Scott Tech boosts FY profit 22%, shares hit 7-year high
BUSINESSDESK: Scott Technology, the Dunedin-based industrial automation firm, lifted annual profit 22% as sales of its mining equipment gathered pace, pushing its shares to a seven-year high.
Net profit advanced to $6.1 million, or 16.7 cents per share, in the 12 months ended August 31, from $5 million, or 16.6 cents per share, a year earlier, the company says. Sales rose 19% to $63.8 million, with mining equipment making up about 53% of its revenue.
The shares climbed 1.8% to $2.28, the highest level since September 2005, and have surged 45% this year.
"The mining sector has been particularly strong during the past year and has been a good contributor toward revenue and profit growth," chairman Stuart McLauchlan and chief executive Chris Hopkins say.
"With current high levels of demand, we have redirected resources into this market to capitalise on the opportunities."
Scott Technology's board declared a final dividend of 5.5 cents per share, taking the annual payout to 8 cents, or $3.3 million. That is more than the 7 cents total dividend in 2011.
The company has been looking for acquisitions in the past year after building a solid balance sheet, and last month began due diligence on taking a stake in Western Australian conveyer belt maker Integrated Conveyer Systems.
"Many opportunities exist for business growth, both from existing internal initiatives and through possible external acquisitions and partnering," Messrs McLauchlan and Hopkins say.
"Scott has evaluated many opportunities over the past year and has already commenced with several that fit our skills and capabilities, where we can add value to our customers and which offer potential for growing our shareholders' investment in the company."
The manufacturer generates about 86% of its sales outside New Zealand and lifted North American and Mexican revenue 55% to $24.3 million. Australia and the Pacific Islands was its second-biggest sales destination at $12.5 million, down from $13.1 million in 2011.