Key Highlights

  • Reported EBITDA increased 19% to NZ$129.3 million, while reported EPS rose 20% to 14.4 New Zealand cents.
  • Adjusted EBITDA increased 16% to NZ$130.3 million and adjusted EPS rose 10.8% to 15.1 cents.
  • Operating cash flow declined 30% to NZ$73.0 million from NZ$105.0 million in FY25.
  • Vulcan declared a 4.5-cent final dividend, taking the FY26 total Dividend to 7.0 cents per share.

Vulcan Steel (ASX:VSL) reported improved Earnings for the financial year ended 30 June 2026, with higher sales volumes, market-share gains and the integration of its recently acquired rollforming Business contributing to an increase in profitability. Reported EBITDA rose 19% to NZ$129.3 million, while reported Earnings Per Share increased 20% to 14.4 New Zealand cents. However, Operating Cash Flow moved in the opposite direction, declining 30% to NZ$73.0 million from NZ$105.0 million in the previous financial year.

Earnings Growth and Operational Performance

Vulcan’s FY26 results mark a period of improved underlying operating performance following several years of weaker Volume trends. The company reported its first year-on-year increase in underlying volume since FY22, supported by higher sales volumes across Australia and New Zealand and initiatives aimed at improving market share.

Adjusted EBITDA increased 16% to NZ$130.3 million from NZ$112.1 million in FY25. Adjusted EPS rose 10.8% to 15.1 cents from 13.6 cents. The difference between reported and adjusted earnings reflects NZ$1.0 million of post-tax significant items associated with transactions relating to the Acquisition of Roofing Industries Limited.

The second half of FY26 was particularly important to the company’s performance. Vulcan reported improved underlying volumes during the period, while profitability stabilised and some product categories recorded improvement. The company maintained delivered-in-full, on-time Customer Service performance at 98%.

Rollforming Acquisition Adds to Processing Capability

The recently acquired rollforming business was a notable component of the FY26 operating performance. The business contributed nine months of trading during the financial year and delivered results ahead of expectations, according to management.

The acquisition expands Vulcan’s value-added processing capabilities and forms part of the company’s broader strategy to increase the proportion of its activities beyond basic product distribution.

Vulcan also continued expanding its hybrid site network during FY26. It opened a new greenfield Facility in Toowoomba, Queensland, and converted four existing operating locations into hybrid sites. The company said the changes are intended to support regional growth and provide a more consistent customer service proposition.

Cash Flow and Balance Sheet

Despite the improvement in earnings, operating cash flow declined significantly during FY26. Cash generated from operations fell 30% to NZ$73.0 million compared with NZ$105.0 million in FY25. The decline means the increase in EBITDA was not matched by an equivalent improvement in cash generation.

The Balance Sheet nevertheless recorded a modest reduction in net bank debt. Net bank Debt was NZ$227.3 million at 30 June 2026, down NZ$5.1 million from NZ$232.4 million at the end of FY25. Vulcan also reported that its financial covenants continued to improve over the 12-month period.

The company declared a final dividend of 4.5 New Zealand cents per share for FY26. The dividend is fully franked and fully imputed. Including the final payment, the total dividend declared for FY26 is 7.0 cents per share.

Market Conditions Across Australia and New Zealand

Vulcan continues to operate against mixed economic conditions in its two principal markets. In New Zealand, the company sees signs of stabilisation across the industry, with some leading indicators improving and expectations of increased activity over the next 12 months. The company has also noted that the November 2026 general election could influence the pace of the recovery.

Australia presents a different combination of factors. Interest rates remain restrictive, while the effects of Fiscal Policy remain uncertain. Industry conditions are mixed across individual sectors, although Vulcan expects its own operational improvements, market conditions and activity connected with the Brisbane 2032 Olympic build to contribute to volume growth over the coming years.

FY27 Priorities and Outlook

Vulcan’s focus for FY27 is to build on the momentum achieved during the second half of FY26. Management has identified customer service and Margin improvement as priorities as the company seeks to increase growth and participate in market and business-cycle opportunities.

Global trade policies and geopolitical uncertainty remain potential influences on economic activity across Australia and New Zealand. These external conditions could affect Demand and the broader operating environment for industrial distributors and processors.

The company intends to provide a further trading update at its annual meeting of shareholders in October 2026.

Conclusion

Vulcan Steel delivered improved earnings in FY26, with reported EBITDA increasing 19%, reported EPS rising 20% and adjusted EBITDA and EPS also recording year-on-year gains. The integration of the rollforming acquisition and the first annual increase in underlying volumes since FY22 were notable developments, while the company continued expanding its hybrid site network. However, operating cash flow fell 30% to NZ$73.0 million, highlighting a divergence between earnings growth and cash generation. With net debt modestly lower and profitability stabilising in the second half, Vulcan enters FY27 focused on customer service, margin improvement and volume growth while operating against mixed economic conditions and continuing geopolitical and trade uncertainty.