Where is the growth going to come from?
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Originally Posted by
winner69
Snoops me old mate
The Note on Intangibles listed the 4 Cash Generating Units.
Cash-generating unit with goodwill in $000
Gulf 32,937
http://www.skellerupholdings.co.nz/M...Industrial.php
"Gulf Rubber is an internationally recognised designer and manufacturer of a range of compressed and moulded thermoplastic elastomers. Products include pipe seals, diaphragms, washers, gaskets, customised rubber mouldings, check valves, O rings, disks and other components for a wide range of global customers in industries including automotive, industrial, mining pipe, valve and medical."
from p10, Annual Report 2013
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Gulf Rubber was acquired in 2006. Gulf Rubber encompasses design and manufacturing activities in Australia, New Zealand and Italy, and a sales and distribution facility in the USA. Located near Charlotte, North Carolina, Gulf US is at the heart of a significant manufacturing belt in the USA. Prior to establishing its US facility in early 2012, Gulf Rubber serviced its US customers from Australia. By setting up in a 2,000m2 climate-controlled warehouse, complete with quality control and metrology laboratory, Gulf US has created meaningful benefits for its industrial, appliance, plumbing and automotive customers.
This Gulf purchase included a valuable relationship with Ruthimex, a contract manufacturing partner based in Vietnam. The demonstrated ability of the Ruthimex operation has enabled the relationship to grow significantly over the past seven years to include products in the Deks roofing and plumbing products range and, most recently, from the manufacture of Ultralon foam products."
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http://www.skellerupholdings.co.nz/Mobile/Agri.php
"Ambic is a world leading specialist in the development, production and distribution of dairy hygiene and livestock health management products. In particular, Ambic is the world's leading supplier of mastitis prevention and mastitis detection equipment"
Ambic was acquired by Skellerup in 2005.
http://www.skellerupholdings.co.nz/M...Industrial.php
DEKS designs and supplies sealing and waterproofing products for roofing, plumbing and civil/underground applications. Operating internationally, Deks has a strong market presence in Australia, North America, Asia and Europe and a growing presence in South America. DEKS brands are internationally recognised and have been sold throughout the world for more than 40 years.
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Stevens Filterite 431
http://www.skellerup.co.nz/dairy-int...l/milk-filters
"a proud history of manufacturing only the highest quality milk filters to the global dairy market."
Manufacturing base: Featherston NZ
This link:
http://www.skellerupholdings.co.nz/Mobile/Agri.php
says they only service the Australasian market. So maybe they are in the middle of a plan to take 'Stevens Filterite' global?
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Total goodwill 44,174
One of these CGUs has assumed revenue growth of 15% pa and one (probably only 1) has growth at 2% pa
Which one sells gumboats in Vietnam?
Gulf, via they contract manufacturing arrangement in Vietnam ;-P?
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My guess the 15% growth unit is Gulf seeing that gets the biggest rave in the AR ....or it might be Stevens Filterite seeing it seems to be the smallest 'acquisition'
They made a point in AR2016 about securing the contract for driveline couplings for Chinese market Mercedes E Class vehicles.
http://carsalesbase.com/china-car-sa...-benz-e-class/
A total of 57,439 were made in China last year (2016). Sales to the end of August 2017 were already 74,816 with still four months of the year to go. So looks like SKL could be onto a winner here.
Before this contract the main driveline coupling success story was Maserati
http://carsalesbase.com/us-car-sales-data/maserati/
But as you can see total sales for all models were only 12.534 in 2016. So it is the Mercedes contract that has put Skellerup driveline couplings in a different league.
The AR2017 presentation p5 highlights the large infrastructure opportunities coming up in Auckland and Melbourne in particular
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• Government spending in NZ, AUS and US on infrastructure expected
‒ Auckland Watercare ~NZD 4.9bn, 10 years.
‒ Victoria Water ~AUD 5.6bn, 5 years.
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So those growth projections could be for Gulf.
Yet, given we are talking 'revenue growth', that is easier to get from a small base. For this reason I am guessing the 15% revenue growth projection is most likely from 'Stevens Filterite' going global.
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No doubt you have already sussed that the assumptions used to test goodwill are nothing to do with any assumed total company,division or geographical growth
The assumptions to test goodwill must be related to projected divisional growth surely? Because the goodwill was acquired as a direct result of the purchase of a certain division. And if that division doesn't meet its growth projections then goodwill might be, but not necessarily (if the price paid did not assume a very aggressive future growth strategy would be fulfilled), come up for impairment?
SNOOPY