Skellerup buoyant on back of growth, higher revenue
SKELLERUP is confident its supply chain flexibility gives it the ability to adapt and mitigate the impacts of more restrictive international trade practices, chief executive David Mair says.
Releasing the group’s financial results for the year ended June, Mr Mair said international markets provided the best opportunities for growth for the agri division.
‘‘We are very pleased with progress in the 2018 financial year. Our reputation and ability to consistently develop and deliver innovative and highquality dairy consumables and animal hygiene products is critical to our success.’’
The company reported earnings before interest and tax (ebit) of $39.8 million in the period, up 21% on the $31.4 million reported in the previous corresponding period.
The reported profit was $22.3 million, up 24% on the $22.1 million in the pcp.
Earnings per share rose to 14c from 11.47c.
The final dividend was 7c per share, taking the total dividend to 11cps.
Craigs Investment Partners broker Chris Timms said a standout was the 14% increase in revenue to $240.4 million.
Growth was across the board but with particular strength coming from the industrial and agri business divisions.
The balance sheet showed the company had cut its debt and its debtequity ratio was below 10%, allowing the company to continue to pay dividends.
However, only 55% of the
dividend was taxpaid because of the growing strength of Skellerup’s international business. The growing international business prevented the company from gaining tax credits in New Zealand, he said.
Skellerup, like other companies, was making sure it reduced its debt to much lower levels than in the past to ensure it could continue rewarding shareholders with dividends.
Any acquisitions were bought only if the did not push out the debtequity ratios.
‘‘Everyone is being more considered in their activities.’’
The Skellerup balance sheet showed the industrial division lifted its ebit by 21% to $20.8 million in the period, accelerating a trend in earnings growth established during the past four years.
Mr Mair said the result was the outcome of focusing activity on the best opportunities and delivering innovation and costeffective solutions.
The agri division lifted ebit by 15% to $22.8 million, a record for the division.
The result was due to growth in international markets and a buoyant New Zealand market with the improved payout rates available to farm.
This year also marked the 60th anniversary of Red Band, he said.
‘‘Leveraging this longestablished technical knowhow, we have continued to develop and grow our footwear range, including our firefighting boots which are not only worn in New Zealand and Australia but now also by a large proportion of the United Kingdom fire brigades.’’
Skellerup shares last traded at $2.09.