Scales says full-year earnings may exceed prospectus

Photo / Glenn Taylor

Scales Corp, the fruit and vegetable logistics company, will pay a 3 cent per share interim dividend and says annual earnings may beat guidance in its prospectus.

According to its June prospectus, the Christchurch-based company expects annual profit of $15.9 million in 2014 and forecast a dividend of between 9.4 cents per share and 9.6 cents per share. In announcing its interim dividend Scales said "it remains on track to meet, if not slightly exceed, its 2014 PFI forecast profit.

"Debt was also lower than included in its offer documents, according to its statement. Scales is New Zealand's largest apple exporter, and also owns businesses across the primary sector including, sea and air freight services, cold store operations, and food ingredients, including pet foods and juice concentrate businesses. Last year the company lifted profit 50 per cent to $20.4 million in calendar 2013, on the back of rising Asian demand for apples.

The company is boosting its cold store network's capacity by 16 per cent, with its new 8,700 square metre Polarcold plant at the Ports of Auckland inter-modal freight hub in South Auckland now unconditional and construction beginning.

Fonterra had already signed on to use half of the space, which is expected to be complete in the third quarter of next year.

The record date for the first-half dividend is December 9, with payment on December 19. The company will update the market on its full-year guidance before the end of the year, it said.

Shares of Scales last traded at $1.47, some 8.1 per cent below its July offer price of $1.60 per share. Of the $148 million worth of shares sold, $30 million was new capital to be used to reduce debt, while private equity firm Direct Capital sold into the offer, reducing their stake to 20 per cent from 84.2 per cent.