Gumboot-maker Skellmax earnings up

Gumboot-maker Skellmax has kicked its earnings up a notch, and its new manufacturing plant in China bodes well for the growth to continue.

Yesterday, the company's full-year profit came in as forecast at $12.5 million, up $0.9 million on last year's figure.

Chairman Keith Smith expected net profit to keep growing this year as earnings from the four companies it bought this month for $20 million came on stream, and with more acquisitions likely.

"We're looking for like-minded businesses that can add value to the company, and where possible to leverage business in China," he said.

Skellmax specialises in making rubber products and vacuum pumps for rural and industrial use, including Red Band gumboots, and consumable items such as teat-cup liners.

Within the year to June, it added Melbourne-based rubber manufacturer Deks and Bisleys Environmental Systems to its stable, the first of which had helped boost export sales to 50 per cent of revenue.

Sales had picked up in the US and Europe as its dairy rubberware products gained market share.

Closer to home, Australasian sales were not as buoyant due to the drought and the restructuring of several New Zealand rural resellers during the year.

The company bought a rubber factory in Woolston, China, two years ago to lower its cost structure. The gumboot plant there was now in full swing and the vacuum plant was expected to be in full production by the end of October.

"We have continued to invest in our manufacturing facility in China to enable us to remain competitive in the manufacturing of an increasing range of products, and we are also using our presence in China to build our ability to market and source products, facilitating trade in both directions," said Smith.

He did not expect the market to be significantly different in the year ahead.

Brand strength would help the company withstand pressures of a shrinking customer base that occurred as the local rural sector underwent rationalisation.

Infrastructure projects and commercial construction were expected to assist sales in the industrial division.

There were opportunities to grow the business through technical rubber products, including footwear, and vacuum pumps into global niches, and non-technical rubber products into Australasia.

The 4c dividend takes the payout for the year to 7c, or 60 per cent of net profit.