Thursday 21st October 2021
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Automation and robotics solutions provider, Scott Technology Limited (NZX: SCT ), has today released its audited results for the twelve months to 31 August 2021 (FY21).
The results demonstrate double digit growth in both revenue and margin, affirming the progress made with the Scott 2025 strategy, and as each of the regions reach different stages in their recovery from COVID-19. This has seen forward work programs transition in-line with the business’s core focus areas, as evidenced by today’s announcement of a NZ$20 million contract to deliver an automation solution for a US-based, leading global appliance manufacturer. This is supported by Scott’s established repeatable products business, specifically across Rocklabs, BladeStop, Meat Processing and Materials Handling. The shape of the business’s sales pipeline has similarly transitioned as the capability of its sales teams matures in-line with the strategy.
While all three of Scott’s categories have achieved significant revenue growth, it was the Products category which grew the most (30%), taking its share of total revenue to 23%, up 250 basis points. Rocklabs, Scott’s mining products and parts business, together with the BladeStop product revenues into the meat industry, both showed strong growth on the prior year.
Service revenues across several key markets have also grown, with the Group up 11%, as the team places increasing importance on executing up-front service level agreements with key customers. Growing Service is a strategic priority which is underpinned by a strong execution plan for FY22 and beyond.
The streamlined operating cost structure now in place following last year’s restructuring activity, has supported an increase in margins in each of the Scott regions.
Employee health and safety across the Group was once again a big focus for Scott, resulting in a large increase in reported near-misses. These are a forward-looking indicator and enable the business to avoid potential future risk. ‘Lag’ indicators of lost time injuries fell 63% at year end. This is great progress and a result of the deep and sincere commitment from leadership, management, and employees across the Scott Group.
Scott Technology Chief Executive Officer, John Kippenberger, says, “At Scott we are proud of our team, together with our local and global partners. Through their combined efforts, we have successfully recovered the base business operating performance from the harsh impacts of 2020, and we are positively positioned to achieve sustained, profitable growth across our key industry sectors and geographic regions for years to come.
“We will continue to progress our Scott 2025 strategy and focus our energy, talent and investment in those areas where we believe we have proven world-leading, technology, systems, and products.”
FY21 revenue of $216.2m increased 16% on the prior comparative period (pcp) as Scott’s strategy of generating more revenue from proven systems, products and service continued to deliver revenue growth.
With an EBITDA of $22.1m, the Group reached its highest ever profit, superseding its pre-COVID FY19 performance of $20.0m. This was despite lower revenue when compared to the same period, reflecting margin growth as a result of the ongoing execution of the Scott 2025 strategy.
Margins increased from 8% in FY20, to 23% in FY21, as Scott focused on expanding repeatable solutions, such as BladeStop and Rocklabs, whilst taking opportunities to increase price where their customer proposition is strong. The Group also captured the benefit from last year’s significant right sizing program, with employee numbers now sitting at 622 in FY21, down from 784 for FY19.
Net profit after tax (NPAT) for the year was $9.5m, significantly ahead of pcp and 10% higher than FY19.
Operating cash flow of $13.4m was lower than the pcp of $19.6m as the company’s revenue growth, in the form of higher trade debtors and contract work in progress, consumed a portion of the higher net profit after tax ($9.5m) earned in FY21. The Group had cash in the bank of $12.2m on 31 August 2021.
The Group net debt position moved to a net cash balance of $1.3m, despite the demands on cash of a growing top line.
In recognition of the progress made by the company, the Directors declared an (unimputed) dividend of 4.0 cents per share, payable on 22 November 2021. The Dividend Reinvestment Plan will apply.
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