Scott profits hit by dollar

Dunedin-based Scott Technology has flagged shrinking profit margins to its shareholders as the ongoing strength of the New Zealand dollar takes its toll on exporting manufacturers.

In a trading update to shareholders on the stock exchange yesterday, chief executive Chris Hopkins said revenues remained solid and the order book was at good levels, but the company would continue to review operations because of the short-term currency impacts on profit margins.

When contacted, Mr Hopkins said the kiwi had appreciated almost 25% against its Australian counterpart in recent months, from A75c to A93c.

In order to mitigate pressure on profit margins, Scott would continue to use forward hedging contracts, and also look at using the strong kiwi to buy components overseas, keep reviewing its in-house costs and continue to build up its leasing options.

He said there was increasing interest in leasing, which Scott first offered about six months ago. Both the mining and meat sectors were interested in leasing equipment, as opposed to outright purchase.

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