Skellerup has reported steady earnings and net profit in the first half of the 2023 financial year, although earnings by the agricultural division fell 12% compared with the previous corresponding period.
Revenue was up 10% to $165.5 million and earnings before interest and tax (Ebit) were up 3% to $33.5m.
However, because of rising costs and mixed seasonal demands, net profit was down 1% to $23m.
There was a swing in earnings from the agri division to the industrial division, where Ebit rose 14% to $21.4m.
Net debt was $39m, up $13.8m on the position at FY22 year-end, but chief executive David Mair said the increase in working capital resulted in net debt remaining low at 19% of net assets.
“Dairy sales were as we expected softer and in line with our budget following a very strong finish to the prior year,” he said.
“This lower demand naturally impacted production and some erosion of gross profit in the first half of the year.
“Footwear sales into the home and the United States markets remained strong, exceeding both our target and the previous corresponding period.”
The directors have maintained the guidance for the full year of net profit after tax between $48m and $52m and they lifted the interim dividend by half a cent to 8c per share, 50% imputed, payable on March 16.
“Markets will remain challenging; however, we expect earnings to be stronger in the second half of the year due to seasonal impacts and contribution from new products used in hygiene, potable water and flow control applications.
“These new products add to our strong foundation to deliver growth in the years ahead,” Mair said.
The Skellerup share price dropped 10c to $5.35 after publication of the interim result. It has been steady in the range $5 to $5.0 throughout the past year.
