On the 24th of November, Skellerup CEO David Mair joined us to update the firm and some clients on the business. David has been on the board since 2006, and CEO since 2011. His time at Skellerup can certainly be considered a successful one with David winning the Deloitte Top 200 CEO of the Year award in 2022.
The company has achieved a compound annual growth in revenue of 7% for the last seven years and double that pace at 14% per annum in profit growth over that period. The company produced a record Net Profit after Tax of $50.9m in the last financial year with expectations for a similar or slightly improved number this year. The share price has not followed suit, dropping 15.6% last year (2022) and 3.55% so far this year.
Whilst much of the information was not new, one aspect of the presentation that was notable was the philosophy that David adopts which appears to flow through the business. David spent a number of years in Japan where he learned the concept of Kaizen. The term that refers to on-going or continuous improvement. The definition of kaizen comes from two Japanese words: ‘kai’ meaning ‘change’ and ‘zen’ meaning ‘good’. This is something that David believes will help Skellerup continue to achieve revenue and earnings growth. This does not mean the company is not looking at making large leaps as well if the opportunity exists.
Skellerup have a very long history, tracing its origins back to 1910 when George Skellerup opened a shop in Christchurch. Fast forward 113 years, and the company is now a world leader in the design, manufacture and distribution of polymer products and vacuum systems. Skellerup provide engineered solutions for customers in dairy rubberware, water and related infrastructure, roofing, plumbing, automotive, mining and a range of other industrial applications.
Skellerup has two divisions – Industrial and Agri – and employ close to 800 people. The company has manufacturing and distribution facilities and partners in NZ, Australia, China, Vietnam, UK, Italy and the USA. Whilst revenue is globally dispersed, currently the North American market makes up 35 percent of revenue. David expects this to grow towards 45 or 50 percent in the years ahead as they target this area for growth.
HHG would like to thank the clients who attended and asked David some very interesting questions. The advisers certainly took a lot out of the presentation, and we hope you did too.