Vulcan Steel posted a robust FY26 with revenue up 22% and NPAT rising 31%, driven by the integration of Roofing Industries and volume growth despite economic headwinds.
- FY26 revenue increased 22% to NZ$1.16bn
- NPAT attributable to shareholders rose 31% to NZ$20.7m
- Rollforming acquisition contributed NZ$135m revenue and NZ$9.3m NPAT
- Operating cash flow declined 30% due to working capital build
- Dividend raised 17% to 7.0 NZ cents per share, fully franked
Rollforming Acquisition Drives Earnings Surge
Vulcan Steel Limited (ASX:VSL, NZX:VSL) closed FY26 with a notable 31% jump in net profit after tax attributable to shareholders, reaching NZ$20.7 million. The standout catalyst was the acquisition of Roofing Industries Limited, completed in September 2025, which added NZ$135 million in revenue and NZ$9.3 million in NPAT for the nine-month period under Vulcan ownership. This rollforming business has not only expanded Vulcan’s product portfolio into value-added processing but also exceeded initial earnings expectations, underpinning the company’s strategic push beyond traditional steel distribution.
Revenue for the year climbed 22% to NZ$1.16 billion, reflecting both the acquisition and organic growth. Sales volume increased 18% to 252,820 tonnes, marking the first year-on-year volume growth since FY22. This was driven by improved market activity in the second half of FY26 and internal initiatives, particularly in New Zealand’s agricultural sectors and Australian engineering steel markets.
Operational and Financial Performance Amid Economic Challenges
Despite ongoing economic headwinds, including elevated interest rates, subdued business confidence, and geopolitical uncertainties, Vulcan maintained a strong customer service record with a 98% delivery in full, on time (DIFOT) rate for the third consecutive year. The company also expanded its hybrid site network, opening a new greenfield site in Toowoomba and converting four existing sites to hybrid operations to enhance customer responsiveness.
Adjusted EBITDA rose 16% to NZ$130.3 million, supported by higher volumes and improved gross profit per tonne in the Steel segment, which saw a 78% EBITDA increase to NZ$78.5 million. The Metals segment experienced a slight EBITDA decline, reflecting margin pressures in some categories, but showed improvement in the second half of the year.
Operating cash flow fell 30% to NZ$73 million, primarily due to a working capital build of NZ$11 million to support growth and the acquisition integration, compared to a working capital release in FY25. Net bank debt marginally decreased to NZ$227 million, with net debt to EBITDA cover improving from 3.4x to 2.9x, reflecting disciplined financial management and covenant compliance.
Sustainability and Leadership Transition
Vulcan’s sustainability initiatives progressed alongside growth, with greenhouse gas emissions increasing slightly to 13,395 tonnes CO2e due to the expanded business footprint. However, emissions intensity improved 8% year-on-year, aided by investments in solar power installations at key sites and a shift towards lower-carbon steel sourcing. The company’s hybrid vehicle fleet now comprises 70% electric or hybrid vehicles, balancing environmental goals with operational practicality.
The year also saw a smooth leadership transition with Gavin Street stepping in as Managing Director and CEO on 1 January 2026, succeeding Rhys Jones who became non-executive Chair. Street emphasized continuity in Vulcan’s customer-centric culture and operational discipline as the foundation for future growth.
Dividend and Outlook
The Board declared a final dividend of 4.5 NZ cents per share, bringing total FY26 dividends to 7.0 NZ cents per share, a 17% increase over FY25, fully franked and fully imputed. This payout aligns with Vulcan’s policy targeting 40-80% of adjusted NPAT distribution.
Looking ahead, Vulcan expects economic conditions to remain mixed but cautiously optimistic signs of recovery are emerging, particularly in New Zealand. The company plans to leverage its expanded product platforms, including rollforming, and its hybrid site network to accelerate growth. The Brisbane 2032 Olympic infrastructure build is anticipated to provide additional demand support in Australia. Vulcan will provide a trading update at its October 2026 Annual Meeting.
Bottom Line?
Vulcan’s FY26 results underscore the strategic value of its rollforming acquisition and operational resilience, but cautious investors should watch how integration progresses and economic uncertainties unfold in FY27.
Questions in the middle?
- How will Vulcan balance growth ambitions with the ongoing challenges of integrating Roofing Industries?
- Can Vulcan sustain margin improvements in its Metals segment amid competitive and inflationary pressures?
- What impact will New Zealand’s upcoming general election and Australia’s restrictive interest rates have on Vulcan’s market demand?