Table of Contents
What changed
Skellerup reported record FY25 revenue of NZD 353.5m (up 7% on pcp per the release) and record NPAT of NZD 54.5m (up 9% on pcp). Operating cash flow was NZD 66.5m, which the company itself flagged as down 6% on pcp due to working-capital investment. Capex of NZD 9.2m left pre-lease free cash flow of NZD 57.3m, covering NPAT at 105.1% versus 146.2% in the supplied prior-period base. Net debt fell to NZD 12.4m from NZD 26.4m, with gross borrowings down 39.6% to NZD 28.0m, and equity rose 9.7% to NZD 240.2m. The announced final dividend is 16.5cps (50% imputed); combined with the 9.0cps interim, the full FY25 distribution totals 25.5cps. On segment mix, Industrial contributed NZD 241.3m of revenue (68.2% share) at around 20.1% EBIT margin, while the smaller Agri division at NZD 113.8m earned roughly 31.1%, so Agri remains the margin engine even though Industrial is the top-line driver.
What matters
- Cash conversion deteriorated even as earnings grew. NPAT rose but OCF fell 6%, a direct contradiction the company attributes to working-capital investment. Trade debtors rose 20.9% and inventories rose 6.8%, adding roughly NZD 14.2m to operating working capital. FCF/NPAT compressed from 146.2% to 105.1% — still above unity, but the trajectory is the wrong way.
- Leverage profile strengthened materially. Net debt approximately halved to NZD 12.4m and gross borrowings dropped by NZD 18.4m. Combined with 9.7% equity growth, this creates meaningful balance-sheet capacity — relevant given the larger dividend and the stepped-up working-capital intensity.
- Dividend step-up is the clearest shareholder signal. The 16.5cps final is 94.1% above the 8.5cps prior-year final, and the full-year 25.5cps payout sits well inside NPAT. Board conviction in the earnings base is evident; the flip side is that capital is leaving the business at the same time working capital is absorbing more of it.
Expectations
No quantified forward-work balance, formal earnings guidance, or stated multi-year target was disclosed in the supplied excerpts, so the release cannot be benchmarked against a company-set outcome. On seasonal shape, the first half (HY25) delivered 46.8% of full-year revenue and 44.3% of full-year NPAT, confirming Skellerup remains modestly second-half weighted — HY25 itself was already flagged as a record, so the second half extended rather than reversed that momentum. The FY25 result therefore supports a narrative of broad-based earnings growth and deleveraging, but does not, on its own, speak to FY26 run-rate beyond the implied H2 revenue of NZD 188.1m and H2 NPAT of NZD 30.4m.
Quality of result
Mixed. The earnings line is genuine: there is no tax distortion (effective rate 26.5% vs 26.1% prior), no quantified one-off adjustment disclosed despite a reference to an "abnormal tax item," and PBT grew broadly in line with NPAT. ROE stepped up to 22.7%. However, the cash story is the soft spot: operating cash fell while profit rose, and that gap is working-capital-driven rather than timing. Pre-lease FCF still covered NPAT, but only just, and the conversion ratio dropped ~41pp. Balance-sheet assistance is limited — the deleveraging was real, funded by cash generation rather than disposals in the supplied data. The segment margin profile also shows Agri margin expanding while Industrial margin slipped slightly, so earnings durability depends meaningfully on Agri sustaining its uplift.
Unresolved
- What specifically drove the Agri EBIT margin expansion — pricing, mix, or cost base — and is it sustainable into FY26?
- Is the working-capital build positioning for known FY26 demand, or is it inventory drag in Industrial that will need to unwind?
- What is the quantum of the referenced "abnormal tax item," given it is named in the financial report but not separately disclosed in the supplied extraction?
- No customer, geographic, or FX concentration detail was provided, so the exposure profile behind the 7% revenue growth is opaque.
This briefing cannot assess forward order book, FY26 guidance, or valuation, because no forward-work balance, earnings target, or NTA disclosure was included in the supplied data.
Key metrics
| Metric | FY25 | FY24 | Change |
|---|---|---|---|
| Revenue | $353.5m | $157.7m | +124.1% ↑ |
| Net profit after tax | $54.5m | $21.6m | +152.4% ↑ |
| Net cash inflow from operating activities | $66.5m | $36.5m | +82.3% ↑ |
| Final dividend per share | 16.5c | 8.5c | +94.1% ↑ |
| Operating profit | $78.0m | $31.6m | +146.6% ↑ |
| Profit before tax | $74.3m | $29.2m | +154.1% ↑ |
| Cash and cash equivalents | $15.6m | $20.0m | -22.0% ↓ |
| Total assets | $349.3m | $330.6m | +5.7% ↑ |
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| Agri Division | $113.8m | $48.5m | $35.3m | +1.4pp |
| Industrial Division | $241.3m | $109.6m | $48.4m | -1.3pp |
Analytical metrics
| Metric | FY25 | FY24 | Context |
|---|---|---|---|
| PBT growth | +154.1% | — | — |
| Effective tax rate | 26.5% | 26.1% | — |
| FCF pre-lease | $57.3m | $31.6m | +$25.7m |
| FCF / NPAT | 105.1% | 146.2% | complementary conversion metric |
| Capex % revenue | 2.6% | 3.1% | — |
| Capex | $9.2m | −$4.9m | +$14.1m |
| Debtor days | 55.7 | 103.3 | -47.6 days |
| Inventory days | 80.4 | 168.7 | -88.3 days |
| Operating working capital | $131.8m | $117.5m | +$14.2m absorbed |
| Trade debtors | $54.0m | $44.6m | +$9.3m |
| Net debt | $12.4m | $26.4m | −$14.0m |
| Gross borrowings | $28.0m | $46.4m | −$18.4m |
| Payout ratio vs NPAT | 59.3% | — | — |
| ROE (annualised) | 22.7% | 9.9% | Strengthening |
| HY25 share of FY25 revenue | 46.8% | — | Other half was 53.2% |
| HY25 share of FY25 NPAT | 44.3% | — | Other half was 55.7% |
| Profit from continuing operations | $54.5m | — | — |
This analysis was generated using Annolyse, an AI-powered tool that analyses NZX company announcements. The analysis is based on available company filings and standard Annolyse calculations. This is general information only and does not constitute financial advice. The analysis may contain errors. Always read the original company filings and consult a licensed financial adviser before making investment decisions.