Scott Technology Limited (NZX: SCT) 2021 Half Year Announcement

Thursday 8th April 2021

Automation and robotics solutions provider, Scott Technology Limited, has today released its unaudited interim results for the six months to 28 February 2021 (H1 F21). The results reflect the positive momentum being gained as the Scott 2025 strategy takes hold and as most regions commence the recovery from COVID-19. This has seen forward work programs in Europe, USA, China and Australasia grow firmly from this time a year ago as new system design and build contracts have been awarded at a steady and focused pace over recent months.

The product and service businesses of Scott are continuing to show strong recovery and positive margin performances. The mining products and parts business - Rocklabs - together with the BladeStop product revenues into the meat industry are showing strong growth on prior year. Service revenues across several key markets are also growing as the team places increasing importance on executing up-front service level agreements with key customers.

These revenue streams are all supported by the streamlined operating cost structure now in place following last year’s restructuring activity across all regions and Group head office. This is seeing an increase in margins.

The focus on employee health and safety across the Group is reflected in a large increase in reported near-misses – seen as a forward-looking indicator as avoids potential future risk – while the ‘lag’ indicators of lost time injuries fell to zero at the half year. This is great progress and a result of the deep and sincere commitment from employees across the Scott Group.

Results overview

H1 F21 revenue of $104.5m was 5% higher than the prior comparative period (pcp) as Scott’s strategy of more revenue from proven systems, product and service delivers revenue growth.

EBITDA of $11.2m recovered to exceed the pre-COVID performance of $10.4m from the first half of FY19.

Improved revenue as well as a significant right sizing program delivered a 28% improvement in Gross Margins to 23%. The right sizing program also contributed significantly to the growth in EBITDA, with overhead cost reduction falling $4.1m, a drop of 25% versus H1 F20.

Net profit after tax (NPAT) was $4.7m for the six months, significantly ahead of pcp which included the costs associated with the right sizing programme in 2020.

Operating Cash Flow of $5.3m was $4.4m ahead of H1 F20. The Group had cash in the bank of $6.2m as at 28 February 2021.

Net Debt of $2.9m remained stable relative to the FY20 year-end position ($3.4m). An upgraded bank facility has recently been agreed with Scott’s existing provider to support further growth and working capital requirements.

In recognition of the progress made by the Company, the Directors are pleased to declare an interim (unimputed) dividend of 2.0 cents per share, payable on 10 May 2021. The Dividend Reinvestment Plan will apply.

Please see the links below for details:

2021 Half Year Results Announcement

2021 Half Year Investor Presentation

2021 Half Year Financial Statements

NZX Results Announcement Form

NZX Dividend Form

Source: Scott Technology Limited

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