Buoyancy in the dairy sector has underpinned a record
performance from Skellerup's agri division.
The company has reported after-tax net profit of $41.1
million for the year to June, up 116% from the previous year.
The result was impacted by a $20.4 million gain from
settlement of the Canterbury earthquakes insurance claim and
also a $1.6 million cost for settlement of a historical
product claim. Group revenue was up 4% on the previous year
to $196.6 million.
The company had benefited from a ''buoyant'' New Zealand
dairy sector leading to increased sales of liners and tubing
and an expanded footwear range, and from the acquisition of
two small businesses to augment the company's animal hygiene
product offering, chief executive David Mair said.
The agri division, which manufactures and distributes
products for the global dairy industry, reported a 10%
increase in earnings before interest and tax to $21.7 million
on revenue of $80.2 million, up 11% on the previous year.
The company was well placed to take advantage of an expected
regulatory change in Europe, which would drive growth as
larger, more efficient dairy units replaced smaller
operations, Mr Mair said.
In China, opportunities would grow as the country
strengthened food safety standards.
Those trends would help offset the impact of any drop in farm
returns in New Zealand, which, if sustained, would lower
demand for dairy shed consumables.
Construction was scheduled to start before Christmas on a $30
million dairy rubberware development and manufacturing
facility in Wigram, Christchurch.
Craigs Investment Partners broker Peter McIntyre said the
company was fundamentally in ''good shape''.
The balance sheet was strong, agri was still doing well but
industrial was ''lagging somewhat''.
Forsyth Barr broker Andrew Rooney said the industrial
division sales were flat and below Forsyth Barr's
expectations, while the agri division came in higher than
The industrial division reported ebit of $13.5 million on
revenue of $116.2 million, which was in line with the
previous year, Mr Mair said.
The United States market delivered steady growth across its
industrial rubber and vacuum pumps business.
The Australian market was ''tough'' for much of the year,
reflecting sluggish demand in construction and infrastructure
in particular, but that market appeared to be picking up.
Directors maintained the 5c-per-share dividend payout,
bringing the total dividend payout for the June year to 8.5c