Vulcan Steel (ASX:VSL) Enters 2026 With New CEO and Fresh Acquisition- Is Now the Time to Buy?

Vulcan Steel Enters 2026 With New Leadership

Vulcan Steel (ASX: VSL) has started 2026 with a big change at the top. New CEO Gavin Street officially took over on 1 January, replacing Rhys Jones, who led the company for 19 years. Jones now moves to the role of non-executive chairman. For investors watching the steel sector, this raises an important question: can fresh leadership and a recent acquisition set Vulcan up for a comeback after a difficult year?

Shares jumped 6.5% to A$7.33 on Monday, pushing the market cap to around A$1.07 billion. The stock sits near the middle of its 52-week range of A$5.23 to A$8.45 and has moved little over the past year, lagging behind the broader market. But there are signs that Vulcan may be building towards a turnaround.

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New CEO Brings Distribution Experience to Drive Growth

Gavin Street is not new to Vulcan. He joined as Chief Commercial Officer in October 2024 and brings more than 20 years of experience running industrial distribution businesses. Before Vulcan, he was CEO of Lawrence & Hanson Australia, a major electrical wholesaler.

This background matters because Vulcan’s success depends on efficiently moving steel and metal products across 66 sites in Australia and New Zealand. Street understands this type of business. His appointment also signals continuity rather than disruption, with outgoing CEO Jones staying on as Chair to support the transition.

The timing is notable. Vulcan Steel is coming off a challenging FY25 where revenue fell to NZ$993 million and net profit dropped 61% to NZ$15.7 million. The new CEO inherits a business that needs to stabilise and grow. His early priority will likely be integrating a major acquisition completed just months before he took charge.

Vulcan Expands Into Roofing With NZ$88 Million Deal

In September 2025, Vulcan Steel completed its purchase of Roofing Industries for NZ$88 million. The deal was priced at roughly 4 times EBITDA, which looks reasonable for a business generating over NZ$160 million in revenue and NZ$25 million in EBITDA.

This acquisition changes Vulcan’s business in an important way. Roofing Industries makes metal roofing and cladding products from 15 locations across New Zealand. By adding this to its existing network, Vulcan can now cross-sell roofing products to its steel customers and vice versa.

The deal is expected to add to earnings per share straight away. More importantly, it reduces Vulcan’s dependence on steel distribution alone, giving the company a new growth avenue as construction markets recover.

The Investor’s Takeaway for Vulcan Steel

At current prices, Vulcan Steel trades at roughly 60 times trailing earnings, reflecting the tough FY25 result, with a trailing dividend yield under 1%. This valuation reflects the tough conditions the company has faced but also leaves room for upside if things improve.

The positives are real. Gross margin improved to 34.2% in FY25, and the company generated NZ$105 million in operating cash flow despite lower sales. Management also cut net debt by NZ$44 million, showing discipline.

The key risk is the balance sheet. Debt-to-equity sits at 148%, which is high. If construction markets weaken further, this leverage could become a problem.

Our view: Vulcan Steel looks like a cyclical recovery story for patient investors. The high trailing PE reflects depressed earnings rather than an expensive stock – if profits recover to historical levels, the valuation would look more reasonable. The new acquisition adds growth potential, and leadership appears stable.

However, the debt load and uncertain recovery timeline suggest caution. Waiting for clearer signs of improving sales before buying aggressively seems sensible. Current holders may prefer to hold and let the new CEO execute his strategy.