22 Feb 2013

Skellerup reduces forecast for full year profit

7:21 am on 22 February 2013

Skellerup says the slow start to the year has led it to reduce its forecast for full year profit but it's repositioned itself to benefit from anticipated growth in the US market.

The specialist plastics and gumboot maker made $9.5 million in the six months to December, a decrease of 18% compared with the same period a year ago.

Revenue fell 7% to $95 million, with a fall in income from its industrial arm due to reduced demand for pumps and technical rubber products, while earnings from its agriculture division remained stable.

Skellerup chief executive David Mair said the half year was the most difficult trading period experienced since 2009 when the full impact of the global financial crisis was felt.

But he said there are indications that trading conditions will improve in the second half.

Mr Mair said the business has been positioned so it will continue to have strong cash flow even in a downturn, but primarily it's been positioned for the US.

He said the US market has a lot of opportunity and a number of Skellerup's key businesses would benefit from an upturn in its economy with early signs that that is starting to happen.

Mr Mair said it's reduced its expected full year profit from $22 to $24 million, to $20 million.

Shares closed down 11 cents to $1.53 each on Thursday.