SKL Skellerup Holdings

[winner (n)]

Been nothing from SKL since half year announcement so assume they still on track for a record profit in F23

Share price down 15% since half year and now about 30% down from its recent high.

Downtrend still intact ...wonder for how much longer as PE currently looking reasonable

Maybe as low as 4 bucks before full results announcement in August?

If I was them I'd find an excuse to come out and say things are still all hunky dory.

[Ricky Bobby]

If they beat last years, that would be amazing! I'm anticipating a soft result. The sp has been trending down for a while now and the margin squeeze is very real at the moment. Wait n see I guess

[Left Field]

Boring is good....... dividend/earnings/net profit ...all up 7%. Holders will be happy.

https://www.nzx.com/announcements/416484

Highlights for the year ending 30 June 2023
· Strategy continuing to deliver substantial growth in earnings and returns to shareholders.
· Revenue of $333.5 million, up 5% on the prior comparative period (pcp).
· Earnings before interest and tax (EBIT) of $71.7 million, up 7% on the pcp.
o Industrial Division's EBIT of $42.9 million, up 10% on the pcp.
o Agri Division's EBIT of $34.0 million, up 1% on the pcp.
· Net profit after tax (NPAT) of $50.9 million, up 7% on the pcp.
· Operating cash flow of $54.1 million, up 25% on the pcp.
· Net debt of $26.8 million, an increase of $1.6 million on the pcp.
· Final dividend of 14.0 cents per share (cps) (50% imputed) bringing the total FY23 dividend to 22.0 cps (50% imputed) for the full year, up 7% on the pcp.

"Our Industrial Division generates 85 per cent of its revenue from international markets. FY23 sales revenue growth of five per cent was slower than in recent years. Strong revenue growth was realised from sales of vacuum systems for wastewater applications (most notably in the USA), sales of high-performance marine foam products (into the USA, NZ and Australia) and roof-flashing products for solar energy installations (in the UK). This growth was partially offset by lower sales for potable water and appliance applications as customers reduced inventories; this reflected both lower demand and an easing of supply chain pressures such as raw material shortages and freight congestion prevalent during the COVID-19 pandemic of the preceding two years. The FY23 result again demonstrated that the broad range of applications we serve is a feature and strength of our Industrial Division. This enables us to leverage our expertise and not be exposed to changes in demand from any one sector."

Agri Division's EBIT was $34.0 million, up one per cent on the pcp. Revenue was $117.0 million, up six per cent on the pcp. Mair said increased sales of footwear were key to another record result in FY23.

"Our Agri Division remains a world leader in the design and manufacture of essential consumables for the global dairy industry and the design and manufacture of rubber footwear for farming and specialty applications including electricity, fire and forestry. Footwear was a standout during FY23 as increased sales in NZ (hardware channels and urban markets) and the USA (electricity applications) delivered earnings growth. Sales volumes of dairy consumables were down as customers reduced inventories due to lower demand and an easing of freight congestion prevalent during the COVID-19 pandemic. Sales price adjustments in the second half of the year lagged the impact of raw material cost increases incurred in the first half; however, productivity gains helped offset the impact of lower production volumes, higher raw material prices and freight costs."

[Soolaimon]

Happy long term holder. Order in for more at these prices.

[Soolaimon]

Got them. Thanks.

[Onemootpoint]

It came back down after that sharp stock price increase last week after earnings for those that feel they may have missed out on 'lower prices'.

[Left Field]

Good article by Jenny Ruth...."SKL one of the most consistent earnings growers on NZX 50"

https://justthebusinessjennyruth.substack.com/p/skellerup-one-of-the-strongest-and

"While sales grew at 7% a year through the first decade and net profit at 4.2% a year, earnings per share had fallen 2.4% a year.

In the second decade, sales grew at a slower 5.8% annual pace but profits rose 10.4% a year and per-share earnings grew at 10.2%."

Maybe one day the SP will recognise this performance.

[Basil]

More likely the market already does reflect those earnings and earnings growth history fairly.  PE of 18 seems about right in the circumstances.
Notable the NZX is down about 11% in the last 3 months but SKL has held up very well in a market where the tide is going out at a very fast rate of knots.
Quick back of the envelope valuation for me would be no growth PE of 7.5 for where the 10 year Govt stock rate is now + 1G where g = average growth rate.
What do you know, that gives a PE of just on 18.

[Waltzing]

Blue Chip... and MR P sold out... we did too ,,, big mistake after the lovely profit after the Great Recession....

still worth keeping the NZX open... just

[Mos]

Last purchase in 2023 for me was dipping my toe in the water with Skellerup today. Attracted to the high ROE, demonstrated growth history and prospects, international options, and the lucid commentary from the company on how they create value. Not cheap, but has the hallmarks of a long term high ROE compounder. Will look to add on weakness. 

[Left Field]

FB been buying SKL

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKL/424654/410820.pdf

[Left Field]

Did they also hold PEB.... i know a law firm that held PEB  a few years ago in a trust fund....
There is a private investor on this forum who has out performed the instos this year and i wonder if that investor would buy this....
its a long term hold one imagines ... 10 year?

Mmmmm excuse me but.....What's the relevance of PEB?  and who cares?

I also know an investor who has outperformed insto's and NZX and owns SKL. The same investor likes to balance his portfolio with predominantly 'safe' dividend investments with other more risky 'small cap' investments.

Seems it's all about perceived risks and perceived rewards, but then again I'm struggling to understand the point of your post.

[winner (n)]

Another consistent and solid result from Skellerup

Mair stepping down as CEO though but I'm sure he's taught his successor the tricks of the trade

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKL/426206/412572.pdf

[Left Field]

I would rate it as a minor downgrade...... SKL being cautious.

Divvy looks safe for the moment..... even a slight increase.  Great to see their Industrial Division doing so well. Increase in operating cash flow and reduction in debt bode well for better times.

• Revenue of $157.5 million, down 5% on prior comparative period (pcp)
• Earnings before interest and tax (EBIT) of $31.6 million, down 6% on pcp
o Industrial Division EBIT of $22.9 million, a record result up 7% on pcp
o Agri Division EBIT of $11.9 million, down 19% on pcp
o Corporate costs of $3.1 million, up $0.6 million on pcp
• Net profit after tax (NPAT) of $21.6 million, down 6% on pcp
• Operating cash flow of $36.5 million, a record result up 81% on pcp
• Net debt of $26.4 million, down $12.6 million on the prior half year
• Interim dividend of 8.5 cents per share (an increase of 0.5 cps), up 6% on pcp
• FY24 NPAT expected to be similar to the prior year record result.


I like SKL being cautious.

[Ricky Bobby]

Yep, minor downgrade. But look at other metrics like cashflow and debt and u can tell it's a bloody well run company that's all over it. Happy holder