sector while continuing to supply our existing processing customers. Another identified opportunity is within the steel frame housing sector.
While steel frame housing currently only makes up about 8%-10% of the total market, we expect this to grow given the long-term timber supply constraints and the environmental advantages that steel framing offers, which is infinitely recyclable. Now, as a yardstick, if you look at steel frame housing in the state of Queensland, Australia, it now accounts for about 20% of that market. We're also seeing increased interest from developers who are keen to convert some of their existing current timber designs across steel framing and to design future projects in steel. We currently supply coil through our rollforming business to steel frame manufacturing customers, and we estimate that we currently meet about 50% of the market demand.
Our plan is to expand our customer base to housing developers and to provide them with fabricated frame and truss. Now to support this, we've also awarded some state-of-the-art equipment supported by high-tech software, which we expect to commission also in the fourth quarter of this financial year. These are both exciting opportunities in the added value sector that give you an insight as to some of the higher margin growth potential that we're focused on. In addition, we have also identified new adjacent product growth investments that we're currently considering but not ready to announce. Moving to the second half outlook. Despite the headwinds, our market conditions do look to remain positive. The commercial markets, infrastructure, and manufacturing are all expected to grow.
While the current residential boom is expected to ease over time due to the rising mortgage rates and also increased supply, there is still a long runway of orders and current levels of building activity that are expected to be maintained in the short term. The obvious outlier is the impact of Omicron. However, you know, as I noted earlier, we have undertaken significant planning to help mitigate the disruption that we expect to occur in line with what we have seen in overseas markets. Our focus remains on product and sales growth, gross margin improvement, and leveraging our digital platform. We're very well positioned to respond to the changing environment and take advantage of the new market and product opportunities that we believe are ahead of us.
We have a strong pipeline of secured work in place, and we expect continued earnings momentum in the second half of the financial year. Given the uncertainty around Omicron, we're not providing guidance for the second half, and we do also note that there are eight less trading days in the second half of the financial year. Thank you for listening. I'll now hand back to the operator to manage any questions.
Certainly. If you would like to ask a question over the phone, please press star one on your telephone keypad. If you are 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 before posing your question. Again, press star one to ask a question, and we'll pause for just a moment here to allow everyone an opportunity to signal for questions with star one. We will now take our first question from Grant Lowe with Jarden. Sir, please go ahead. Your line may be muted.
Hello. Can you hear me okay, guys?
Are you-
Oh, hi, guys. Can you hear me okay?
Yeah. I can hear you. Thanks, Grant.
Okay, great. Thank you. Yeah, just a few for me. I sort of, you know, understand the need for the inventory investment. I appreciate, you know, what we're all facing, the next few months. I just wanted to sort of piece together how that sort of $39 million increase, how that's built up. I guess if you could talk a bit more to, you know, goods in transit. I see you've got a bridge there. Just wanna break that $39 million down into a few buckets being goods in transit, what you might describe as sort of increase in safety levels of stock to support, you know, current high demand and supply chain issues and the like.
The rest, I suppose, was just sort of background to support the general revenue growth.
Yeah. Look, I mean, it's probably worth just focusing in on that bridge a little bit on chart 14, Grant. I'll hand over to Richard, you know, to provide any more details. You can see there, we've noted on the chart that we've been able to keep our inventory turns pretty flat when you exclude goods in transit. Despite, you know, the huge increase in volumes going through our facilities, we've been able to sort of keep that inventory turn level flat. What we're seeing in terms of the increased dollar inventory, you can see sort of, you know, close to $ 30 million of that is actually just unit price increase. You know, that has obviously had a significant impact on the holdings.
Goods in transit, of course, is a very relevant factor and, you know, at the moment, you know, we're seeing goods in transit of anything between $40 million and $ 50 million on the water coming in at new prices. You can see the impact also on the bridge, Grant, of the sort of lengthening, I guess you'd call it, the supply chain, and that's both locally. Richard mentioned the time requirement, you know, stretching out from just for coil, for example, from the mill now up to about 16 weeks. We see, you know, far longer lead times in international shipping that we've been managing as well. Those factors really account for the balance of that inventory build.
