Steel &Tube Limited, Annual Meeting 2025

October 10^th 2025

Steel &Tube Limited (STU)

The company will hold its Annual Shareholders Meeting at 11.00am Wednesday 22 October 2025.

The location is Great Northern Room, Level 1, Ellerslie Event Centre, 80-100 Ascot Avenue, Ellerslie, Auckland.

You can also join the meeting online at this link.

Company Overview

The company was founded in 1953 through the merger of three steel merchandising companies. It listed on the NZX in 1967. The company supplies a wide range of steel products and solutions. It employs over 900 people at 35 sites across the country.

John Beveridge who has served on the Board since 2019 will retire at the ASM.

Current Strategy

Steel & Tube’s purpose is “to make life easier for our customers” supported by a set of values and a strategic roadmap.

Previous Year Shareholder Meeting

NZSA recorded the following key items at last year’s annual shareholder meeting:

1. STU experienced a very challenging FY24, with net profit falling by 85% to just $2.6m.
2. The annual dividend was cut from 8c to 6c net (with a final of just 2c per share).
3. STU is notably strong, financially, with net cash of $8.7m (about 5c per share).

The meeting report is available at this link.

Disclaimer

To the maximum extent permitted by law, New Zealand Shareholders Association Inc. (NZSA) will not be liable, whether in tort (including negligence) or otherwise, to you or any other person in relation to this document, including any error in it.

Forward looking statements are inherently fallible.

Information on www.nzshareholders.co.nz and in this document may contain forward-looking statements and projections. For any number of reasons, the future could be different – potentially materially different. For example, assumptions may be wrong, risks may crystallise, unexpected things may happen. We give no warranty or representation as to any future financial performance or any other future matter. We may not update our website and related materials for changes.

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Information included on www.nzshareholders.co.nz and in this document is for information purposes only. It is not an offer of financial products, or a proposal or invitation to make any such offer. It is not financial advice and does not take into account any person’s individual circumstances or objectives. Prior to making any investment decision, NZSA recommends that you seek professional advice from a licensed financial advice provider.

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Key

The following sections calculate an objective rating against criteria contained within NZSA policies.

Governance

NZSA assessment against its key policy criteria are summarised below.

Directors Fees:  Both the framework and disclosure of Director Fees are in line with NZSA policies. Directors can receive special exertion payments in certain circumstances, but none were paid in FY25. If these are paid, we would expect full disclosure of the amount paid and the reason for the payment.

Director Share Ownership:  Directors are encouraged but not compelled to own shares. This is NZSA policy. All Directors own shares.

CEO Remuneration:  The company discloses its remuneration policy on its website, which includes an overview of the remuneration philosophy applicable to the company. The People and Culture Committee are responsible for implementing the policy.

Incentives: The CEO is paid a short-term incentive (STI) in cash and a long-term incentive (LTI) by way of Performance Rights.

NZSA encourages fulsome disclosure in relation to any incentive payments made to the CEO, including disclosure of measures (or measure ‘groups’), weightings, targets, and the level of achievement versus target for each component associated with any awards. This methodology is supported by the new NZX Remuneration Reporting Template.

The STI is awarded at a target of 60% of base salary with a stretch of 90% of base salary. The measures, weightings, and level of achievement against each component are well-disclosed, with the overall STI award being made at 100% of target.

Performance rights are awarded under the LTI at a target of 40% of base salary. Vesting then occurs after a three-year performance assessment period. The measures are total shareholder returns (TSR) which is favoured by NZSA. The award for FY25 was 100% of target.

The company offers clear disclosure in relation to remuneration earned/awarded as compared with remuneration paid/vested.

NZSA prefers an incentive structure weighted towards LTI to ensure the CEO is not just focused on short-term performance and is aligned with the interests of long-term shareholders.

The company discloses the CEO/employee remuneration ratio but not the gender pay gap.

Golden Parachutes: In the interests of transparency, NZSA believes there should be explicit disclosure around the severance terms and notice periods associated with the CEO, including whether specific termination payments are offered.

We note and appreciate the statement in the Annual Report” Board policy is that no additional amounts are paid to a director or the Chief Executive Officer upon retirement or cessation of office. There were no special joining payments, retention payments or takeover bonuses paid to any executive in FY25.”

Director Independence:  All Directors are independent.

Board Composition:  We note there is a composite skills matrix in the Annual Report. NZSA prefers the skills matrix attributes skill sets to individual Directors to demonstrate how they contribute to the governance of the company.

The company participates in the IoD’s Future Director programme designed to develop and mentor the next generation of Directors. NZSA expect NZX50 companies to participate as part of a responsibility to develop and mentor the next generation of Directors.

The nature of the company’s board indicates a strong commitment to thought, experiential and social diversity, with relevant experience for Steel & Tube.

Director Tenure:  NZSA looks for evidence of ongoing succession or ‘staggered’ appointment dates that reduce the risks associated with effective knowledge transfer in the event of succession. We also prefer a term maximum of 9-12 years, unless there are exceptional circumstances that may apply.

