Ann: HALFYR: SKL: Skellerup HY14 Results

• Release Date: 20/02/14 11:00
• Summary: HALFYR: SKL: Skellerup HY14 Results
• Price Sensitive: No
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					SKL
20/02/2014 09:00
HALFYR

REL: 0900 HRS Skellerup Holdings Limited

HALFYR: SKL: Skellerup HY14 Results

Skellerup increases dividend on back of earnings uplift

Key Points for the six months ended 31 December 2013
o Unaudited net profit after tax (NPAT) of $10.8 million, up 14% on the prior
corresponding period (pcp)  due to growth in profitability across the
business
o The Agri Division remains robust reflecting in particular the strong
domestic market
o The Industrial Division improved as the benefits emerge from changes made
in the cost base, product range and distribution capability over past 18
months
o Interim dividend up 17% to 3.5 cents on the back of earnings growth
o Debt remains very low reflecting strong operating cash flow
o Increase in full year NPAT forecast to a range of $22 to $24 million
Skellerup made a positive start to the 2013 financial year as it successfully
drove earnings growth across both operating divisions.

Chief executive officer David Mair said: "Our result for the six months to 31
December highlights the potential we have within the Group. Particularly
pleasing was the performance of the Industrial Division where we have made
changes to the business to improve our competitive position and distribution
to market. We have begun to realise earnings improvement here so that is
encouraging. Once more the Agri Division was well underpinned by the strength
of the NZ dairy sector where demand for our rubber liners and other Agri
related products continued to grow."

"As a company we consider we are relatively well positioned in markets that
we operate. We will continue, however, to look for efficiencies as well as
new opportunities to grow through being close to our customers and
understanding their needs."

NPAT of $10.8 million was up from $9.5 million a year earlier, continuing an
upward trend in earnings that began to emerge in the second half of the 2013
financial year. Group revenue was up modestly at $97.3 million from $95.0
million in the pcp. The numbers support Skellerup's focus on driving
operational efficiencies that flow positively to the bottom line rather than
simply focusing on sales, Mr Mair said.

Financial Summary

 Half year ended Half year ended Percentage
$000 Unaudited 31 December 2013 31 December 2012 Change
Revenue 97,278 94,992 2%
Earnings before interest and taxation 15,613 13,814 13%
Net profit after taxation 10,816 9,489 14%
Earnings per share 5.61 4.92 14%
Dividend per share 3.50 3.00 17%
Cash from operations 12,957 14,627 -11%
Net debt 3,412 4,538 -25%

Industrial Division
An across the board improvement in operations saw earnings before interest
and tax (EBIT) rise 18% to $9.2 million. This was on steady revenue of $59.6
million reflecting the restructuring within the business and the focus on
operating efficiencies. In the United States good growth was seen from
product and customer expansion for Gulf Rubber products. Sales of Masport
vacuum pumps also improved in line with a slight lift of activity in the oil
and gas sector. The relocation of Deks to a purpose built facility in Chicago
was successfully completed during the period, providing an additional
platform for growth going forward.  Our Australian businesses which include
Flexiflo chute lining systems, Deks plumbing and roofing products and Gulf
rubber products for industrial applications performed solidly especially
given the a challenging overall environment.  We are now beginning to see
signs of improvement in this market and are well placed to capitalise and
grow earnings. Our foam business delivered improved results with the
benefits of the transfer of manufacturing to Vietnam completed last year
providing a competitive base for growth.

Agri Division
EBIT rose 8% to $8.9 million on revenue of $37.6 million, up 6%. A feature
was the continuing strong NZ dairy sector and the resulting increase in farm
conversions which underpinned demand for rubber liners and tubing.  NZ
footwear sales were solid and improving international prospects for
specialist rubber footwear products (e.g. fire and forestry) were also
evident.  We have also begun to successfully integrate two small, recent
acquisitions to our animal hygiene business which enhances our product range
and distribution capability. Construction is still scheduled to begin this
year on a dedicated world-class dairy rubberware facility in Christchurch to
replace the historic Woolston site damaged by the February 2011 earthquake.
Tenders for the facility have been recently received and are currently being
evaluated.

Dividend
The Directors have declared an interim dividend of 3.5 cents per share, fully
imputed, which will be paid on 27 March 2014 to shareholders on the register
at 5pm on 14 March 2014.

Outlook
Chairman Sir Selwyn Cushing said: "Skellerup has made a very encouraging
start to the financial year. Accordingly, the Company has increased its
expected full year NPAT to be in the range of $22 to $24 million. A further
sign of the company's confidence going forward is the 17% increase in
dividend pay-out to 3.5cps. With net debt at $3.4 million and operating cash
flow strong Skellerup remains in very good financial health and fully able to
execute its strategies and deliver shareholder value."

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:00247240 For:SKL    Type:HALFYR     Time:2014-02-20 09:00:24