You know, we're expecting this sort of environment to be maintained at least for this financial year. You know, there's a fair bit of, I guess, pressure in the supply system right through from, you know, mills through Asia that we're buying. You know, 60% of our products is bought offshore at the moment. And then even locally with the huge demand on the local mill. You know, that gives you a bit of an overview of that inventory number. I'm not sure if there's any more questions you had that I haven't covered.
Yeah.
Probably the only thing I'll just expand on there, Grant. The only thing I'll just expand on the chart is that we clearly had to when we identified the price increase in the separate items, we had to choose one that took all the price increase or whether we allocated the price increases across. The $ 28.5 million is the total price impact across all of those categories, and then the-
The 8.4, for example, is linked back to the prior prices.
I guess the key point here.
Go ahead, Grant.
Oh, sorry. There's a bit of a lag. Just so, I guess, I guess when you call out, you know, you've been able to hold inventory turns in line with prior periods, excluding goods in transit. I look at the slide before which shows inventory days, you know, up, you know, sort of 117 days up from, I guess, 101 at year end. Am I to infer that the extra 17 days effectively reflects goods in transit?
Yeah.
Obviously, you know, your inventory bill has gone up and your revenue has gone up as a result. Is that how I should think about that movement in those inventory days?
Spot on, Grant.
Yep. Okay. Excellent. In terms of, you called out a couple of things of planned CapEx in the second half, including, you know, just finding my slides here, that plate processing and roll forming equipment. Can you give us an idea of the sort of quantum of CapEx we're looking at in the second half?
We still expect to live within our overall sort of depreciation amortization envelope. You know, I think we're targeting around 8.5 full- year CapEx spend.
Got it.
It gives you an idea. That basically says another $ 6 million, Grant, in the second half.
Yes. Got it. Okay, and last one for me at this stage. Just in terms of year-to-date trading, obviously there's a strong forward order book, and nobody knows what's gonna be happening with Omicron in the next few months. Just in terms of where we are today, are you seeing any impact on trades of other trades impacting your ability to get in there and you know do your part on some of these projects? Is there any hold-ups on other parts of the broader supply chain?
Look, I mean, trading is tracking very well so far. I think January is up about 33% on prior period. We're continuing to roll through February and that's despite, you know, anecdotes of builders being a little bit late getting back from holidays. Generally trading is tracking very well. There are constraints as I noted earlier, Grant, in the supply chain. I mean, you know, just general congestion, ports, you know, the Chinese New Year holiday slows down demand a little bit up in Asia as well. You know, you tend to be getting a lot more freight coming through the system inbound at the moment.
You know, I know that freight forwarding companies and, you know, typically dealing with, you know, six to eight weeks sort of processing time to get product through wharves and into facilities. You know, facilities are chockers as well. It's a very, you know, capacity constrained environment in New Zealand at the moment. You move on to, you know, labor and Omicron, you know, as other challenges in terms of headwinds that I think anybody in the construction manufacturing environment is dealing with at the moment.
That's great. Thank you. That's all for me.
As a reminder, that is star one if you would like to ask a question over the phone. We will now take our next question from Scott Anderson with Forsyth Barr. Your line is open.
Hi, guys. Can you hear me?
Yes. Thanks, Scott.
Perfect. Thank you. Firstly, congratulations on a very good first half. Just a couple questions from me. My first one, just picking up on inventory. Would you be able to give us just a sense of what you think inventory and the channel across the broader market looks like? Do you kind of see that unwinding in a similar timeframe to you or potentially taking a bit longer?
I think most distributors in the market would be in similar. I can't speak for our competitors really, but I would've thought they would all be working through similar inventory positions. I note one of the other listed firms in our space had inventory increases a little bit higher than ours, in fact. You know, it gives me a bit of a yardstick that other players are in similar sort of situation. The key here is making sure you have availability for your customers and of that fast moving inventory.
