Skellerup (SKL) Fundamentals

[winner69]

Stunning half year result

http://nzx-prod-s7fsd7f98s.s3-websit...247/274475.pdf

Doesn’t look like too much can go wrong from here for Skellerup

Maybe past the gunna era .....and into the dunnit era

Good stuff

[Filthy]

fantastic result & better than what I had expected.

increase in the divi and forecast, plus plenty of room for future growth.

v happy holder



filthy

[percy]

Stunning half year result

http://nzx-prod-s7fsd7f98s.s3-websit...247/274475.pdf

Doesn’t look like too much can go wrong from here for Skellerup

Maybe past the gunna era .....and into the dunnit era

Good stuff

Been there before and ended up a poor year.
That was with Sir Selywn.
Luckily for shareholders Chair Liz Coutts is more credible.

[Scrunch]

Net Profit after tax
2013 $19.0m
2014 $22.3m
2015 $21.9m
2016 $20.5m
2017 $22.1m

2017 EPS 11.46 cps. Chose whatever PE you think is appropriate for their track record and outlook.
Disc: Don't hold.

The forecast is now $24.5 to $26.0m. Good growth if the bottom end is hit. Very good growth if the mid-upper end is hit. Lingering question what confidence do I have the result will be either inside the range estimated or above it?

[macduffy]

The forecast is now $24.5 to $26.0m. Good growth if the bottom end is hit. Very good growth if the mid-upper end is hit. Lingering question what confidence do I have the result will be either inside the range estimated or above it?

I'd have more confidence in this board's forecasts than in most, as percy suggests. Incidentally, Chair Liz Coutts and Alan Isaac are also key directors of OCA, FWIW.

Disc: I hold both.

[Snoopy]

fantastic result & better than what I had expected.

increase in the divi and forecast, plus plenty of room for future growth.

v happy holder

I was a little disappointed with this:

"Future dividends are likely to carry only partial imputation (~60%) as the growth in earnings is largely coming from Skellerup’s international operations."

However, on reflection it isn't really a surprise. Local manufacturing is directed towards the Agribusiness side of things, and even then the gumboots are made in Vietnam. It looks like most of the growth in the future will be in other areas, products made overseas for customers overseas. There are no imputation credits available for NZ shareholders from a manufacturing business that is structured in this way.

Given that the industrial division is the growth engine of the future, I was excited to see the break down by 'application' (p4 of the HY2018 presentation). I immediately looked back a year to see how the revenue streams had changed one year on. However no such equivalent break down was given in the HY2017 slide show. The emphasis there was on the geographical spread of sales and that wasn't mentioned this half year. I do find it frustrating when companies do this, although cynically you might easily be able to imagine why. But it does make it harder to truly track how a company is doing year on year.

On another note, net profit margin for HY2018 was: $11.7m /$166.7m = 7.0% (c.f. 8.9%for FY2017). This is well down and sets a new low for the company in recent years.

Annualised ROE for HY2018 was ($11.7m x2)/$163.090m = 14.4% (c.f. 11.8%for FY2017). This is a good improvement, tracking towards Buffett's 15% target.

Despite the headline NPAT figure being up, it looks like there are some very tough markets out there as regards profit margin. But of course we are only just starting. The new factories and production lines are ready, and once production approaches full capacity, just watch the ROE and net profit margin figures soar from here. Right fellow shareholders?

SNOOPY

[Filthy]

good detailed analysis as always snoop!

I was a little disappointed with this: "Future dividends are likely to carry only partial imputation (~60%) as the growth in earnings is largely coming from Skellerup’s international operations."

the next divi carries full imp thou, so that’s all good. and going forward, a ~60% imp of a (potentially) growing divi sounds better than 100% fully imp of a flat one eh??

But of course we are only just starting. The new factories and production lines are ready, and once production approaches full capacity, just watch the ROE and net profit margin figures soar.

yep - not to mention the new product development which should also help too eh!




filthy

[Scrunch]

Losing part of the dividend imputation will be annoying. Perhaps they should consider flat dividends and a progressively increasing amount allocated towards share buybacks. Turn the dividend into capital growth and shareholders can decide to keep there holding unchanged or release cash by selling some shares. Disc holding.

[Snoopy]

good detailed analysis as always snoop!


the next divi carries full imp thou, so that’s all good. and going forward, a ~60% imp of a (potentially) growing divi sounds better than 100% fully imp of a flat one eh??


filthy

Losing part of the dividend imputation will be annoying. Perhaps they should consider flat dividends and a progressively increasing amount allocated towards share buybacks. Turn the dividend into capital growth and shareholders can decide to keep there holding unchanged or release cash by selling some shares. Disc holding.

While I agree with yours sentiments Scrunch, from an investment perspective, I often find that doing things for tax reasons only usually turns out badly :-(.

As filthy has said an increasing partly imputed dividend with an unimputed bit that is growing is better than a flat fully imputed dividend. I personally am happy with that (having been softened up by the Gentailers doing the same!). But I do think your suggestion has merit Scrunch, and would suggest it is worth bringing up at the next AGM.

SNOOPY

[RTM]

While I agree with yours sentiments Scrunch, from an investment perspective, I often find that doing things for tax reasons only usually turns out badly :-(.

As filthy has said an increasing partly imputed dividend with an unimputed bit that is growing is better than a flat fully imputed dividend. I personally am happy with that (having been softened up by the Gentailers doing the same!). But I do think your suggestion has merit Scrunch, and would suggest it is worth bringing up at the next AGM.

SNOOPY

I am more than happy to see the dividend increasing over time, even if it is unimputed.
Personally I am not at all keen on having to sell some of my shares, possibly an annoyingly small portion, to generate income equivalent to a dividend.