Acquisitions put Skellmax on target

Agriculture equipment manufacturer Skellmax Industries says it is on target to reach its full-year earnings forecast after new acquisitions boosted its first-half profits.
Managing director Donald Stewart said new acquisitions had driven the rise in operating revenue.

Its flagship acquisition to date - Australian company Deks Industries - was trading above expectation after just one year, said Stewart.

Revenue from its overseas businesses increased from 44 per cent to 49 per cent of its revenue.

Stewart said the result was a strong start to the year, and the company was heading towards its full-year profit target in the vicinity of $12.5 million. Last year's profit was $11.6 million. 

Sales of $25.8 million in its agricultural division made up 43 per cent of group revenue, but early summer weather had affected farmer spending, said Stewart.

International sales for rubberware and dairy vacuums had been more buoyant.

New customers for vacuum pumps and dairy rubberware were found in Korea and Asia and were due to come on stream in the next half of the year.

Stewart said the company was looking for acquisitions within its agricultural and industrial divisions.

Benefits from the recent relocation of the major part of its Flomax vacuum pump factory from Auckland to China would be captured in the 2005-2006 result.

Skellmax still has two local manufacturing plants, and Stewart said that although the challenges were increasing, it was still sustainable to manufacture locally.

"New Zealand's a good place to manufacture with good quality people and our technical expertise is here," he said.

"The competitive environment gets tougher every year so we feel the pressure of that ... but its not at a stage where it's capitulated ... "