Scott Technology FY profit falls 16 percent as strong kiwi erodes margins; pays special centenary dividend
Scott Technology [NZX: SCT], the industrial automation firm, reported a 16 percent fall in annual profit as the strong currency eroded margins for the exporter, while declaring a special dividend marking its 100th year in operation.
Net profit fell to $5.14 million, or 13.6 cents per share, in the 12 months ended Aug. 31 from $6.11 million, or 16.7 cents, a year earlier, the Dunedin-based company said in a statement. Sales fell 5.9 percent to $60 million, as a strong New Zealand dollar ate into export returns and amid a slowing mining sector.
"With a competitive environment for most of our products, combined with the higher value of the New Zealand dollar, maintaining our target margins has been challenging," the company said. "We have responded by seeking ways to provide enhanced value to our customers through our solutions and by promoting and leveraging our technology in areas where we lead the world."
Last week the company spent $3.2 million buying properties leased by its Rocklabs division, with scope to redevelop the land and improve efficiency for the Rocklabs manufacturing unit.
The company's board declared a final dividend of 5.5 cents per share payable on Dec. 3. It also declared a special dividend of 2 cents to mark its 100th year, taking the total return to 10 cents for the year.
The shares rose 2.2 percent to $2.30, and have shed 11 percent this year.
Scott burned through $4.7 million in cash in the year, with an operational outflow of $1.9 million compared to a cash surplus $5.4 million. It held $1.3 million in cash and equivalents as at Aug. 31.
The company's standard equipment unit reported a 19 percent slide in sales to $27.7 million, and a 38 percent drop in segment profit to $7.7 million. Its automated equipment unit lifted sales 9.6 percent to $32.3 million, with segment profit surging to $3.5 million from $593,000 a year earlier.