Skellerup Holdings (SKL) H2 2024 earnings summary

Executive summary

• Achieved record EBIT of NZD 72.7 million (up 1% year-over-year), marking the eighth consecutive record result, despite a 1% decline in revenue and challenging global markets.

• Operating cash flow reached a record NZD 70.8 million, up 31% year-over-year, supporting dividends, investment, and debt reduction.

• Strong international performance, especially in North America and Europe, offset weaker Australasian and Agri division results.

• Net debt reduced by 43% to NZD 15.4 million, supporting increased dividend payout and future growth investments.

• Dividend per share increased 9% to NZD 0.24, with a payout ratio of 94%.

Financial highlights

• Revenue declined 1% year-over-year to NZD 330.6 million; Industrial division up 4%, Agri division down 10%.

• Gross margin improved by 3% to 39% due to operational efficiencies and product mix.

• EBIT margin reached 22% in FY24.

• Reported NPAT was NZD 46.9 million, down 8% year-over-year, impacted by a one-off NZD 3.1 million deferred tax adjustment; underlying NPAT was NZD 50.1 million, down 2%.

• Dividend payout ratio at 94% of after-tax earnings.

Outlook and guidance

• Expect less pronounced seasonality between first and second half results in FY 2025.

• Confident in continued growth, supported by new product launches, operational improvements, and ongoing investment in equipment, people, and facilities.

• Industrial division expected to maintain growth with less seasonality than Agri.

• Early FY 2025 has started well, with strong July results and broad-based strength in industrial.

• Relocation of a US distribution facility planned to accommodate expected market growth.