I think we've been very effective at ensuring that we, you know, we meet, you know, three or four times a week, daily standups just on ensuring that we've got the right availability for, not only our top sort of 750 customers, but right through the system. That's what's critical in this environment and being able to manage your way through those channels to get that product to the customer when they need it. We've invested a lot in ensuring that we've got those shipping relationships working really well. So laneways locked in, physical laneways locked in up through Asia, Taiwan, China, these markets, to ensure that we can actually physically get the product. 'Cause that's the first challenge for anybody in this environment, is physically getting the product through the system.
We've also been able to lock in favorable freight rate positions as well, which has meant the damage to the P&L has been minimized. I'm you know very happy with the way our team have been able to manage the complexities in the environment and also the obvious high price environment.
Yeah. Okay. That's useful. Thank you. Secondly, just around gross margin-
Nice. Congratulations.
Obviously seeing pretty decent expansion. Where do you guys think a sustainable level for this is? Do you think you can eke out a few more percentage points, or where do you see it kind of ending up?
We're always striving, as I noted, a couple of places in the charts there, to continue to grow our gross margin, you know, dollars per ton. That's what our world revolves around really. That's through a lot of work on the analytics. That digital is not just about the customer facing activities. We spend a lot of time just demand elasticity, looking through where we can try and grow our mix and more profitable product areas. I noted a couple of investments that we're making, but we're also looking at different product streams that sort of adjacent to us that are attractive for us to grow into that enable us to continue to grow margins.
We, you know, we've done quite a lot to actually capture that increase in the structural space. It's not just sort of trading fluff, it's actual structural benefits that we've driven to help grow that margin. We're anticipating to be able to hold that sort of level for this, at least this financial year, Scott.
Okay, perfect. Thank you. Just following on from your comment there around new products. I mean, I know you said you wouldn't comment on what those are yet, but just even if you could give us a sense of if those are in similar sector targets to what you currently have or if it's like a completely new kind of segment that you're looking at or just any kind of color there?
Yeah, look, I can confirm it's not ice cream. We are, you know, I haven't had approval from the board yet on the final inventory investments that we wanna make in some organic growth areas. We've certainly had a directional, you know, okay from the board that we need to sort of finalize our investment plans around that. We see a couple of really attractive growth pathways that are adjacent to, you know, similar products to what we sell today, adjacent to those that are attractive for us as well as the investments that we've made.
We've really been very, you know, we've kind of as you go through our return on inventory investment and across all of our product categories, and the bulk of our investment is in the distribution business and inventory. You look at the inventory, the margin return on that inventory and really look through products that are being supplied to our customers from others that may not be in the current sort of steel distribution space, but our customers are buying and you sort of go, "Well, okay, where are those opportunities?" We've been through a very thorough process of that and identified a number of opportunities that we're working through at the moment for investment. Yeah.
Perfect. Thank you. That's all from me, guys, and congratulations again on the strong results.
Thanks, Scott.
It appears there are no further questions in the phone queue. I will now hand the call over to our speakers for web questions.
Thank you. We've got several questions that have come through online. First two are from Guy Manning. Congratulations, Mark, on a great start to the turnaround. Good to see the gross margin improving to 22.8%. What has been done to get closer to Vulcan's margin of 41.3%? The second question is, how is January and February tracking, and can you give some idea on full- year forecasts?
Okay. Thanks for those questions, Guy. On the first one, I think on the Chart 10 that we went through on the margin, we noted there that our gross margin includes freight, direct labor, and subcontract labor. It's a very large proportion of our spend, you know, that we put into that margin. I note on the other listed competitor, they have a different categorization where it's more like a product margin. I guess for us, if we normalized those items of freight and direct labor and subcontract labor, you'd be up in the sort of mid 30s to above sort of moving into those high 30s.
