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Scott Technologies unveils best result in seven years

Friday 8th October 2010

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Scott Technologies has reported its best earnings performance since the 2002/03 financial year, although net profit was $1.1 million lower than it would have been without the one-off impact of tax changes in the May Budget.

The Dunedin-based automated and robotic machinery maker, which sells globally to the meat processing and mineral assessment industries, reported net profit after tax of $2.8 million, and net “underlying earnings” of $3.9 million prior to the non-cash impact of building depreciation tax rule changes.

That result compared with a net $400,000 profit the previous year, and a loss of $818,000 in 2007/08. Higher earnings, prior to one-offs, have not been achieved since 2002/03, when NZX-listed Scott declared a $5.6 million net profit.

Turnover topped $46.6 million, compared with $31.3 million in the previous year, as Scott suffered heavily from plunging orders during the global financial crisis.

Directors declared a fully imputed dividend of 4 cents per share, payable December 3.  This would take distributions per share for the year to 5.25 cents. Combined with a 1:10 non-taxable bonus issue during the year, shareholders were experiencing a 425% lift in earnings per share this year.

A dividend reinvestment plan is also contemplated, with this year’s final dividend eligible.  The share price in the thinly traded stock was unchanged at $1.25 in trading this afternoon.

“Operating cash flow of $4.5 million has enabled the company to reduce debt, purchase additional capital equipment and pay dividends,” said chairman Stuart McLauchlan in a statement to the NZX.

“Each of our markets responded differently to the global economic crisis and this required us to be selective in our focus. Benefits of the company’s diversification are now being realised and opportunities continue to arise in all our target markets.”

The company continued to strive for its goal “to be the global innovator in automation” and had spent $7 million last year on research and development.

No earnings guidance was given for the current year. The company was confident of making “further progress” and “taking advantage of growth opportunities that exist”.

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