Latest news with #VulcanSteel
NZ Herald
5 days ago
- Business
- NZ Herald
The secret to being a good company director from Wayne Boyd, the man who's been on 167 boards
Speaking on the Money Talks podcast, we ask Boyd to explain what a company director does in a way a child (his grandchildren, perhaps) would understand. 'Well, you have to first persuade them that you're not the CEO of the company because that's their immediate default position,' he says. But his definition is very much to the point: 'Keeping an eye on managers, just as simple as that really.' Boyd grew up working-class in Wanganui. His father was a cooper (barrel maker) at the local freezing works. His mother worked at the hospital as a nurse's aide. It instilled a strong understanding of the value of money, which he carried with him as a director. 'I saw myself as a steward of other people's money. I made a decision to invest in the companies that I was chairing. And so I took that responsibility heavily. You want to get them an appropriate return for the investment they made.' Since stepping down from Vulcan Steel last November, Boyd, who was named a companion of the New Zealand Order of Merit in the King's Birthday Honours List, has been enjoying retirement. Boyd was never interested in management. His career started with a job as a lawyer in Hamilton for 16 years. A love of hockey led him to become the coach of the New Zealand women's team for the Olympics in 1984 and the World Cup in 1986. That experience inspired a career change to investment banking in Auckland in 1987 – not exactly the greatest timing. But he stuck with it and eventually his skills led to being offered board roles by the Government of the day. As an adviser first to the NZ Māori Council on the first major Treaty of Waitangi settlement, the 1992 'Sealord deal', he came to know Sir Tipene O'Regan and was a close adviser to Ngāi Tahu Holdings. Corporate roles followed. So what makes a good company director? 'You've got to have an open mind,' Boyd says. 'You don't learn the business by just reading the board papers.' You've got to get out and talk to the staff and ask them what keeps them awake, he says. 'You've got to have the ability to bring a diverse group of people at the board table together so that they're in a safe environment where they can actually say what they really do want to say about whatever the issue is of the day. 'I've always said you've got to have the courage to speak up.' Listen to the full episode to hear more from Wayne Boyd. Money Talks is a podcast run by the NZ Herald. It isn't about personal finance and isn't about economics – it's just well-known New Zealanders talking about money and sharing some stories about the impact it's had on their lives and how it has shaped them. The series is hosted by Liam Dann, business editor-at-large for the Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003. Money Talks is available on iHeartRadio, Spotify, Apple Podcasts, or wherever you get your podcasts.
Yahoo
02-06-2025
- Business
- Yahoo
How Good Is Vulcan Steel Limited (ASX:VSL), When It Comes To ROE?
Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). To keep the lesson grounded in practicality, we'll use ROE to better understand Vulcan Steel Limited (ASX:VSL). ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. Put another way, it reveals the company's success at turning shareholder investments into profits. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. ROE can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Vulcan Steel is: 14% = NZ$23m ÷ NZ$169m (Based on the trailing twelve months to December 2024). The 'return' is the profit over the last twelve months. One way to conceptualize this is that for each A$1 of shareholders' capital it has, the company made A$0.14 in profit. Check out our latest analysis for Vulcan Steel One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. If you look at the image below, you can see Vulcan Steel has a similar ROE to the average in the Metals and Mining industry classification (11%). That isn't amazing, but it is respectable. While at least the ROE is not lower than the industry, its still worth checking what role the company's debt plays as high debt levels relative to equity may also make the ROE appear high. If a company takes on too much debt, it is at higher risk of defaulting on interest payments. You can see the 3 risks we have identified for Vulcan Steel by visiting our risks dashboard for free on our platform here. Companies usually need to invest money to grow their profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. That will make the ROE look better than if no debt was used. Vulcan Steel clearly uses a high amount of debt to boost returns, as it has a debt to equity ratio of 1.48. While its ROE is respectable, it is worth keeping in mind that there is usually a limit as to how much debt a company can use. Debt increases risk and reduces options for the company in the future, so you generally want to see some good returns from using it. Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE. But when a business is high quality, the market often bids it up to a price that reflects this. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. So you might want to check this FREE visualization of analyst forecasts for the company. If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
