13.08.2010

Skyjack continues recovery

Skyjack owner Linamar has reported its second quarter results which show a strong recovery for the group, with improving sales volumes at Skyjack.

Skyjack is the largest part of Linamar’s Industrial division, where revenues are up over 50 percent for the first six months to c$78 million, but this is due to a major revenue reversal in the first quarter of 2009 and is not a good comparative measure.

In the second quarter revenues for the industrial sector declined 17.5 percent decline, but Linamar says that this is due to sales falls in the Fabrication and Consumer products divisions and that Skyjack continued to increase its sales, year on year as rental customers start to buy equipment again.

The Industrial division is still posting losses, although they are significantly smaller than for 2009. In the first six months it lost c$10.6 million, compared to $18.7 million last year. For the second quarter the loss was c$2.7 compared to c$6.5 in the same period of 2009.

The group as a whole has seen a very strong recovery in its fortunes, with revenues for the six months up 25.5 percent to just over c$1 billion, while the second quarter saw an increase of 50 percent.

Net profit for the period is c$48.2 million compared to a loss of c$22.7 million for the same period last year.

Linamar chief executive Linda Hasenfratz said: “We are happy to see our strong first quarter results improve even further in the second quarter. We are continuing to focus on improving earnings through top line growth coming from our robust launch book on a global basis.”

Vertikal Comment

Linamar’s interim results statements are way too sketchy to make any in depth comment, however it does seem that Skyjack continues to do at least as well as its main rivals, however it is also now substantially smaller. The company is very well placed to come out of the recession faster than the others in that it has a strong parent and plenty of spare capacity which it could ramp up quickly.

When the access market does begin to pick up more rapidly, possibly in early 2012 there will be shortage of product and extended availability as demand quickly outstrips supply. This will present opportunities for Skyjack and Haulotte, not to mention Snorkel or Aichi, to gain share from Genie and JLG.

The secret will be in each company’s ability and willingness to ramp up, how well it has handled its product support during the slow years, the ability of its distributor network to work with it and the strength of its brand image/customer relationships.

Skyjack scores high on most of these factors, although the willingness to ramp up rapidly is an unknown given the change at the top. President Steve Shaughnessy does though have the benefit that past president Ken McDougall is a senior manager at Linamar and fully understands the aerial lift market.