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Skellerup Holdings

By Dan Stratful

Wednesday 4th April 2012

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Skellerup Holdings (NZX: SKL ) is one of only a few shares on the New Zealand market that provides investors with access to the Agriculture sector and it is well known for its ‘Red Band’ gumboots.  Recent cost management and debt reduction initiatives have seen SKL go from strength to strength. 

SKL was founded over 100 years ago and it develops, markets, manufactures and distributes products to the Industrial and Agriculture sectors through its two divisions - Agri and Industrial.

Both the Agri and Industrial divisions performed well in the first half ending 31 December 2011 as Industrial EBIT increased 12% and Agri EBIT was up 11%, while group net profit came in at a record $11.5 million, despite deteriorating market conditions in some markets particularly Europe and Australia.

Excellent growth was seen from the sale of vacuum pumps into the US oil and gas markets and there was also growth in international and local markets for SKL’s dairy liners and filters.

Looking to the current year ending 30 June 2012 (FY12) and SKL is reviewing strategic options to accelerate growth and profitability, and will continue to pursue the development and introduction of new products, while not only growing business from existing customers, but also accessing new markets and customers.

SKL expects a record FY12 net profit of between $22 million and $23 million, and it will pay dividends in line with its dividend policy which remains at 40% to 60% of net profit.

Status: GROWTH BUY

SKL’s shares today traded at $1.40

For portfolio, sharemarket and fixed income enquires contact:
Dan Stratful at Investment Research Group (IRG)
Authorised Financial Adviser (AFA)
0800 437 8489, 09 304 0232, dan.stratful@irg.co.nz
**A disclosure statement is available, on request and free of charge.


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