Sharechat Logo

Scott Technology lifts first-half profit 26% as demand pushes operations near capacity

Thursday 5th April 2018

Text too small?

Scott Technology boosted first-half profit 26 percent as demand for the Dunedin-based firm's automation and robotics systems saw it operating near full capacity. 


Net profit attributable to shareholders rose to $3.1 million, or 4.2 cents per share, in the six months ended Feb. 28 from $2.5 million, or 3.3 cents, a year earlier, it said in a statement. Revenue climbed 19 percent to $67.5 million, helped by international demand for its Bladestop bandsaw safety technology, and completion of the company's first system design and build in China. Earnings before interest, tax, depreciation and amortisation climbed 25 percent to $6.4 million, with operating margins widening to 9.5 percent from 9 percent a year earlier. 


"Scott Technology continues to see strong demand for our automation and robotics technology and capability," chair Stuart McLauchlan and managing director Chris Hopkins said. "A strong order intake over recent months has pushed forward work for large projects to a record high and we anticipate operating at near full capacity providing the confidence to continue to expand our capabilities in certain areas."


The company reported an operating cash outflow of $2.6 million in the half, compared to an inflow of $10.2 million a year earlier, which it said was due to "increased inventory and billings driven by growth". Inventories were at $19.2 million as at Feb. 28, up from $10.7 million a year earlier, while trade debtors totalled $20.1 million compared to $13.5 million a year earlier. 


In February, Scott Technology agreed to buy European industrial automation specialist Alvey Group for 12.1 million euros to accelerate its growth plans and broaden the Kiwi manufacturer's access to global markets. 


Scott Technology today said due diligence is completed and the sale and purchase agreement is being finalised with settlement expected this month. The company predicted the deal would immediately boost earnings. 


"With a full order book providing momentum into the second half of the 2018 year, and the contribution expected from the acquisition of Alvey, the directors are confident that building on strong foundations will deliver growth in line with our strategic intent," McLauchlan and Hopkins said. "The directors and management are confident that adding acquisition growth to organic growth will provide strong value propositions for all stakeholders."


The board declared an unchanged interim dividend of 4 cents per share, payable on April 24 with an April 17 record date. The shares rose 3.3 percent to $3.46, having fallen 5.9 percent so far this year. 



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar falls with Aussie after Westpac's RBA rate cut call
Intuit juggernaut grows QuickBooks subscribers but momentum slows
Reaction to Budget rules relaxation shows balance 'about right', says Ardern
Augusta lifts net profit six fold as investors flock into new funds
Annual exports to China top $15 billion for first time
Gentrack posts $8.7M loss on CA Plus write-down
Westpac says RBNZ capital proposals would add $6,000 p.a. to an Auckland mortgage
Cavalier says market conditions still challenging
Ryman hikes dividend as annual earnings grow on wider development margin
24th May 2019 Morning Report

IRG See IRG research reports