Scott Tech profit up; US push begins

Scott Technology chief executive Chris Hopkins. Photo by Gregor Richardson.
Scott Technology chief executive Chris Hopkins. Photo by Gregor Richardson.
Dunedin-based Scott Technology has reported a 40% improved profit to $1.14 million, and is to launch an unspecified capital raising in coming months.

Scott is making a concerted push into the United States market, underpinned by recent acquisitions, which should boost revenues, and expanding China operations.

Scott Technology chief executive Chris Hopkins said all its product lines were successfully managing the high New Zealand dollar and economic cycles affecting customers, particularly in the mining and appliance manufacturing sectors.

Scott shares were down slightly, at $1.38, following the announcement.

Scott develops and makes robotic applications in Dunedin and manufacturers' appliance assembly lines in Christchurch, and also has multiple niche market devices, including for the resource sector.

Scott had noted a ''significant increase'' in inquiry levels for automation and robotics across numerous industries and geographies.

''Around the world there is a significant trend towards automation and robotics. This is in addition to the renewed emphasis on manufacturing in our key North American market,'' Mr Hopkins said in his report.

Craigs Investment Partners broker, Peter McIntyre, said the headline result was ''positive'', having been driven by demand, including more input from its robotics developments.

He highlighted revenue was up by $3.8 million and cashflow was positive, but acquisitions had seen liabilities increase from $18.28 million to $40 million.

''[However] they're not just going to sit tight, but will carry on developing robotics further,'' Mr McIntyre said, of expansion plans into the US and China.

Mr Hopkins said following the recently completed $13.2 million purchase of Australian company Machinery Automation and Robotics Ltd (MAR), some management and engineers had relocated to Ohio, to help drive growth.

''Technologies acquired as part of MAR are applicable to the North American market and we have seen early uptake and strong demand,'' he said.

The acquisitions of MAR ($13.2 million) and RobotWorx, in Ohio, ($6.23 million) were ''primarily debt-funded'' and Scott planned to raise capital ''in the coming months'' to be used to pay off bank debt, he said.

Scott products were not only sought after in times of increased production, but also when customers' focus shifted to periods of cost control and performance improvement, he noted.

China's management team had been strengthened with relocated New Zealand engineers, and is at present moving the business to larger premises in Qingdao.

A much anticipated robotic milking system being developed by Scott was undergoing full production trials, and was expected to go to wider trials in the 2015-16 season, followed by commercialisation, Mr Hopkins said.

Add a Comment