Strong demand from the rural sector has helped Skellerup deliver a record half year profit.
The rubber goods manufacturer’s net profit for the six months to December rose by nearly two thirds to $19.5 million, with revenue up by 11 percent on last year to $136.6m.
The company makes hoses, nozzles and gumboots for the rural sector, and parts for boats, cars and kitchen appliances.
Chief executive David Mair said the company weathered challenges caused by Covid-19 and Brexit, which had ended up giving its profit a boost.
“We have seen some project timelines for new products extend but despite this, we have successfully moved into production with new products and customers in Australia, the USA and Europe.”
“Uncertainty over Brexit related disruption saw some customers increasing purchases in December 2020 providing an additional earnings boost for the first half of FY21,” Mair said.
Sales revenue in its agri division was up 18 percent because of increased demand for its dairy rubberwear, and the industrial division’s earnings rose by nearly half.
Corporate expenses had risen by $1.3m to $3m as the company set aside money to cover the costs of a legal claim made against a business it sold in 2008.
On the back of the strong result, the company lifted its full year profit guidance to between $33m and $37m from the previous forecast of between $30m to $35m.
Mair said the rest of the financial year would hold further challenges.
“We are experiencing extended shipping times and increased freight costs due to congestion and availability. We have also seen some increases in raw materials and will be impacted by the stronger NZ dollar.”
It increased its dividend to 6.5 cents a share.