Scott Technology boosts FY profit 22%; shares rise to 7-year high
Scott Technology, the Dunedin-based industrial automation firm, lifted annual profit 22 percent as sales of its mining equipment gathered pace, pushing its shares to a seven-year high.
Net profit advanced to $6.1 million, or 16.7 cents per share, in the 12 months ended Aug. 31, from $5 million, or 16.6 cents per share, a year earlier, the company said in a statement. Sales rose 19 percent to $63.8 million, with mining equipment making up about 53 percent of its revenue.
The shares climbed 1.8 percent to $2.28, the highest level since September 2005, and have surged 45 percent this year.
"The mining sector has been particularly strong during the past year and has been a good contributor toward revenue and profit growth," chairman Stuart McLauchlan and chief executive Chris Hopkins said. "With current high levels of demand, we have redirected resources into this market to capitalise on the opportunities."
Scott Technology's board declared a final dividend of 5.5 cents per share, taking the annual payout to 8 cents, or $3.3 million. That's more than the 7 cents total dividend in 2011.
The company has been on the look-out for acquisitions in the past year after building a solid balance sheet, and last month began due diligence on taking a stake in Western Australian conveyer belt maker Integrated Conveyer Systems.
"Many opportunities exist for business growth, both from existing internal initiatives and through possible external acquisitions and partnering," McLauchlan and Hopkins said.
"Scott has evaluated many opportunities over the past year and has already commenced with several that fit our skills and capabilities, where we can add value to our customers and which offer potential for growing our shareholders' investment in the company," they said.
The manufacturer generates about 86 percent of its sales outside New Zealand, and lifted North American and Mexican revenue 55 percent to $24.3 million. Australia and the Pacific Islands was its second-biggest sales destination at $12.5 million, down from $13.1 million in 2011.
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