Strong result for Scott Technology

John Kippenberger. Photo: Supplied
John Kippenberger. Photo: Supplied
Scott Technology has notched up another strong full-year financial result and already has a record $190 million in forward orders.

The automation and robotics solutions provider announced its results yesterday for the year ended August 31, which showed an 8% increase in revenue to $222 million and a 14% increase in ebitda to $24 million.

Net profit after tax was up 51% at $12.7 million and reported net profit after tax was $0.1 million as it captured $12.6 million of non-cash write-offs from the discontinued United States-based Robotworx operation, a statement to the NZX said.

Margins grew to 24% despite inflationary and supply chain pressures, while directors declared an unimputed dividend of 4c per share, payable on November 22, to take the full-year dividend to 8c.

Operating cash flow of $6.3 million was lower than the previous comparative period of $13.4 million, as the company’s revenue growth and global supply chain pressures increased debtors and inventory respectively, the company said.

With global pressures easing, a programme was under way to return safety inventory back to cash. The group had cash in the bank of $3.9 million on August 31, while its net debt position was $8 million as funding was invested in growth and working capital.

Chief executive John Kippenberger praised the "team effort" across the Scott group amid what had been a challenging environment with external pressures including supply chain challenges and inflation.

Through a focus on its Scott 2025 strategy and sticking to what it was good at, the team had done a "really good job" and he was pleased with the outcome, he said.

Good growth had continued in its three core sectors — meat (which is based in Dunedin), materials handling and logistics (MHL) and mining — and he was delighted with the figure for forward orders.

"I think that’s real testimony to our strategy of playing to our strengths."

Demand continued to be driven by labour supply dynamics, Mr Kippenberger said.

There was an ongoing appetite for automation in the meat industry and, in the global mining sector, he saw new minerals adding to the drive for mining equipment.

Even with the global situation — and it was not a straightforward environment to operate in — he believed 2022 was the first real year where the "true power of Scott 2025" was starting to be shown. Scott was signing big contracts with the world’s largest food and mining companies, he said.

The supply chain was still very disrupted in terms of sourcing supplies of parts, computer chips and boards and control systems and he expected that would continue well through 2023.

To combat that, it was about managing inventories, making sure there was an inventory of spare parts and putting more working capital into that inventory, Mr Kippenberger said.

Asked about Scott’s labour situation, Mr Kippenberger said the company was always looking for good-quality talent in most of its markets. The most challenging market in the past 12 months had been Australia, where there was quite a tightness in the labour supply market for engineers, while the United States had also got tighter but was starting to get slightly better.

He was delighted to be able to travel around the world again, as he was a great believer in big deals requiring discussion and meetings around the table, he said. It was also good to see Scott teams in markets that had been through a lot.

Another highlight had been the measurement and verification of carbon emissions across 70% of the business and he was inspired by the work that was going into "looking for opportunities to do better things for the world around us".