NZX listed Scott Technology has beaten predictions and booked a more than $3 million after-tax profit on the back of higher margins gained from increased export sales.
Expansion and acquisition are also on the cards for the production line manufacturer and meat industry robotics company which remains debt-free,
with $3.7 million cash at hand and boosted by a $3.5 million Government research and development grant over three years.
In its annual financial accounts, for the year ended in August, Scott showed an after-tax profit of $3.04 million, compared with $392,000 for the same period last year.
Scott shares rose 16 per cent, or 31c, to close at $2.15 yesterday.
"We were hampered last year by competition, costs and also [US] currency movements," said managing director Chris Hopkins. "There is now a decreasing dependence on the US dollar."
ABN Amro Craigs broker Peter McIntyre said it was a good result. He had expected a greater impact from negative currency and low margin issues, and had predicted a $2.4 million after-tax profit.
"The timing of the contracts, currency and [higher] margins have all worked well."
They could now look at making some acquisitions, McIntyre said.
Hopkins said the company was looking at expanding its robotic meat processing, which was generating less cash flow than the research and development being spent.
He said interest had been expressed by Australian, European and US companies in the robotics, a joint venture with meat producer PPCS.
"There's been a lot of inquiries. The challenge is turning those inquiries into orders."
Also on the agenda is the potential for Scott to make acquisitions of high-end engineering companies in the meat industry, either in New Zealand or overseas.
McIntyre said with its "lazy balance sheet" and good cashflow there was plenty of scope for an acquisition which would be positive for shareholders and its share price.
A dividend of 6c was declared, raising the total to 9c a share for the year - triple last year's 3c total dividend.
- Otago Daily Times
