Vulcan Steel has carried its FY26 recovery into the new year, reporting a 39% lift in first-quarter revenue and a 51% increase in EBITDA. The company also raised its FY26 dividend, while cautioning that Australia and New Zealand’s recovery remains gradual and uneven.
- First-quarter revenue rose 39% to $353.7 million
- EBITDA increased 51%, led by the Steel segment
- FY26 sales volumes rose 18% and adjusted NPAT increased 28%
- Total FY26 dividend lifted to 7.0 cents per share
- Board begins search for two independent directors
First-quarter momentum accelerates
Vulcan Steel Limited (ASX:VSL, NZX:VSL) has opened FY27 with a sharper improvement in trading than its cautious economic outlook might suggest. Group revenue reached $353.7 million in the first quarter, up 39% year-on-year, while EBITDA rose 51%.
Sales tonnes per day increased 27%, with the Steel segment leading the EBITDA improvement. New Zealand sales tonnes per day, excluding Roofing Industries, rose 16%, while Australia increased 13%. Roofing Industries contributed NZ$9.1 million of EBITDA in the quarter.
Three months remains a limited window, and Vulcan said monthly results can vary. Even so, management said the momentum built in the second half of FY26 had carried into the new financial year. The company reported net debt of $216 million at 30 September, compared with NZ$227 million at 30 June.
FY26 growth came with a lower capital return
The first-quarter figures build on Vulcan’s FY26 earnings results, which included 22% revenue growth and a $135 million contribution from Roofing Industries. For FY26, Vulcan reported revenue of $1.16 billion, adjusted EBITDA of $130 million and adjusted net profit after tax of $22 million. Sales volumes rose 18% to almost 253,000 tonnes, or 8% on a like-for-like basis.
Shareholders received a final dividend of 4.5 cents per share, taking the full-year payout to 7.0 cents, up from 6.0 cents. The total distribution was $10.3 million, equal to 47% of net profit after tax before significant items and within Vulcan’s stated 40% to 80% policy range.
Cash generation was less impressive than the earnings growth. Operating cash flow was $73 million, down on the prior year, which had benefited from a substantial working-capital release. Net debt nevertheless fell by $5 million to $227 million, while net debt to EBITDA improved to 2.9 times from 3.4 times.
Roofing integration expands the growth platform
Roofing Industries, acquired on 1 October 2025, contributed $135 million of revenue during its first nine months in the Group and performed ahead of Vulcan’s expectations, according to Gavin Street. The roll-forming business has also secured two major projects in Christchurch and Auckland that begin in FY27.
Vulcan now operates 82 logistics and processing sites across Australia and New Zealand. It opened a greenfield hybrid site near Toowoomba and implemented five hybrid sites across its network, while maintaining a 98% delivery-in-full, on-time order fulfilment rate for FY26.
Returns remain below management’s target
The important blemish in the numbers is return on capital employed. ROCE fell to 7.5% from 8.8%, partly because the capital invested in Roofing Industries contributed only nine months of earnings. Management said it was not satisfied with that result and retained a 20% to 30% ROCE range as a clear focus, although the company did not present that range as FY27 guidance.
Management described economic conditions as stabilising but said the recovery would remain uneven. New Zealand is beginning to recover, while Australia is expected to grow at a modest pace. Inflation, energy costs, household pressures and global uncertainty remain cited headwinds, leaving the strength and durability of the first-quarter acceleration as the central question for the next reporting period.
Board succession enters a planned transition
Vulcan also began the search for two independent non-executive directors to eventually replace Bart de Haan and Russell Chenu. Both directors are expected to remain through a transition period, with new appointments anticipated during 2027. The announcement adds a governance change to an otherwise upbeat operational update, but does not indicate an immediate disruption to board leadership.
The next hard checkpoint is Vulcan’s FY27 half-year result, due in mid-February 2027. By then, investors should have a better sense of whether the 51% EBITDA increase reflects a sustained improvement in volumes and margins, or simply a strong opening quarter against a weak comparison.
Bottom Line?
The early FY27 acceleration is encouraging, but the half-year result will need to show that stronger volumes are translating into durable returns on the capital invested in growth.
Questions in the middle?
- Can Vulcan sustain the first-quarter EBITDA growth as the Australian and New Zealand recoveries remain uneven?
- How quickly can Roofing Industries lift group returns beyond the current 7.5% ROCE?
- Will the planned appointment of two independent directors alter the Board’s approach to expansion and capital allocation?