Improved returns for Scott

Chris Hopkins. Photo: Gregor Richardson
Chris Hopkins. Photo: Gregor Richardson
Dunedin manufacturer Scott Technology reported a much improved before-tax profit and rewarded its patient shareholders with an interim dividend of 4c per share, up 1.5cps.

The company reported a profit before tax of $2.8million for the six months ended February 29, an increase of 75% on the $1.6million recorded in the previous corresponding period.

Reported revenue for the period under review was $42.8million, an increase of 46% on the $29.3million reported in the pcp.

Managing director Chris Hopkins said the company's diversification strategy, combined with strong growth from recently developed products achieving market acceptance, had provided impetus to the trading results.

Around the world there was a significant trend towards automation and robotics, in addition to the renewed emphasis on manufacturing in the company's key North American market.

Scott, with a larger skill base and business locations within its key markets, was now well positioned to take advantage of those trends, he said.

At balance date, Scott had $7.3million of cash in the bank and reported a strong operating cash inflow of $9.9million in the six months.

Operating performance across the group continued in line with the increase in sales.

The first half of the year produced an operating profit to sales ratio of 9.4 compared to 9% in the pcp, Mr Hopkins said.

A lower dollar and an uplift in projects for the meat processing sector helped boost the company's Australasian sales more than 70% from the pcp.

The company continued to receive increasing levels of inquiries for automation and robotics across a wide range of industries and geographies, driven by the increase in global interest in the need to boost productivity and to reduce costs, he said.

"Scott's order intake and forward work is at a record high and this is in part due to the expanded operations. It is also part of the usual fluctuations the company experiences as a result of providing large-scale capital works.''

Robot sales through the United States division RobotWorx had been strong and the company was starting to see the wider benefits to the group of a local presence in the US market.

Sales to the mining sector remained at similar levels to 2015 and the recent move of its Auckland manufacturing to one consolidated site would mean improved growth and performance, Mr Hopkins said.

Looking ahead, chairman Stuart McLauchlan said the company continued to develop and implement its strategic intent.

The global conditions for automation and robotics continue to improve and the signals for future growth and demand had never been stronger.

The directors believed a strong presence within the key markets in which Scott operated was important to providing the service levels needed to compete and to provide future growth opportunity.

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