Friday 9th May 2003
|Text too small?|
Sales at the maker of automated production machinery lifted from $21.7 million in the (14-month) 1997 year to $29.2 million last year after reaching a peak of $30.7 million in 2000.
But net earnings haven't kept pace. Last year's $2.4 million was only a touch higher than the annualised 1997 profit.
What's more, the company has been very vulnerable to economic trends. In 2001 a heavy slowdown in capital expenditure by firms worldwide halved Scott's revenue and cut earnings to just $415,000.
The shares' recent climb to record highs probably reflects robust half-year earnings at $2.5 million, more than the company usually makes in a full year and a bulging order book.
Signs US capex is recovering may be helping. Economists are forecasting 5% growth in 2003, compared with an expected 5% shrinkage last year.
Investors may also be backing Scott's recent expansion into robotics, which promises to help it diversify away from reliance on making machines that make appliances into the food, beverages, and packaging industries and further afield.
Scott has no debt and plenty of cash on hand, a sensible position for a firm whose revenues come from lumpy contract flows.
The company is not run by hotheads CEO Kevin Kilpatrick, an engineer, has worked there for 35 years but seems to have plenty of fresh ideas.
No comments yet
Transpower sees no risk to credit metrics from incentive change
NZ dollar rises, an outlier amid rising Gulf tensions
Craigmore spends $32M to expand Kerikeri kiwifruit crop by 'more than a third'
CentrePort eyes further hub expansion
South Port beats guidance, earnings in line with 2018 record
Plexure sees revenue growth from White Castle deal
22nd July 2019 Morning Report
NZ dollar treading water as markets focus on Iran
MARKET CLOSE: NZ shares extend gain as passive funds bolster prices; Tourism Holdings climbs
NZ dollar headed for 1.3% weekly gain on expectations of a Fed rate cut