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Scales signals earnings growth from reshaped business

Monday 20th May 2019

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Scales Corp says full-year operating earnings from its reshaped business may rise as much as 13 percent.

The agri-business, which last year sold its cold stores and liquid storage operation to expand its petfood interests, expects underlying net profit of $32-37 million for the year ending December 31. It reported $35.8 million for the 2018 year.

Scales says the estimate is before the deduction of non-controlling interests in subsidiaries. In 2018, Scales owned 73 percent of Hawke’s Bay apple marketer Fern Ridge Fresh.

This year it will cover Fern Ridge and US petfood maker Shelby Foods. Scales paid US$23.2 million for 60 percent of Shelby in December.

Scales’ Mr Apple business is the country’s biggest grower and marketer of apples. Its Meateor Foods business provides ingredients for petfood, while Profruit markets apple and kiwifruit juice concentrates.

Allowing for businesses exited the past year, Christchurch-based Scales says the guidance implies underlying earnings before interest, tax, depreciation and amortisation of $49-$55 million from operations, compared to $48.5 million in 2018 on a like-for-like basis. It reported earnings before interest, tax, depreciation and amortisation of $67.1 million last year.

Scales noted the result will also include 4 percent interest income on the $151.4 million sale of its Polarcold business between the sale last May and settlement last week.

Its shares last traded at $5.12 and have gained about 14 percent this year.

The company says it will pay a final 9.5 cent-a-share dividend on July 5 to shareholders registered on June 26. That matches the first-half dividend and is up from the 9-cent final dividend paid last year.

(BusinessDesk)

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