Record for Skellerup

Skellerup has today announced a record net profit after tax (NPAT) of $11.5m for the six months ended 31 December 2011, compared with $9.8m for the half-year to December 2010, an increase of 17.2% on the pcp.

Key points

· First half trading in line with expectation and in line with the full year NPAT projection

(see below).

· Revenue of $103.0m, 6.9% ahead of the previous corresponding period (pcp).

· EBITDA of $21.1m, 10.0% higher than pcp

· EBIT of $17.7m, 14.2% ahead of pcp.

· NPAT of $11.5m, 17.2% ahead of pcp.

· Interim Dividend of 3.0 cents per share, fully imputed, to be paid on 30 March 2012.

· Expectations for second half trading consistent with projected Full Year NPAT within the range of $22m to $23m (i.e. exceeding the record level achieved in the 2011 year), as previously provided to the market.

Both the Agri and Industrial divisions have performed well throughout the period despite some worsening market conditions, particularly in Europe and Australia. Notable gains have been achieved, particularly – Flexiflo (a specialised product for the Australian mining industry), Industrial Vacuum Pumps, and Dairy rubberware, both local and International.

Industrial

The Industrial division has performed well overall and excellently in some areas, with revenue up 5.0% and earnings at the EBIT level up 12.5%.

Good progress is being made in the development of the driveshaft coupling begun in Gulf Rubber Australia with further development in Vietnam. This product is being marketed and developed with key customers mainly in the European market. Demand for other technical products, such as gas conversion kits from Tumedei, is seasonal and so we are expecting good results in the next period.

Very good growth has been achieved in revenue and earnings from the sale of vacuum pumps into the US oil and gas markets. The focus on operational gains in production in

China, and also in logistics shipping to the US, has enabled consistent supply of product. This supply has meant we not only continue to meet the increased demand from existing customers, but have gained some new customers.

The development of the second generation Flexiflo mining product has led to increasinginterest, with several large contracts in the process of being finalised. There has also beenan increase in demand for replacement parts as mine volumes are increased to meet newChina demand.

Sales of Deks roof flashings and plumbing products into the Australian market have becomeincreasingly competitive. The opportunities for growth are in overseas markets particularly in the US.

Agri

The Agri division also performed well with revenue up 10.7% and earnings at the EBIT level up 11.1%.

This result came from a combination of improved factory efficiencies, growth in the international and local markets for dairy liners and filters, and some improvement in demand for products of a more capital nature. This result reflects ongoing confidence in thedairy industry worldwide.

Dividend

The Directors have declared an interim dividend of three cents per share, fully imputed, which will be paid on 30 March 2012 to shareholders on the register at 5pm on 16 March

2012. The Dividend Reinvestment Plan will not be operative for this particular dividend payment.

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