Skellerup eyes record net profit in 2021 after strong start

Skellerup expects a record 2021 after a strong start to the year. Photo / NZ Herald

Shares in manufacturer Skellerup rallied sharply after it said it expects to report a record profit of around $30 to $35 million in the June 30, 2021, financial year.

By late afternoon, the stock was up 20c or 6.7 per cent at $3.17.

Chair Liz Coutts said in notes prepared for today's annual meeting that Skellerup's businesses had started the year well.

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"While we have uncertain global conditions ahead, we expect 2021 net profit to be in the range of $30 to $35 million, ahead of the 2020 result of $29.1 million," she said.

"Our strategy of working closely with customers to provide engineered products that assure performance and often meet demanding food or water regulations continues to generate sustainable earnings growth," she said.

Last year's $29.1m net profit was level with the previous year's, despite Covid-19 disruption.

Skellerup's revenue in the 2020 year rose 2 per cent to $251.4m while Ebit came to $42.4m - also up 2 per cent.

Operating earnings from Skellerup's agri division in that year rose 11 per cent to $25.4m while earnings from the industrial division fell 9 per cent to $20.9m.

The company, which makes Skellerup gumboots, declared a final dividend of 7.5cps, bringing the total dividend to 13.0 for the year, which was in line with the previous year's.

Skellerup, said at its last result that its performance reflected the resilience and robustness of the business and highlighted the benefit of providing essential products, particularly in the agri division, to international markets.