Skellerup (SKL) Fundamentals

[upside_umop]

Final dividend of 2.5cps announced too. 'Well positioned?'

Market seems to like, up 3 currently on above average volume (average according to the iPhone is 161k, not sure over what time period this is however).

[percy]

Result beat forecast with NPAT $11.9m or $14.5m before abnormals. Despite some caution in comments (as per most global commentaries), forecast is NPAT $16-$17m for 2011, i.e. forward PE of 8.5 at current sell of 74cps.

Well done yet again Lizard.yes you can post "I told you so".

[Catalyst]

A good turnaround result I thought.

Key metrics from today's FY10 result:
EBITDA = $31.8m (excl $3.2m abnormal costs pre-tax)
NPAT = $14.5m (excl $2.5m abnormal costs after-tax)
Net debt = $26.6m
FY dividend = 4.5c

# shares = 191.1m
Current share price = $0.78
Market cap = $149.1m

Current PE = $0.78 / ($14.5m/191.1m) = 10.3x
Current EV/EBITDA = ($149.1m + $26.6m) / $31.8m = 5.5x
Gross dividend yield = 4.5c / 78c / 70% = 8.2%

My valuation is around the $0.90 mark, based on:
PE of 12.0x = 12.0 x ($14.5m/191.1m) = $0.91
EV/EBITDA of 6.5x = (6.5 x $31.8m - 26.6m) / 191.1m = $0.94

If we use the company's guidance for FY11 of NPAT between $16 - $17m, it doesn't materially change my view on fair value:
Forecast NPAT = $16.5m midpoint
Forecast EBITDA = $33.0m (NPAT + $7.1m tax + $2.1m int + $7.2m dep'n/amort'n)

Using slightly lower multiples given it is a year away, I still get values around the $0.90 - $1.00 mark:
PE of 11.5x = 11.5 x ($16.5m/191.1m) = $1.00
EV/EBITDA of 6.0x = (6.0 x $33.0m - $26.6m) / 191.1m = $0.90

Anyone got any different values?

[Lizard]

My spreadsheet throwing out 91cps for now, Catalyst.

Am happy with it hitting 80cps today on good volume. Now 100% gain on the rights and over-subscriptions that we got last year. Just grumpy that I got scaled by more than Kura and Zigzag did!

[zigzag]

My spreadsheet throwing out 91cps for now, Catalyst.

Am happy with it hitting 80cps today on good volume. Now 100% gain on the rights and over-subscriptions that we got last year. Just grumpy that I got scaled by more than Kura and Zigzag did!

Just for the record Lizard. I started off with 4000 shares. I don,t rember what my actual entitlement was, but I sent in a cheque for one thousand dollars. That is, I applied for 2500 shares, and I was alloted 2411. That mightn't cheer you up, but the result and upcoming dividend should do the trick.

[Lizard]

Wonder if SKL will be needing to speed up that Woolston Revamp project they were talking about in the June newsletter...

[winner69]

Wonder if SKL will be needing to speed up that Woolston Revamp project they were talking about in the June newsletter...

With the liquificqtion problem post earthquake gumboots could do well

[kiora]

6 September 2010.

Skellerup Holdings Limited escapes serious business disruption

The 7.1 magnitude earthquake that struck Christchurch on Saturday 4 September 2010 has
caused a lot of infrastructural damage within the city and fortunately it appears that
there are no casualties and as few as two serious injuries.

Skellerup has two factory locations and a separate warehouse in Christchurch all located
in Woolston, 3km south east of Christchurch whilst the epicenter of the earthquake is
located in Darfield, 45 km west of Christchurch. Skellerup employs more than 270 people
in New Zealand with over 200 of those employees in Woolston.

Acting Chief Executive Officer David Mair said that even though there was a shift working
on site at the time of the earthquake, no one has been injured.

“It is incredible that not only have there been no injuries to staff, it appears that
there is little or no significant damage to buildings or machinery. Our immediate focus
is to make sure that all our staff are safe and well.

Obviously the next concern has been infrastructure. Electricity, town water supply and
all computer and communication systems are functioning on all three sites. Local
management has been carefully checking the sites and the outlook is very positive.

The warehouse located on Curries Road appears to have been unaffected. Racking and
inventory is all in good order and the expectation is that ex-stock deliveries will be
available as needed.

The other small production unit in Dyers Road also appears to be unaffected and all
systems appear to be ready to begin production.
The main site in Marshall Street contains critical machinery for the production of many
of our key dairy products. All machinery relating to the Dairy industry were safely and
correctly shut down, in line with company procedures. The attitude of the management and
staff on site has been magnificent.

This is great news for ensuring continuing supply to our Customers. With the warehouse
operation seemingly unaffected, we should be able to meet any immediate demand from
existing inventories.

The other factories will open after confirmation by independent engineers that the
structures are indeed safe as we expect. In other words, there should be little impact on
our supplies to Customers.

Our NZ dairy season was just beginning to slow down and the stock build for the overseas
markets happens later in the year.

Skellerup has comprehensive material damage and business interruption insurance cover.

Although this has been a major event for the people, production and distribution units in
Christchurch, we do not see any material financial impact on the business at this time.

For more information please contact:
David Mair
Acting CEO

[rabcat]

[QUOTE=Lizard;316806]My spreadsheet throwing out 91cps for now, Catalyst.

The share price has hit 91 cents today! Are we at the top?

I have a question.

I brought a heap of these shares over the last year with an average buy price of 48 cents.

I am not sure what I should do and what is the best strategy? i.e. Should I sell them all and make a nice profit? Should I sell half of them and get all the money i invested back and keep the other half as profit? or should I hold and wait for the share price to climb even further?

Does any one have any thoughts how they would play this?

[winner69]

My spreadsheet throwing out 91cps for now, Catalyst.

The share price has hit 91 cents today! Are we at the top?

I have a question.

I brought a heap of these shares over the last year with an average buy price of 48 cents.

I am not sure what I should do and what is the best strategy? i.e. Should I sell them all and make a nice profit? Should I sell half of them and get all the money i invested back and keep the other half as profit? or should I hold and wait for the share price to climb even further?

Does any one have any thoughts how they would play this?

Why sell now when things are just beginning to come right .... longer term investors would be holding for the next few years I would think

Even if you are only trading SKL short term it is still in a strong uptrend .... and no one knows when that uptrend will stop

Posting questions like that will get you the wrath of Phaedrus .... where is your exit strategy? ..... let the profits run is another of his tips

Anyway congrats on your winnings at the casino anyway