Acquisitions boost Scott Tech operating earnings

Thursday 25th October 2018

Scott Technology reported a 12 percent jump in annual operating earnings after completing acquisitions in the US and Europe earlier this year.

Earnings before interest, tax, depreciation and amortisation climbed to $19.3 million in the year ended Aug. 31, up from $17.3 million a year earlier.

Revenue jumped 37 percent to $181.8 million, with about two-thirds of the increase due to the firm’s purchase of the Belgian industrial automation specialist Alvey Group in April and North Carolina-based automated guided vehicle manufacturer Transbotics in June.

“Sales into our traditional markets of the appliances, meat processing and mining sectors all achieved double-digit growth, with the appliance sector being the stand out performer with a 56 percent increase from the prior year,” the company said in a statement to NZX. “This reflects several large projects successfully sold, worked on and completed collaboratively across the company’s New Zealand, German and Chinese operations.”

Net profit fell about 7 percent to $8.96 million, largely due to a $1.5 million loss on currency translations of foreign operations.

Scott shares were unchanged at $2.90 in a generally weaker market. The stock is down about 18 percent this year.

Dunedin-based Scott Technology has more than 700 staff worldwide. In 2017 it got more than a third of its sales in Australia, with its next largest markets being the US at 27 percent and China at 12 percent.

It is half owned by Brazilian meat processor JBS.

The latest accounts show Australia and New Zealand accounted for about $100.5 million of Scott’s group revenue and $19 million of the company’s pre-tax segment earnings of $24.2 million.

With the latest acquisitions complete, Scott said its focus is firmly on integrating the businesses acquired, and driving synergies and operational benefits across the combined business.

It is continuing to invest in research and will develop new applications across all key industries it now serves. It has also commenced “significant projects” aimed at transferring its technology and capability from lamb deboning to other species, such as beef, pork and poultry.

“The larger Scott Group is now well positioned to deliver significant growth supported and driven by our strategy.”

The company will pay a 6 cent final dividend on Nov. 27, unchanged from a year earlier.

(BusinessDesk)

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