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Skellerup projects 2017 profit to rise

NZ NewswireNZ Newswire 26/10/2016 Paul McBeth

Skellerup Holdings expects annual profit to rise as much as 7 per cent, recovering from last year's decline, as the industrial rubber goods maker puts greater emphasis on potable water applications and food safety.

The company forecasts net profit of between $20 million and $22 million in the current financial year ending June 30, up from $20.5 million in 2016, it said in a statement ahead of its annual meeting in Auckland.

"Our focus on products and systems for potable water applications and food safety provides a resilient business platform for Skellerup," chief executive David Mair said.

"We expect these attributes to counter continued low international milk, iron ore and oil prices impacting demand, and the strength of the NZD which is reducing translated earnings from our overseas businesses."

Skellerup's 2016 earnings were hit by a downturn in demand from its agricultural business, which provides rubber products to the dairy industry, as weak milk prices prompted the postponement of some spending.

Chairman Selwyn Cushing said the company's new rubber factory in Christchurch's suburb of Wigram started operations and replaced Skellerup's old Woolston facility, which had been the cornerstone of the agri-division.

Skellerup shares rose 0.7 per cent to $1.42, having fallen 6.6 per cent so far this year.

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