Scott Technology annual profit falls 41% as strong Kiwi, competition erodes margins
Scott Technology [NZX: SCT], the industrial automation firm, reported a 41 percent drop in annual earnings as a strong kiwi dollar and stiff competition eroded margins across all of its sectors.
Net profit fell to $3 million, or 6.2 cents per share, in the 12 months ended Aug. 31, from $5.1 million, or 13.6 cents, a year earlier, the Dunedin-based company said in a statement. Revenue was largely flat at $60.3 million.
"The company responded well to the impact of the major slowdown in our mining sector markets and has shown a steady recovery within the second half of the year, producing a profit more than double the profit produced in the first half," the company said. "Competitive pressures, along with the high value of the New Zealand dollar, have put pressure on our manufacturing margins across all market sectors."
Scott made two acquisitions this year, buying Melbourne-based Applied Sorting Technologies (AST) for $1.3 million and Ohio-based RobotWorx for up to US$7.7 million in cash and shares. It said the two purchases contributed well, and helped expand Scott's presence in North America and Australia.
The board declared a final dividend of 5.5 cents per share, payable on Dec. 9, and taking the annual return to shareholders to 8 cents.
Shares of Scott rose 1.4 percent to $1.48.
Scott said demand for automation and robotics is expected to grow, and that it's committed to widening margins and growing revenue.
"Diversification through taking our technologies and skill into new markets will continue to underpin this growth," it said.
Scott's standard equipment unit reported a 23 percent drop in revenue to $21.2 million, while segment profit more than halved to $3.64 million. Its automated equipment unit boosted sales 21 percent to $39.1 million, while segment profit jumped 51 percent to $5.34 million.