Skellerup has upgraded its forecast for the 2021 year. Photo / Supplied
Skellerup has increased its annual net profit range to $37-$39 million, up from a previous guidance of $33m-$37m, due to stronger-than-expected earnings and sales over the third quarter.
The latest guidance from the industrial rubber products manufacturer compares to a 2020 net profit of $29.1m.
Chief executive David Mair said all businesses continued to perform well.
Sales of potable water products in the United States and demand for Skellerup's flashing and plumbing products in all markets were robust in the third quarter and that demand was expected to continue in the fourth quarter, he said.
Sales of essential dairy consumable products were also better than expected during what is normally a seasonal low point.
"We are now moving into the peak part of the New Zealand season where dairy farmers undertake maintenance so expect a strong Q4 result," Mair said.
Demand for Skellerup's high-performance marine foam products continued to grow in all markets and the order book remained strong, particularly in the US.
Skellerup said however that the global shortage of containers and shipping space along with international port congestion was having an impact on the business.
The company's manufacturing teams were focused on securing raw materials and running operations as efficiently as possible to meet customer requirements.
Skellerup, makes industrial rubber products, dairy rubberware, waterproof footwear, closed-cell foam products, mining products, vacuum pumps and construction products. The company reports its result for 2021 on August 19.
The stock last traded at $4.44, up 9c from Friday's close.
NZX-listed Kiwifruit packhouse and coolstore company Seeka said just under 100 per cent of shareholders who voted at its annual meeting supported the $59 million acquisition of Opotiki Packing and Cool Storage (OPAC), exceeding the 50 per cent required.
Fred Hutchings, Seeka's chair, said the high level of support from the Seeka shareholders mirrored the support from the OPAC shareholders.
There were now only OPAC grower support and banking thresholds to be achieved for the transaction to proceed on May4, he said.
Seeka said in March that it had entered into an amalgamation agreement with OPAC.
Under the deal, OPAC shareholders will receive new shares in Seeka at the ratio of 1.4833 Seeka shares for every 1 OPAC share held, valuing the net assets of OPAC at $33.94m.
Seeka will assume $25.06m of debt as part of the acquisition, bringing the total transaction value to $59m.
Shares in Seeka last traded at $5.05, up 5c.
New Zealand carpet and wool company, Cavalier Corp said its Bremworth carpet business has secured a $1.9 million grant from the Ministry for Primary Industries (MPI), as part of MPI's Sustainable Food and Fibre Futures investment programme.
The grant will be used by Bremworth to help co-fund its $4.9 million research programme to build capability and support the development of a science-based and environmentally sustainable products.
"People don't realise how much plastic is going into their homes … or that synthetic carpet is made from plastic," Cavalier chief executive Paul Alston said. "Like many things, used carpet often ends up in landfill and a synthetic carpet put into landfill today will still be there many, many years later," Alston said.
Mercury NZ and infrastructure investor Powering Australian Renewables (PowAR) have lifted their offer for Tilt Renewables to $8.10 a share from $7.80 in response to a reported Canadian bid.
Separately, Tilt's majority shareholder Infratil said it supported the offer, which values its stake at $2 billion.
Tilt's shares last traded on the NZX at $7.81, up 31 cents or 4 per cent.
The revised bit comes after Australian media speculated that Canadian pension fund CDPQ may have launched a competing bid for the wind power specialist, which has extensive assets in New Zealand and Australia.
AusralianSuper was also understood to be on the sidelines.
Under the revised agreement, PowAR will acquire all the shares of Tilt - including Mercury's shares - at $8.10 for a total of $3.07 billion.
Mercury will acquire all of Tilt's New Zealand operations, including its future development options, for an enterprise valuation of $797m (previously $770m).
The acquisition of the New Zealand operations by Mercury will be funded from the sale of Mercury's 19.9 per cent Tilt shareholding, worth $608m (previously $585m) and net debt of $189m (previously $185m).
In addition to the increased price, the deal has been amended to remove provisions allowing Tilt to evaluate any "competing proposal" "giving greater certainty to all parties and Tilt shareholders that the transaction will complete by August".
Mercury chief executive Vince Hawksworth said it was important to keep Tilt's New Zealand renewable generation and development assets in New Zealand ownership.
"As New Zealand addresses the continuing need for decarbonisation and recognising the vital role that electrification plays, we believe ownership of these strategic assets by Mercury, a New Zealand owned generator with an outstanding track record of generation development, is in New Zealand's best interest," he said in a statement.
The Scheme requires Tilt shareholder approval and is conditional on High Court approval, and regulatory approvals. The scheme is expected to be finalised in August.
Most of New Zealand's local and regional governments are likely to have rising infrastructure budgets over the next decade, which could erode "headroom" at their current credit rating levels, S&P Global Ratings said.
The councils are scheduled to publish their 2021-2031 long-term plans later this year, and they will likely roll infrastructure backlogs from the fiscal 2020 year into the upcoming years, the ratings agency said.
"Despite the likely increase in infrastructure expenditure, we recognize councils typically spend below their plans due to capacity constraints, ambitious planning, and lengthy approval processes," S&P Global Ratings credit analyst Rebecca Hrvatin said in a report.
Local councils' credit quality, meanwhile, remained favourable and the nation's economy and fiscal outcomes were rebounding quickly in the wake of the Covid-19 pandemic, S&P said.
"We believe there's more uncertainty than usual over the extent to which councils will deliver the budgets they propose in their upcoming 2021-2031 long-term plans, especially future infrastructure requirements," she said.
"This is because proposed reforms to water supply, stormwater, and wastewater could reshape the landscape of some councils."
The Government has proposed shifting water supply, wastewater, and stormwater responsibilities from councils to other entities.
S&P said capacity constraints will stall some of the infrastructure plans because all levels of government are rapidly increasing their infrastructure expectations.
New Zealand local authority ratings are high and on par with local authorities in Australia and Canada, but slightly below Sweden's.
Water and roading feature strongly on most council's spending plans.
S&P said credit quality had increased for the 24 New Zealand councils that the agency rates.
Fiscal management and flexibility helped councils recover quickly from the Covid-19 pandemic.
In February, S&P raised its ratings on the New Zealand sovereign, six local councils, and five government-related entities because the country was recovering faster than most other advanced economies from Covid-19.
The positive outlooks on Western Bay of Plenty and South Taranaki district councils reflected the councils' declining or stabilising debt levels, narrowing after-capital deficits, and improving financial management.
"The negative outlooks on Hastings and Tasman district councils reflect the risk that large deficits could be prolonged, leading to weaker liquidity and higher debt than we currently expect," S&P said.
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