A stronger second half boosted Skellerup Holdings' June full-year operating profit from continuing operations to $21.7 million, up nearly 14% on the previous corresponding period.
The profit after tax was up nearly 33% to $11.96 million from $8.9 million in the previous period.
A fully imputed dividend of 2.5c would be paid.
Group revenue for the second half of the year to June was up 16%, negating disappointing first-half revenue figures.
The full-year revenue was in line with the previous year at $180.7 million, Skellerup acting chief executive David Mair said yesterday.
Skellerup shares rose 7c on the news to a year high of 80c yesterday.
However, what impressed Craigs Investment Partners broker Chris Timms most was the reduction in debt by Skellerup.
Group debt fell during the year from $64.7 million to $26.6 million - a reduction of $38.1 million, of which $20.7 million was provided through a successful two-for-five rights issue. The balance of the reduction came from earnings, together with efficient management of working capital, Mr Timms said.
"I like it when a company can reduce debt like that.
The debt reduction was way below our forecast and brings their gearing ratio down from 48% to 21%."
Mr Timms described the Skellerup profit announcement as a "solid performance", that provided a sharp reduction in debt and an increase in profit guidance, despite a cautious outlook about trading conditions next year.
Mr Mair said a marked shift in trading conditions was felt in the third quarter and subsequently gained further momentum in the fourth quarter.
Improved sales, together with a focus on operational efficiencies across the group, produced the improvement in net profit for the full year.
Features of the strong second half by the industrial division included increasing demand for the core range of pipe rings, gaskets and appliance industry requirements, and growth in the supply of drive shaft couplings to the automotive industry, he said.
Despite the improving second half, Skellerup was wary about the outlook for its overseas markets in light of recent economic data.
The data from the United States, Europe, and to a lesser extent, Australia, could mean growth in those markets for the company's industrial products might be more gradual and patchy than initially expected, Mr Mair said.
With the northern hemisphere summer vacation period coming to an end, the next few months might provide a better guide.
The company expected net profit for the current year to be between $16 million and $17 million, with the outlook for the industrial division generally continuing to be positive.
