New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

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New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Skellerup (SKL) 1H22 First Impressions</h2>
Skellerup (SKL) reported 1H22 NPAT +19% on the prior year to NZ$23m. This was in line with recent guidance and our forecasts and under pinned by strong growth in the industrial division largely due to potable water and waste products. Agri growth was more modest due to raw materials inflation and supply chain delays. SKL guided to FY22 NPAT of NZ$44-47m which implies a relatively wide range for 2H22 NPAT growth of 0-15%. While FY22 NPAT guidance is slightly below our current forecasts (ForBarr NZ$48m, Bloomberg consensus NZ$46m), recent history of conservative guidance coupled with continued momentum across both of SKL’s divisions underpinned by recovering global economic activity gives us comfort that earnings risks are to the upside. That said today’s result and guidance is unlikely to materially move market earnings forecasts and the share price.
Key points from result:
<ul>
<li>Agri – Revenue +7% and EBIT +9% on the pcp. Footwear sales growth in all markets, particularly in NZ. Dairy rubber sales growth in both the USA and NZ but raw materials cost inflation and supply chain delays impacted margins. SKL is investing to reduce lead times.</li>
<li>Industrial – Revenue +12% and EBIT +20% against pcp. Growth across all key businesses particularly water, marine foam and roofing. Also benefitted from Talbot acquisition earnings.</li>
<li>Balance Sheet – Net debt of NZ$25.6m (FY21 NZ$6m) up due to the acquisition of Talbot (NZ$10m) as well as planned investment in inventory.</li>
<li>Guidance – SKL is guiding to FY22 NPAT guidance of NZ$44-47m. (FB current NZ$48.2m)</li>
</ul>
Result summary (NZ$m)
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/257/648/original/image_47272078471645061421544.png?1645061422" class="editor-image img-responsive" data-smartkarma-image-id="257648"></figure>
Source: Forsyth Barr analysis

Skellerup (SKL) 1H22 First Impressions
Skellerup (SKL) reported 1H22 NPAT +19% on the prior year to NZ$23m. This was in line with recent guidance and our forecasts and under pinned by strong growth in the industrial division largely due to potable water and waste products. Agri growth was more modest due to raw materials inflation and supply chain delays. SKL guided to FY22 NPAT of NZ$44-47m which implies a relatively wide range for 2H22 NPAT growth of 0-15%. While FY22 NPAT guidance is slightly below our current forecasts (ForBarr NZ$48m, Bloomberg consensus NZ$46m), recent history of conservative guidance coupled with continued momentum across both of SKL’s divisions underpinned by recovering global economic activity gives us comfort that earnings risks are to the upside. That said today’s result and guidance is unlikely to materially move market earnings forecasts and the share price.
Key points from result:

Agri – Revenue +7% and EBIT +9% on the pcp. Footwear sales growth in all markets, particularly in NZ. Dairy rubber sales growth in both the USA and NZ but raw materials cost inflation and supply chain delays impacted margins. SKL is investing to reduce lead times.
Industrial – Revenue +12% and EBIT +20% against pcp. Growth across all key businesses particularly water, marine foam and roofing. Also benefitted from Talbot acquisition earnings.
Balance Sheet – Net debt of NZ$25.6m (FY21 NZ$6m) up due to the acquisition of Talbot (NZ$10m) as well as planned investment in inventory.
Guidance – SKL is guiding to FY22 NPAT guidance of NZ$44-47m. (FB current NZ$48.2m)

Result summary (NZ$m)

Source: Forsyth Barr analysis

Skellerup (SKL): 1H22 First Impressions - In Line

Skellerup Holdings

Skellerup (SKL): 1H22 First Impressions - In Line