Lee Metal Group

[NTL]

Did some historical checks of the operation revenue profits for Lee Metal.

Their Steel Merchandising had been on the decline since 2007. Revenue and profit had been dropping, as well as the margin. For the latest FY, the profit from this division is a mere $3.7M, with a margin of just 1%.

Their Fabrication & Manufacturing had been doing well though. Revenue and profit generally on a up trend, except for 2010. However the gross margin is also compression from 11.5% to 8.3% from 2009 to 2012. Steel price went up and peaked around 2011 before falling, and this division experienced the lowest gross margin in 2011 at 6.3%.

Looking at their Competitor, the revenue and profit were also on a uptrend, except for 2010. Gross margin for the same period dropped from 10.9% to 9.6%. Surprisingly, the profit margin didn't drop in 2011.

Will continue to study the 2 companies and post my findings as and when I can.

Hi NTL,

Can you share where you derived the Lee Metals F&M gross margins from? It seems like you are comparing their operating profit margins with the BRC gross margins.

If I compute operating margins for BRC Asia, i get 5.3% for 2012 and 6.6% for 2011. (Using pbt add back finance costs and less share from JV)

You are right. Sorry, my error.