Scott Technology lifts 2016 pre-tax profit 36%
Scott Technology has reported a record $11 million in full-year pre-tax profits as the industrial robotics firm benefits from rising interest globally in automation as companies seek to reduce costs and boost productivity.
The Dunedin-based company reported a 36% increase in pre-tax profit for the year ended August 31 while total revenue rose by 55% to $112 million. The board declared a 5.5c per share dividend for the year, taking total dividends to 9.5c a share fully imputed.
The company said it significantly increased output from its New Zealand and Australian manufacturing bases following demand from a range of industries, with revenue from Australia rising to $38 million from $19.4 million the previous year and New Zealand lifting sales by $10 million to $17.5 million.
It operates in five industries: appliances, meat processing, mining, high-temperature superconductor products, and other industrial automation including robotics. The largest revenue increases by sector came from meat processing, up 256% to $38.8 million, and appliances up 48% to $20.1 million.
The result includes a full year's contribution from its expanded Australian operations and four months of trading from Scott Germany following the $880,000 acquisition of German engineering firm, Somako Hirsh & Attig Gmbh, which it had competed with in the appliance manufacturing area.
Scott completed a scheme of arrangement in April which raked in $41 million of new capital after Brazilian meat processor JBS took a 50.1% majority stake, some existing shareholders sold down, and others took up their entitlements under the associated rights issue. At balance date the company had $34 million of cash in the bank, no debt, and total shareholder funds of $94.6 million.
The company said this year's growth was assisted by commercial uptake of its own developed technologies and it remains committed to investment in research and development. It gained $2.17 million in government R&D grants this financial year.
Scott's share of the net surplus from Robotics Technologies, its joint venture with Silver Fern Farms to market and develop lamb meat processing equipment, was $264,000 while it gained $14,000 as its share of NS Solutions, a joint venture with Australian-based Northern Cooperative Meat Company.
Three of its joint ventures, including Scott Separation Technology which is developing patented centrifuge technology for use in the honey and fish processing industries, delivered small losses.
Directors said Scott has strong forward work across all sectors and they were "confident that the business is well-positioned," with the commercialisation of its technologies continuing to underpin organic growth. Further acquisitions to accelerate growth are being evaluated.
They said the dividend reinvestment plan suspended in late 2015 won't be reinstated until further notice given the company's substantial cash holdings.
The share price is trading unchanged today at $2.10, having risen 53% this year.