Strong performance by Industrial Division underpins Skellerup''s result
Highlights for the year ending 30 June 2016
o NPAT of $20.5 million in line with guidance.
o Operating cash flow strong at $30.9 million.
o Dividend maintained at 9 cents per share for the full year.
o Construction of new dairy rubberware facility at Christchurch complete.
Transfer of operations proceeding well.
A strong performance by Skellerup Industrial Division has contributed to
after-tax profit of $20.5 million, in line with guidance provided earlier
this year.
CEO David Mair said Skellerup''s diverse range of products and markets had
helped shield the company from the effect continued low commodity prices were
having on its customers in the dairy, oil and gas, and mining industries.
"Using the expertise we have built up in one market to develop new
opportunities elsewhere has been a big driver of the growth in earnings
posted by our industrial division," said Mr Mair.
"For example, in Australia, Deks has been able to build on its reputation and
its relationships with distributors to move beyond plumbing and roofing
products into water and wastewater infrastructure supplies."
Earnings for Skellerup''s Agri Division were as expected, particularly given
the prolonged drop in the international milk price, but the dairy industry in
New Zealand and abroad remained an important customer.
"Demand for our milking liners held up well as these are an essential
consumable; however demand for tubing and other products was down as farmers
are more able to defer expenditure on these items," said Mr Mair.
"The important role our products play in helping farmers meet milk quality
and animal health requirements will ensure this business remains a core part
of our company into the future."
Mr Mair said Skellerup''s development of its new flagship dairy rubberware
development, manufacturing and distribution facility at Wigram demonstrated
Skellerup''s continued commitment to innovation and to growth.
Mair noted that management remained focussed on optimising performance across
the Group.
"A focus on good disciplines is important when markets get a little tougher.
We improved operating cash flow to $30.9 million in FY16. We expect to
continue to generate strong cash flow which provides an excellent dividend
stream for shareholders and the ability to invest in our business."
Dividend
Skellerup''s Directors have maintained the final dividend at 5.5 cents per
share, fully imputed. This will be paid on Thursday 13 October 2016 and
brings the total dividend pay-out for the financial year ended 30 June 2016
to 9.0 cents per share. This decision reflects the company''s strong cash flow
and confidence in its ability to deliver earnings growth.
Concluding comments
Skellerup Chairman Sir Selwyn Cushing said: "We expect continued improvement
in earnings from our Industrial Division. We have established a stronger and
more cost-competitive platform, our investment in innovative new products is
delivering revenue growth, and we have a solid pipeline of new business
ahead.
Sir Selwyn is also delighted with the new Wigram facility. "Completing the
move to Wigram after 77 years at Woolston will be a significant moment in the
history of Skellerup. Our focus continues to be on concluding this project
safely and efficiently, with no disruption to customer supply or product
quality.
"The international markets in which Skellerup operate continue to provide
challenges but also opportunities. The Board is confident that we will
deliver an improvement in earnings in FY17."
For further information please contact:
David Mair
Chief Executive Officer
021 708 021
Graham Leaming
Chief Financial Officer
021 271 9206
For media queries please contact:
Geoff Senescall
Senescall Akers Limited
021 481 234
End CA:00287383 For:SKL Type:FLLYR Time:2016-08-18 08:30:01