Scales to pay bigger dividend after raising annual earnings guidance
Scales Corp [NZX: SCL], the country's biggest apple exporter, will pay a bigger dividend to shareholders after again raising annual earnings guidance as a record apple crop drove its horticulture unit but said it wasn't likely to be repeated in 2016.
Earnings before interest, tax, depreciation and amortisation are expected to be between $60 million and $63 million in calendar 2015, up from $39.8 million a year earlier, and beating the $41.2 million forecast in the company's prospectus, it said in a statement. Underlying net profit is expected to be between $34.7 million and $36.8 million, compared to the prospectus forecast of $20.8 million.
The improved guidance follows an earnings upgrade in August, when Scales said it anticipated ebitda to rise by 25-35%, implying earnings of between $51.5 million and $55.6 million.
The board intends to lift the dividend to 6.5c per share, and pay a special dividend of 4c, it said.
"This is an extremely pleasing outcome and I am incredibly proud of the hard work and dedicated effort of the entire Scales team," managing director Andy Borland said. "As the year progressed we have continued to benefit from our strong brand positioning in the markets we operate in, as well as improvements in FX (foreign exchange) rates and better than usual shipping rates."
Scales expects to cut net debt to between $33 million and $36 million by year's end, from an average net debt of $40.8 million in 2014.
Still, Scales doesn't expect to repeat the jump in earnings in 2016, with a more ordinary harvest likely for the next year, an absence of insurance proceeds from a hail storm that influenced the current year, and provisions for reduced use across its coldstore network. The company expects 2016 ebitda to be between $48 million and $55 million.
Chairman Jon Mayson said the 2016 earnings guidance is still an improvement of 16 percent to 33 percent on the 2015 prospectus forecast.
The shares last traded at $2.28, and have jumped 59% this year.