Scott Technology Limited Analysis

Overview

The shares were listed in July 1997 following an "in specie" share distribution to shareholders of formerly listed Donaghys. It is a high technology engineering company, which specialises in the design and build of automated lines for the international appliance industry.

Virtually all sales are from exports, with principal markets in the USA, Central and South America, Europe, and Australia, with recent successes also in China, Mexico and Canada. Recent developments have been an alliance with high technology engineering group Modular Automation of the UK (1999), which strengthens the company's marketing and after sales services in Europe, formation of Dunedin-based Scott Automation (2001) to focus on local non-appliance industries, a partnership with KUKU Robotics of Germany (2001), which was designed to assist with developing applications of automation for industry outside of appliances, and acquisition of CBS Engineering Ltd, an Auckland based automation and materials handling company (2002).

In 2003 the company established a representative office in Shanghai. In 2006 it sold its Auckland division, Package Handling Systems.

SCT announced on 26 May 2008 that it had completed the acquisition of Auckland based manufacturer, Rocklabs Ltd. The remaining conditions of sale are expected to be satisfied in June. Rocklabs makes mechanised and automated sample preparation equipment and supplies gold reference materials to the mining industry.

Performance

The following information was extracted from Scott Technology Limited's full year results, released on 17 October 2024:

• Scott’s commitment to the "Engineering Scott to High Performance" strategy has driven sustainable growth, sector leadership, and resilience, leading to its extension through 2027.
• Group revenue up 3% to $276m, margins remain steady at 27%. Strong performances in MHL and minerals have been offset by softer volumes in protein.
• Operating EBITDA has remained stable at $30.2m, in-line with FY23.
• Net profit after tax was down 50% to $7.7m due to one-off strategic costs, higher lease and financing costs and change in tax legislation relating to building depreciation.
• Sales and services in Scott’s three core sectors delivered 85% (+6ps) of group revenue.
• Forward work of $160m remains positive, comprising of MHL, minerals, protein orders and service orders.
• Final dividend of 3.0 cents per share declared to take full year total to 8.0 cents per share.

Automation and robotics solutions provider, Scott Technology Limited (NZX: SCT), has today released its results for the year ended 31 August 2024 (FY24).

Scott’s commitment to its "Engineering Scott to High Performance 2020-2025" strategy, which has driven sustainable growth and leadership across core sectors, has resulted in the extension of the strategy through 2027. The strategy has continued to underpin the businesses’ focus and investment in the growth of its three core sectors delivering revenue growth of 3% to $276m and stable operating EBITDA of $30.2m despite the challenging macroeconomic landscape.

The business’ sales pipeline remains positive and on strategy, with $160m in forward work comprising of MHL projects, continued strong minerals and protein product orders, as well as significant progress in secured service contracts which has been a strategic focus during the year.

Scott Technology's Interim CEO, Aaron Vanwalleghem, expressed satisfaction with the company's steady progress. "Despite the challenging macroeconomic environment, marked by inflation, rising interest rates, and evolving market demands, Scott has demonstrated measured growth. Our MHL and Minerals sectors have achieved solid results, along with our service and aftermarket business. To build on this momentum, we have made targeted investments to upscale our facilities and strengthen our market presence, particularly in North America. This strategic approach positions us to expand in priority markets, seize new opportunities through market diversification, and fully capitalise on existing prospects.”