SCT - Scott Tech

[Snoopy]

GENERAL: SCT: Securing an order from a major appliance manufacturer

2 May 2008

Scott Technology Limited are pleased to announce it has secured key contracts for the supply of equipment into the international market. These contracts have been gained despite the difficult trading environment that was indicated at both the Annual Meeting in December and in the interim announcement in
April.

Scott has secured an order from a major appliance manufacturer in Brazil worth several million dollars. It is expected that the manufacturing line will be completed and shipped at the end of 2008 and installed in early 2009.

In addition, Scott has secured an order for its meat processing side of the business to supply multiple beef de-boning products to a customer in Australia.

---------

these two contracts may have been secured at minimal profit or even a small loss.

Significant news from SCT today. They are to become suppliers to the mining industry!

26/05/2008
TAKEOVER

REL: 1328 HRS Scott Technology Limited

TAKEOVER: SCT: ACQUISITION OF ROCKLABS

The Directors of Scott Technology Limited are pleased to announce that they have completed satisfactory due diligence for the acquisition of the business of Auckland based manufacturer, Rocklabs Limited. The remaining outstanding
conditions of sale are expected to be satisfied during the month of June.

Rocklabs are manufacturers of mechanised and automated sample preparation equipment and suppliers of gold reference materials to the mining industry. Manufactured products include rock crushers, ring mills, sample dividers and integrated systems. Rocklabs are based in Onehunga, Auckland and employ 35 staff, plus it has a network of nearly 30 sales agents worldwide. Rocklabs exports virtually all of its production and has customers in 98 countries.

Both Scott Technology and Rocklabs have a strong focus on product quality which is one of the factors that attracted Scott Technology to Rocklabs. While Rocklabs supply the mining industry which has not traditionally been the domain of Scott Technology, both companies share a common core business of engineering and automation.

Part of Rocklabs' business strategy is to move towards greater automation of their products and systems. This is an area in which Scott Technology can provide enhanced design and technical expertise.

The current owner of Rocklabs, Dr Ian Devereux, will remain with Rocklabs in a management and technical role while Scott Technology intend operating Rocklabs as a standalone subsidiary with few changes to its current operating structure.

The consideration for the purchase will be a mixture of cash and shares in Scott Technology and the transaction will be earnings positive for the Scott Group.

---------

I'm disappointed we do not know how much cash or how many shares are going to be issued to acquire Rocklabs. Perhaps adding the rider that:

"the transaction will be earnings positive for the Scott group."

means that management have decided that they don't need to tell us. I would turn that around.

Even given I know nothing about 'Rocklabs' I'm picking that the previous owner Devereux is making good profits now and will not be selling out cheaply. If buying into Rocklabs is 'earnings positive' from day one, that must mean that the current profitability on the rest of the SCT business, production line design build and installing and the meat processing robots, is minimal! Oh dear, it is hard to see the SCT share price reacting positively to this announcement.

SNOOPY

discl: hold SCT