There's still a gap there, and I think that competitor has a very large proportion of their product mix that is processed products. Effectively they are in the downstream processing of those products that has a far higher yield or margin. You know, that it sort of bridges, if you like, that difference in margin from that competitor to ourselves. Now, our mix of processing is not in the, you know, sort of half our business like that competitor. It's more like in the low teens. As we grow our investment in some of the items that I mentioned earlier, like pre-processing and other downstream activities that we are investigating, you can see our margin profile changing.
I guess we, you know, we're rowing our own boat. We're quite a different mix of activities than that competitor. We have a very broad range of products that enables us to I guess wrap our value proposition around customers differently and offer a greater suite of products to our competitors. We have a, you know, an opportunity to really take advantage of that. Some of our digital proposition, we're seeing already that as customers move on to the digital platform, they're buying a far wider range of our products. The real benefit of the Steel & Tube value proposition starts to be realized through that digital proposition as well. You know, couple of points there, Guy, that help bridge that.
I guess on a comparative basis, as I said, sort of mid-high 30s product margins and the delta is the processing that we are not heavily involved in, but are investing in, discreetly. Your second question around how's January, February trading? I think I gave an indicator earlier to Grant that we're about 33% up year-on-year in January. February is trading just fine, you know, so far month to date.
The next question is from Graham Patchell. Did Steel & Tube organize Rapid Antigen Tests for staff last year? Are you using your own supply from forward thinking? I see this as a measure of efficient management as you are showing for the best of us you mentioned.
We have our own RATs coming in four different batches, if you like. We're basically due to receive another batch today. We're working through using those. As I mentioned earlier, we've qualified last week as part of the, you know, Critical Exemption Scheme. That means that we've been working through the government process around rapid antigen testing. Across our sites, many of our people have been dialing into that and using that effectively. You know, some congestion around parts of Auckland at the moment, but that process has generally been working quite well for us as well.
A combination of both, you know, the government supply through the exemption scheme and also, you know, through our own RATs that we have coming through the system. But we do a lot of planning around this. We have, you know, all of our critical workforce, particularly the teams in the stores, the teams that are operating machinery, some of our key machinery we've got, you know, backup people that we have trained over the past month around operating those critical machinery so that we've got, you know, two or three lines of redundancy built in if we need to. I'm not saying we're expecting this to pass through without any absenteeism. There will be absenteeism, but we are managing it very closely.
Certainly being part of the exemption scheme puts us in a very different position because you can figure out whether you're actually a, you know, positive case within 15 minutes rather than having to go through 10 days of isolation and multiple PCR tests. That's something that we're very pleased with, and I think a testament to Steel & Tube's broader base of diversity of our customer base means that we've been able to qualify. Yeah.
There are two questions from Blair Picot at ACC. The first question: Can we talk more about the performance of the infrastructure division in the first half, with EBIT being down on prior period and prospects for the second half?
Yeah. I mean, obviously different space in that we're typically, you know, we're manufacturing to tender and it's not made to stock business. We're manufacturing to tender and it's not made to stock business. Our roll forming businesses in the roofing and coil and purlin space, and then also our reinforcing and composite deck floor businesses. The profile of our revenues have been fairly solid in those businesses and, you know, we're expecting to see, you know, a good continued growth in those businesses over the second half. We've been happy with the performance, particularly in our coil and purlins, and our roofing business has been fairly strong. We're, you know, fairly happy with trading there as well.
Second question from Blair: Will the steel framing opportunity put you in competition with any of your customers?
No. It's a good question, but our customers are typically either in the you know steel frame, so they're buying coil from us, rolled strip coil that they're rolling themselves, and have specific channels that they are focused on in the market. You know, ours is more supporting a different you know type of customer, I guess, in a different channel. No, there's no conflict there.
There are no more online questions. Operator, are there any other phone questions?
Absolutely. We currently have no phone questions in the queue, so we will turn the call back over to our speakers for any closing or additional remarks.
No, thank you. That concludes our update. Thank you very much for listening and your interest in Steel & Tube.