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Skellerup reports record profit again

Highlights for the year ending 30 June 2019
• Revenue of $245.8 million, up 2% on pcp.
• Record earnings before interest and tax (EBIT) of $41.8 million, up 5% on pcp.
o Industrial Division EBIT of $22.9 million, up 10% on pcp.
o Agri Division EBIT of $22.8 million, in line with pcp.
• Record net profit after tax (NPAT) of $29.1 million, up 7% on pcp.
• Final dividend increased from 7.0 cents per share (cps) to 7.5 cps (50% imputed) bringing the total dividend to 13.0 cps (50% imputed) for the full year, up 2.0 cps on pcp. Industrial Division revenue growth and margin improvement has delivered another record result for Skellerup in FY19.

Industrial Division EBIT lifted by 10 percent to $22.9 million, repeating a trend in earnings growth established over the past 5 years. CEO David Mair said the result was an outcome of concentrating resources and executing on the best opportunities.

“We are focused on providing innovative and cost-effective solutions for original equipment manufacturing customers. We have improved the speed at which we innovate. By being close to customers and using our capability and expertise in compound and tool design we are capitalising on our competitive advantage and we will continue to invest in people and capability to achieve further growth.”

Agri Division EBIT was flat at $22.8 million. Mair said this repeated the record result achieved in the prior year, noting operational gains offset the impact of softer markets.

“Our team achieved a very good result in a year where market conditions were more challenging particularly in North America and Australasia. By implementing operational improvements and continuing to deliver innovative and high performing products we were able to offset the market challenges. This dual focus is the key to ensuring we maintain our reputation for developing and manufacturing innovative and high-quality dairy consumables, animal hygiene products and rubber footwear.”

Chair Liz Coutts noted that the Board was pleased with the FY19 result.

“We are very pleased to report another record result, particularly in a year where the geo-political environment presented challenges and tariffs that directly impacted our bottom line.”

Coutts advised that a final dividend of 7.5 cents per share (imputed 50%) would be paid to shareholders on 17 October 2019. This payment will bring the total dividend pay-out for the financial year ended 30 June 2019 to 13.0 cents per share (also imputed 50%). This represents an increase of 2 cents per share or 18% over the prior year. Allowing for imputation differences (FY18 was imputed ~70%) provides shareholders with a minimum 10% net increase above the prior year.

“This dividend increase is consistent with our pattern of increases over the past 8 years during which time the pay-out has more than doubled. This demonstrates Skellerup’s consistently strong earnings and cash flow and the Board’s practice of increasing dividends as profit growth allows,” Coutts said.

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