The Chair and two Directors were appointed in 2017 with the other two Directors appointed in 2020 and 2021. Careful consideration will be required to ensure an orderly rotation whilst retaining institutional knowledge.

ASM Format: Steel &Tube Limited is holding a ‘hybrid’ meeting, (i.e., physical, and virtual), a format preferred by NZSA as a way of promoting shareholder engagement while maximising participation.

Independent Advice for the Board & Risk Management: NZSA looks for evidence, through disclosures, that a Board has access to appropriate internal and external expertise to support board assurance activities. We also look to see Boards are across their risk management responsibilities.

We note the Board has access to external independent professional advice. The Company Secretary (also the CFO) has unfettered access to the Board. The company outsources its internal audit process to BDO who report to and are monitored by the Audit and Risk Committee.

The Annual Report and Risk Management Policy provide good disclosure around financial, non-financial; business and operations risks and how these are governed. In October 2024, the company published a separate Climate Statement for FY24.

Audit

NZSA assessment against its key policy criteria are summarised below.

Audit Independence:  Good disclosure.

Audit Rotation:  The company ensures the Lead Audit Partner is rotated at 5 years as required by the NZX Listing Rules. KPMG was appointed in 2021, and the Lead Audit Partner’s next rotation is 2026. It is not disclosed if the Audit Firm is rotated at 10 years. While NZSA understands the constraints around rotation we would appreciate some disclosure around the process to tender the Audit to test the market.

Environmental Sustainability

In their 2025 Annual Report, Steel and Tube provide some commentary of their environmental performance and make reference to their climate-related disclosures. However, the full climate reporting is not available until the end of October (after the shareholders meeting).

NZSA encourages the company to align reporting dates in future reporting cycles.

Ethical and Social

NZSA assessment against its key policy criteria are summarised below.

Whistleblowing:  Good disclosure.

Political Donations:  There is no disclosure of any donations in the Annual Report however NZSA expects a disclosure around whether political donations are made.

Financial & Performance

Steel and Tube’s share price fell from $0.97 to $0.65 (as of 30^th September 2025) over the last 12 months – a 33% decline. This compares unfavourably with the NZX 50 which rose 6% in the same period. The capitalisation of STU is $119m placing it 77^th out of 115 companies on the NZX by size and makes it a mid-sized company.

¹ per share figures based off actual shares at balance date (not weighted average)

FY25 was arguably more difficult than FY24 for STU, as weak economic conditions persisted. Revenues fell another 19% to $385.8m. The gross profit margin contracted and fell substantially to 18%. Gross profit was down 33% to $70.1m and a negative NPAT was reported, coming in at -$24.4m.

Operating cash flows for 2025 were still positive, but much reduced coming in at $10.4m and this is whilst inventory levels continued to fall, down to $114m.

Although inventory levels fell, inventory turnover also fell slightly to 2.69. This could be seen as a concerning signal as regards cash flow stability. Inventory turnover measures how often a company has sold and replaced inventory annually. A higher ratio tends to lead to higher revenue, and vice versa. A falling ratio could be a sign of decrease in performance; however, it could also be a sign of a different product mix that has less selling frequency but potential high margins and or price.

NTA declined dramatically to $0.70 per share. Even with this dramatic fall, shares continue to trade at a 7% discount to NTA.

STU also took on $50m of debt, $20m which is current. Following on from this, the debt equity ratio is at 1.21 and the current ratio has fallen to 2.33. STU have $13m of cash and should meet its commitments comfortably.

STU did not declare a dividend in FY25.

During the year STU issued over 15 million extra shares, as partial consideration for the purchase of the Perry Metal Protection business which is expected to be immediately earnings accreditive.

STU expect economic headwinds to ease in 2026 and also expect infrastructure activity to increase.

The share register is widely held with the top 20 shareholders holding only 46.28% of shares between them with the largest shareholder being NZ Steel Ltd with 14.31%.

Resolutions

This is an administrative resolution.

We will vote undirected proxies IN FAVOUR of this resolution.

Andrew Flavell was appointed to the Board 1 October 2021. He has an extensive international experience in the information technology space. This includes leading large teams, driving digital transformations, delivering compelling consumer experiences, personalisation and loyalty, privacy and security, and AI and machine learning. In the roles he has held over the past 30 years, he has also contributed significantly to risk management and governance in the application of digital technologies.

We will vote undirected proxies IN FAVOUR of this resolution.

On 1 May 2025, the Company completed the acquisition of Perry Metal Protection and associated businesses. The Company issued 15,476,755 fully paid ordinary shares in the Company to the vendors’ parent company – Perry Metal Group Limited – at an issue price of $0.8432 per share, in partial consideration of the assets and businesses acquired. These new shares constituted 9.2% of the existing share capital of the company. The full details are set out in the Notice of Meeting.

We will vote undirected proxies IN FAVOUR of this resolution.

Proxies

You can vote online or appoint a proxy at https://www.investorvote.com.au/

Instructions are on the Proxy/voting paper sent to you.

Voting and proxy appointments close 11.00am Monday 20 October 2025.

Please note you can appoint the Association as your proxy. We will have a representative attending the meeting.

The Team at NZSA