Skellerup sees annual profit growth of up to 18%

Skellerup Holdings sees annual earnings growth of up to 18 percent.

Skellerup Holdings [NZX: SKL], the industrial rubber goods maker, sees annual earnings growth of up to 18 percent as it looks to cash in on growing demand for food safety and clean energy applications.

Annual profit of between $21 million and $24.5 million is expected in the year ending June 30, 2015, from an adjusted profit of $20.7 million a year earlier, which stripped out a one-off insurance gain, chairman Selwyn Cushing told shareholders at today's annual meeting in Auckland. Though a lower payout to dairy farmers is seen as a headwind for earnings, a greater focus on food safety and increased global demand for clean energy opened up opportunities for the manufacturer.

"On a broader scale, food safety also opens opportunities for further innovations - which will only be enhanced once our new Wigram site is up and running," Cushing said in speech notes published on the NZX. "Clean energy particularly through increasing global demand for natural gas, is another key factor that underpins our business."

Skellerup missed analyst expectations with its 2014 earnings, with slower than anticipated earnings growth from its industrial unit, which manufactures and distributes technical polymer products for construction, infrastructure, automotive, mining and other industrial customers.

Chief executive David Mair told shareholders the major variables hanging over the forecast are the speed and breadth of the US economic recovery, the impact of the lower Fonterra payout to dairy farmers, and the timing of mining expenditure.

The company is investing in new personnel, new markets and product development to help boost earnings and revenue growth, and sees its geographic diversity as a mitigating factor in the event of a downturn.

Shares of Skellerup fell 0.7 percent to $1.45, and have dropped 16 percent this year.