Gumboot-maker strides back after profit drop

Donald Stewart (left) and chairman Keith Smith see continued overseas growth for Skellerup. Picture / Brett Phibbs

Acquisitions and overseas growth saw the full-year results of rubber products maker Skellerup bounce back from a half-year drop in profit.

Net profit for the year ending June was $13.4 million, up from $12.5 million, and revenue was $159.4 million, compared with $118.5 million the previous year.

Overseas revenue was $91.8 million - equivalent to 58 per cent of total revenue compared with 50 last year.

Skellerup made a number of acquisitions in New Zealand and abroad including its largest yet - Gulf Rubber.

Managing director Donald Stewart said the strategy of increasing overseas exposure was paying off.

"We believe we will continue to grow offshore at a faster rate probably than we will onshore. We have initiatives under way to utilise these networks to source raw materials and utilise cost-effective manufacturing facilities, increasing our ability to offer customers the quality and reliability our brands are known for at internationally competitive prices."

Stewart said Europe had not delivered the level of business hoped for and the firm would refocus on attacking that market.

No forecast was provided for the coming year although profit was expected to be upwards of $13.4 million.

This growth would be achieved despite a negative impact of $4 million in 2007 as five years of hedging ran out. In the coming year, export revenues were expected to be transacted at US60c.

"We're still transacting at 50 [cents] but that's running out in the next month or two," Stewart said.

The company - famous for making gumboots - would also look at strengthening its competitive position with more acquisitions.

Relatively buoyant global growth would be driven partly by increased demand for commodities, especially in nations including China where Skellerup now had a fully operational manufacturing facility.

However, the outlook for New Zealand was for reduced retail spending and a slowing of the general economy.

Skellerup shares closed up 6c at $1.41 yesterday.