Skellmax stakeholders unhappy

By GEORGINA BOND

Shareholders have caned manufacturing company Skellmax for its low full-year profit results, but the company has promised a turnaround next year.

Shares fell 4.5 per cent to close at $1.29 yesterday after Skellmax posted a 8.1 per cent drop in its full-year net profit to $11.6 million.

Managing director Donald Stewart blamed the lower result on the dollar and higher depreciation after a busy year of acquisitions.

He said the company had built up a solid platform for growth and was confident it would deliver "above market average" profits this year, with expectations of a similar rural economy and a more buoyant US dairy industry on improved milk prices.

Sales rose 10.5 per cent to $106.36 million and earnings before interest and tax were down 1.5 per cent to $22.4 million.

A fully tax-paid dividend of 4 cents will be paid on October 15, retaining the total dividend rate at 7 cents per year.

Depreciation and amortisation costs rose 41 per cent after the acquisition of Bisleys Environment Systems, Stevens Filterite and Melbourne-based rubber goods manufacturer Deks Industries.

Stewart said all acquisitions had integrated well into the company and he expected these to contribute to improved earnings this year.

More acquisitions are likely to complement the company's existing operations beyond 2005.

Growth is also expected to come from the new rubber factory in China, which is now fully operational and expected to reach production targets by December. Stewart said there were expansion plans for the unit and its contribution should start to flow through in real figures in 2006.

The focus for growth through to 2009 will be breaking into niche international markets.