Scott plan set to please participants

Scott Technology's dividend reinvestment plan is likely to please the shareholders who participated in it after the pricing was announced yesterday at $1.26.

If all Scott's shareholders had chosen to accept the 2c-per-share dividend on offer instead, it would amount to a $631,000 payout.

While it is not known what percentage of shareholders opted for the reinvestment plan, offered last November, the assembly line and robotics manufacturer would have to issue about 501,000 shares if there was 100% take-up - on top of the 31.5 million already on issue.

Craigs Investment Partners broker Peter McIntyre said with Scott yesterday revealing the reinvestment plan share value at $1.26, based on average weighted sale price for the week to April 18, and less the 10% discount, shareholders should be pleased.

Shares last traded on Monday at $1.40.

"Scott can effectively retain the cash for reinvestment into research and development or capital expenditure," Mr Mcintyre said.

Earlier this month, Scott paid $4.4 million for a controlling stake in a Wellington-based, crown-owned company specialising in manufacturing electromagnets using high-temperature superconductors.

As with Scott's 2008 $10 million cash and script purchase of niche-market mining sector supplier Rocklabs, the $4.4 million acquisition of HTS-110 Ltd will be both earnings and cash-flow positive, albeit modest earnings, Scott managing director Chris Hopkins said yesterday.

Late last month, Scott delivered a strong half-year result as revenues increased from $20.3 million to $21.8 million, while profit before tax was up from $1.4 million to $2.2 million; citing its diversification as key to its growth.


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