Skellerup (SKL-NZX) CEO Review & Outlook - October 2020

Auckland Property & NZX Stock Market Tips with MaximSherstobitov.NZ

Skellerup is a New Zealand-based manufacturer of industrial and agricultural rubber products. now employs over 800 people in NZ, Australia, the UK, US and China.

Highlights for the year ending 30 June 2020

· Resilience and skill of our people to sustain business operations in a challenging environment.
· Revenue of $251.4 million, up 2% on pcp.
· Earnings before interest and tax (EBIT) of $42.5 million, up 2% on pcp.
· Agri Division EBIT of $25.4 million, up 11% on pcp.
· Industrial Division EBIT of $20.9 million, down 9% on pcp.
· Net profit after tax (NPAT) of $29.1 million, in line with pcp.
· Operating cash flow of $48.0 million up 66% on pcp.
· Final dividend of 7.5 cps (50% imputed) bringing the total dividend to 13.0 cps (50% imputed) for the full year, in line with pcp.
Skellerup financial results overall are in line with the prior corresponding period (pcp) record result despite the impact of Covid-19 restrictions on both the supply chain and markets globally.

The performance reflects the resilience and robustness of the business and highlights the benefit of providing essential products, particularly in the Agri Division, to international markets.
Agri Division EBIT was a record $25.4 million. CEO David Mair said the result underscored the importance of the essential dairy consumables products that Skellerup design, manufacture and sell globally.
“The strength and resilience of our Agri business is seen in the record result. We increased sales of essential rubber ware products into the USA, achieved operational gains despite the impact of COVID-19 restrictions at our key Wigram facility and had a strong contribution from Silclear, our silicone rubber products business acquired on 01 November 2020.”
Industrial Division EBIT was $20.9 million, down 10% on the record result achieved in the pcp. Mair said results varied across the Division reflecting the diversity of customers and applications served.

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