Scott result affected by slowdown

Scott Technology, on Kaikorai Valley Road in Dunedin. Photo by ODT.
Scott Technology, on Kaikorai Valley Road in Dunedin. Photo by ODT.
Dunedin's listed Scott Technology has booked a flat year's trading revenue and 40% decline in after-tax profit, down from $5.14 million to $3.02 million, for its trading year to August.

Revenue for the year was up slightly, from $60 million to $60.3 million and earnings before interest and tax were down from $7.14 million to $4.23 million.

Scott historically manufactured assembly line systems for international sale, but in recent years has diversified into robotic meat machinery, niche-market machinery for the mining sector, specialist motors and is venturing into the domestic dairy sector, with auto-milking machines.

Robotic milking had successful pre-production running trials during the past dairy season and has advanced to production trials.

Full commercial installations are being targeted next year.

Most Scott products are sold globally and the strength of the New Zealand dollar against its US counterpart has been a major problem for Scott in recent years.

Following the full-year announcement, lodged just before the close of market yesterday, Scott shares closed up 2c, at $1.48.

The shares hit a year high of $2.30 a year ago, but had since February this year traded between $1.47 and $1.80.

Scott will pay a fully imputed, total dividend of 8c for the year.

Chief executive Chris Hopkins said the company responded well to the impact of a major slowdown in the mining sector markets and delivered a steady recovery during the second half of the year.

Second-half profit was more than double that of the first half.

''The markets we operate in have been highly volatile over the year,'' Mr Hopkins said.

He said Scott's customers, operating in the mining sector, had ''dramatically reduced expenditure'' on capital equipment in response to a fall in the price of their respective traded commodities, minerals and precious metals.

''Conversely, Scott customers who operate in the meat processing and the appliance sectors have increased their capital expenditure to achieve yield and productivity gains in a market that has more attractive prices, but still remains highly competitive,'' Mr Hopkins said.

He said additional debt - $6.25 million of an overdraft facility - was incurred during the year, after Scott purchased the Auckland properties of its business unit, Rocklabs, plus the outlay for the two businesses it acquired, costing a total $9 million, in cash and shares.

He was confident the company was was ''well positioned'' to take advantage of the increased demand for its technology and services, which was evident in global economies.

''Diversification through taking our technologies and skill into new markets or new applications will continue to underpin this growth,'' Mr Hopkins said.

During the past year total research and development expenditure was more than $3 million, having received '' very good assistance'' from both New Zealand and Australian government agencies, Mr Hopkins said.

simon.hartley@odt.co.nz

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