Ann: ADDRESS: SKL: Skellerup 2013 ASM

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					SKL
30/10/2013 16:27
ADDRESS

REL: 1627 HRS Skellerup Holdings Limited

ADDRESS: SKL: Skellerup 2013 ASM

Skellerup Holdings Limited held its Annual Shareholders Meeting today 30
October 2013 at 2.30pm at Eden Park, Auckland. A copy of the Chairman's
address is shown below and attached.  A copy of the CEO's presentation is
also attached.

Skellerup Holdings Limited
Annual Shareholders Meeting 30 October 2013
Chairman's Address

This time last year Skellerup had completed its best ever year - that was
very pleasing indeed. The performance was characterised by a solid effort by
the management, business units that were focused and positioned to deliver,
and importantly very favourable conditions.

Dial the clock forward to today and we have a slightly different picture -
trading conditions in both our international and local markets for much of
the 2013 financial year were not favourable.

It is during the tough periods that a company really shows its true metal. I
think that to report a net profit after tax of $19 million in the face of
very demanding operating conditions was a good effort.

Now that I have framed the year...what actually happened?
In general terms a prolonged drought in New Zealand and sluggish
international markets impacted both our trading divisions.

In the Agri Division we had drought conditions which saw clients' purchasing
decisions for liners, tubing and footwear put on hold. However, our Agri
business is a resilient one. This is because the liners and tubing that we
produce form an important part of ensuring food safety standards are being
met in the milking process. So in most cases purchasing decisions are simply
deferred and this is what we saw in the year under review. Lost sales were
pretty much fully recovered in May and June meaning that the Agri Division
performance was in line with the previous year.

The Industrial Division did not recover fully. A slowdown in North American
gas and oil exploration activity put a brake on pump sales. A similar trend
was seen in industrial rubber products as demand subsided in key markets -
Australia and Europe in particular.

David will provide more detail here but we are confident that our Industrial
businesses are well positioned to benefit from our enhanced presence in the
US, an improving US economy, on-going growth in global demand for food safety
and gas and our actions to broaden our product offering in targeted areas.
One pleasing aspect to come out of our experience over the past 12 months is
that the Skellerup share price has largely recovered to be close to the
levels it was this time last year. That to me indicates investors understand
what we are trying to achieve in this business and are confident that the
people charged with delivering on that performance will indeed succeed.
Moreover, whilst our NPAT might be off from a year ago, Skellerup still has
very strong operating cash flows - a key sign of a very healthy business. At
balance date, net debt was just $2.2 million; around half of what it was last
year. That gives us great flexibility not least for Project Viking which I
will get on to in a moment.

Another validating factor for this company is its dividend. The total
dividend pay-out for the year ended 30 June 2013 was 8.0cps. That is the same
as what we paid out last year and a measure of confidence that the board has
in the Company.
Now Christchurch. You will have noted in our Annual Report that we have
secured prime land in the Wigram Business Park.  Ngai Tahu has been and will
be an excellent partner for us.  In addition, Sir Ron Carter has agreed to
lead Project Viking and to oversee the establishment of the new facility at
Wigram Business Park. Sir Ron is one of the most respected figures in New
Zealand business and engineering having been a partner responsible for major
projects including the development of the Tasman Pulp and Paper Mill, the
Motonui gas-to-gasoline plant and the Mangere Wastewater Treatment Plant. His
vast experience is invaluable in ensuring that the quite specific
requirements for Project Viking are met at best quality and cost to
Skellerup.

Our Christchurch Agri operation provides us with a great example of smart
successful manufacturing. The skills and experience of our staff, which have
been built up over many years to produce and develop products that our
customers want provides that platform for our recommitment to Christchurch.
We are excited at having identified a new 3.4 ha site within Christchurch to
house what is now the second-largest design and manufacturing supplier of
rubberware to the international dairy industry.

As we have indicated previously, the $7.1 million land purchase and
construction of the new world-class Christchurch facility which is set to
commence early next year will be funded out of insurance proceeds, cash
reserves and unused banking lines.

In conclusion, without doubt the 2013 financial year did throw up some
challenges. But when you operate on a global stage this is always going to be
the case. The Company today is more robust and better positioned to withstand
any external shocks that will inevitably impact our business from time to
time.  Operationally, we believe we are on the right path to capitalise on
opportunities. Our outlook for the year ahead and beyond is positive. We are
seeing signs of improvement in the Industrial division and are focussed on
capitalising on our position and presence to grow this part of our business
in the months and years ahead.  Our Agri business continues to provide us
with steady underlying earnings in difficult times, and growth opportunities
particularly as global demand increases for safe and high-quality food. Good
progress is being made to relocate our Christchurch operations. With net debt
at historic lows and cash flow strong Skellerup remains in excellent health.
End CA:00243074 For:SKL    Type:ADDRESS    Time:2013-10-30 16:27:23