Skellerup Holdings delivered a tenth consecutive year of EBIT growth with a 14% rise to NZD 89.3 million and expanded its climate initiatives, reporting a 24% jump in net profit to NZD 67.7 million.
- Record FY26 normalised EBIT of NZD 89.3 million, up 14%
- Net profit after tax rises 24% to NZD 67.7 million including non-recurring gains
- Revenue grows 10% to NZD 390.1 million, driven by US and European markets
- Dividend increased 18% to 30.0 cents per share with strong cash flow
- Expanded climate transition plans covering five key manufacturing sites
Tenth Year of EBIT Growth Caps Strong FY26 Performance
Skellerup Holdings Limited (NZX:SKL) has marked its tenth consecutive year of earnings before interest and tax (EBIT) growth, delivering a record normalised EBIT of NZD 89.3 million for the 2026 financial year, a 14% increase on the prior period. This robust performance underpinned a 24% rise in net profit after tax (NPAT) to NZD 67.7 million, which includes a NZD 3.5 million non-recurring gain primarily related to insurance proceeds from a fire-damaged extrusion line.
Revenue climbed 10% to NZD 390.1 million, fuelled by strong demand across both the Industrial and Agri divisions. The Industrial Division posted a sixth consecutive record EBIT of NZD 56.6 million, up 17%, with notable growth in potable water and wastewater products, roofing and construction, and marine foam applications, particularly in the US and UK markets. Meanwhile, the Agri Division achieved its second successive record EBIT of NZD 39.6 million, boosted by a 15% increase in sales of dairy consumables internationally, especially in North America and Europe.
International Expansion and Market Diversification
More than 80% of Skellerup’s revenue now originates from international markets, with the US accounting for 38% of total group revenues. The company’s strategy of maintaining key personnel in-market and strengthening customer relationships has paid dividends, allowing it to navigate tariff fluctuations and supply chain challenges arising from geopolitical tensions, including the Middle East conflict.
Skellerup’s Chair, John Strowger, highlighted the resilience afforded by its diversified customer base and global manufacturing footprint. The company has also taken steps to expand its presence in China and Europe, acquiring a Chinese dairy distributor and increasing resources in Europe. While cautious about acquisitions, the Board remains open to debt-funded opportunities given the company’s modest net debt of NZD 2.0 million and market capitalisation of approximately NZD 1.35 billion.
Strong Cash Flow Supports Increased Dividends and Capital Investment
Operating cash flow surged 26% to a record NZD 83.6 million, enabling Skellerup to fund capital expenditure of NZD 15.1 million and dividends totalling NZD 52.0 million. The full-year dividend was increased 18% to 30.0 cents per share, reflecting the Board’s confidence in the company’s sustainable earnings and cash flow generation. Dividend payout ratio stands at approximately 92% of normalised NPAT, supported by a strong balance sheet.
Advancing Climate Initiatives with Emissions Reduction Plans
Skellerup has embedded climate-related considerations into its strategy and risk management, with emissions reduction plans now implemented at five key manufacturing sites, covering 63% of its scope 1 and 2 greenhouse gas emissions. These initiatives are expected to reduce emissions by 7%, aligning with a 1.5°C warming pathway until 2031. The company continues to refine its scope 3 emissions measurement, which accounted for 95% of total emissions in FY26, reflecting the carbon embedded in purchased goods and services.
The company’s Climate Transition Plan includes both adaptation and emissions reduction components, focusing on manufacturing closer to key markets, developing alternative suppliers, and investing in energy-efficient equipment. Capital expenditure aligned with climate initiatives accounted for 42% of total spend in FY26.
Innovation Driving Product Development and Market Penetration
Skellerup continues to invest in technical capability and manufacturing modernisation to accelerate product development and meet growing demand. The Agri Division launched the Meadow Lifestyle footwear range targeting new consumer segments, with plans for international expansion. In dairy consumables, innovative Evolution ‘Driver’ liners, supplied in recyclable single-use shells, have demonstrated productivity gains in farm trials across the US, New Zealand, and China.
On the Industrial side, new products for potable water mixing valves and expanded offerings for shingle roofing systems in the US are expected to contribute to steady growth.
Governance and Risk Management Remain Central
Skellerup’s Board maintains a strong governance framework, with a diverse and experienced group of directors overseeing strategy, risk, remuneration, and sustainability. The company complies fully with the updated NZX Corporate Governance Code and integrates climate-related risks into its enterprise risk management processes. Independent auditor Ernst & Young has provided assurance on the company’s scope 1 and 2 emissions disclosures.
Looking ahead, Skellerup anticipates a moderation in growth rates as it balances near-term earnings with investments in capability, market development, and climate initiatives. The company’s broad product portfolio and global footprint position it to navigate economic cycles and evolving market demands.
With geopolitical uncertainties and supply chain challenges persisting, Skellerup’s ability to adapt manufacturing and supply strategies will be key to maintaining momentum. The company’s ongoing expansion in China and Europe, alongside its focus on innovation and sustainability, will be critical areas to watch as FY27 unfolds.
In a market where precision-engineered components underpin critical infrastructure and agricultural productivity, Skellerup’s blend of technical expertise, global reach, and environmental stewardship offers a compelling model for sustained growth.
The company’s next steps include monitoring tariff developments, scaling emissions reduction initiatives beyond FY27, and deepening its market presence in emerging regions. Investors will be keen to see how these strategic priorities translate into financial performance and shareholder returns in a dynamic global environment.
The challenge remains whether Skellerup can sustain its decade-long streak of EBIT growth amid evolving economic and regulatory landscapes, and how it balances innovation with operational resilience.
Bottom Line?
Skellerup’s record FY26 earnings and strong cash flow underpin an ambitious growth and climate agenda, but sustaining momentum amid geopolitical and market uncertainties will test its strategic agility.
Questions in the middle?
- How will Skellerup’s expansion in China and Europe impact its revenue mix and margins in FY27 and beyond?
- What are the potential financial implications if US tariffs re-escalate or supply chain disruptions intensify?
- Can Skellerup’s emissions reduction initiatives scale effectively to meet long-term climate targets without compromising operational efficiency?