SCT - Scott Tech

[Sideshow Bob]

Think it was a couple of weeks ago it was announced that Alliance had bought one of the robots. The downside with it at present is the huge decrease in lamb numbers in NZ due to dairy expansion.

[Snoopy]

Think it was a couple of weeks ago it was announced that Alliance had bought one of the robots. The downside with it at present is the huge decrease in lamb numbers in NZ due to dairy expansion.

AFAIK, the 'Robotic Technologies Ltd.' robots (SCT and Silver Fern are 50/50 partners in this company) have only installed meat processing robotics at one Silver Fern site, the old PPCS Silverstream plant.

While the reduction in lamb numbers is a threat to the meat processing industry in the sense it will force more restructuring on the industry, this is no threat to Scott Technology expanding the production of their robotics. I guess the aim will be to equip all of the old PPCS meat processing plants with robotics, which is a huge opportunity for SCT.

The downside to SCT would be that the meat industry players become financially weak that they cannot afford to invest in high tech. The PGW/Silver Fern agreement has 'fixed' this problem in the Silver Fern corner of the industry at least.

SNOOPY

discl: hold SCT, PGW

[Sideshow Bob]

More robots....I wonder if they get them half price?

http://www.odt.co.nz/news/business/2...ooks-expansion


$6 million Finegand upgrade as firm looks at expansion
By Glenn Conway
Created 05/09/2008 - 05:00

Click photo to enlarge
[1]
Silver Ferns Farms Finegand plant manager Graeme Stanbury in the old chilling room, which will be expanded over the coming weeks. Photo by Glenn Conway. A multimillion-dollar fit-out during the off-season at Silver Ferns Farms' Finegand plant should lay to rest any doubts about the long-term future of Clutha's largest employer, manager Graeme Stanbury said.
Following a $20 million upgrade which included a new effluent treatment plant and boiler system, the plant, near Balclutha, is now undergoing a $6 million upgrade of its lamb cutting and beef boning departments.

Another $5 million will be spent on annual site maintenance.

The plant last season recorded a record beef kill of 61,286, surpassing the previous best kill of 60,996 in 2003, and up 11,663 on the 2007 figure.

The plant also processed more than 100,000 extra stock compared with the previous season.

Mr Stanbury said there was no doubt Silver Fern Farms was positioning Finegand to be a key player long into the future.

The investment showed the plant was thriving and was here to stay. At its peak, it employed more than 900 staff.

Alterations had started in the lamb cuts department, increasing the flow of products and creating extra chilling capacity.

After trials at its Silverstream plant, boning robotics technology would be introduced into this area in the coming season.

Developed by Dunedin-based Scott Technology, the system broke down carcasses, making precise cuts.

Two machines would be installed, but the rest of that process would still be carried out manually.

The company was deliberately increasing its chilled lamb cutting and fresh lamb kills as it gradually moved towards extending the killing season, Mr Stanbury said.

"We definitely want to lengthen the season . . . that means more production but also more work for our staff."

In time, it would look into processing the 100,000 bobby calves predicted to be available locally.

This could add up to an extra six weeks to the season.

New machinery, more space and better facilities in the beef boning room were also planned, with a new carton storage facility, extra carcass conveyers and larger staff amenities.

Mr Stanbury said these projects were the first two stages of a three-stage development.

Next season, more improvements to the boning room were likely as the company looked at improved product identification services, which would help make it easier to market the company's product abroad.

Customers wanted to know more about where their meat came from, Mr Stanbury said.

The new beef processing facilities should be ready for an October 28 start to the killing season, while the first sheep and lamb chain kills should be in mid-November.

[Snoopy]

More robots....I wonder if they get them half price?

---------

$6 million Finegand upgrade as firm looks at expansion
By Glenn Conway
Created 05/09/2008 - 05:00

<snip>

the plant, near Balclutha, is now undergoing a $6 million upgrade of its lamb cutting and beef boning departments.

<snip>

Alterations had started in the lamb cuts department, increasing the flow of products and creating extra chilling capacity.

After trials at its Silverstream plant, boning robotics technology would be introduced into this area in the coming season.

Developed by Dunedin-based Scott Technology, the system broke down carcasses, making precise cuts.

Two machines would be installed, but the rest of that process would still be carried out manually.

------

Yes Silver Fern will get half the profits, because they are 50% shareholders with SCT in the 'Robotic Technologies Ltd.' company that sells the robots. That doesn't equate to Silver Fern getting the robots at half price though.

SNOOPY

[Sideshow Bob]

It was tongue in cheek........

Hopefully there will be profits to half!!

[Sideshow Bob]

Looks like their new premises down Kaikorai Valley are nearly ready - well I think it is their premises? Irony is next to the old Burnside Freezing Works.....

[Snoopy]

Have just been digesting the FY2008 Annual Report that arrived in my mailbox today.

It was good to see SCT move back into profit (albeit modestly) for the last six months of the year. Also we at last got full disclosure of the 'Rocklabs' acquisition. There is a big picture of Rocklabs founder and General Manager, Ian Devereux, on page 7 looking very happy. Devereaux has every reason to look this happy, with his bank account boosted to the tune of $6m in cash! (page 36). This is rather more than I had guessed as a 'top up' in addition to the previously disclosed payment of $4m in SCT shares. Still with that much cash in his bank account, Ian won't be needing to offload any of his newly issued SCT shares in a hurry.

How did SCT pay for all of this? For the first time they have term bank debt on the SCT balance sheet, to the tune of $4.74m +$0.494m = $5.234m. At an interest rate of 9.81% (p41) that means interest payments due of $0.513m to the ANZ bank for FY2009.

We learn from p39 that Rocklabs Limited's banking facilities require EBIT to exceed interest expense by 1.5 times and further require Rocklabs's equity (including shareholder advances) not to fall below 40% of its total assets. If we require that same EBIT test to Scott Technology as a whole, that means SCT EBIT for FY2009 will be at least $770,000. That equates to a net SCT group profit, assuming a 30% tax rate, of $180,000. If SCT did 'achieve' that result in FY2009 it would be their second worst year on record (the worst being FY2008). So the debt position of SCT, while now a consideration, appears sound.

Other things we learned from the report is that once again we expect no net cash from the robotics division (page 6). All earnings are to be ploughed straight back into product development. On a separate note, it was very disappointing to see the Silver Fern/PGW joint venture pulled. A side effect will be a slowdown in the meat works robot roll out program. I suspect the SCT share price has suffered in recent weeks as a result of the Silver Fern/PGW deal collapsing.

Of particular interest in the small print was a note on page 30 , announcing the emergence of Scott Euro Limited, a joint venture with "Industrial Process Solution" of Italy. Could these be the same Italians who were in past years Scott's deadly competitors? If so it would be a major coup to have them 'on board' in Europe.

On page 4 of the Annual report CEO Hopkins states:

"Recent significant orders have enabled the company to see past the global gloom and to position ourselves for future development and growth. In addition we are also in final negotiations with several key customers in relation to potential new projects."

I sure hope Hopkins is right, and with the market the way it is I can afford to wait before I buy more shares to see if he is. In the meantime I would like to draw shareholders attention to item 4 on the upcoming AGM agenda, billed as the retrospective approval of the issue of shares for the Rocklabs acquisition. In fact it is nothing of the kind. It is actually an OK to issue more shares for as yet unnamed potential acquisitions. For this reason I will be voting AGAINST this motion even though I approve of the Rocklabs acquisition.

If motion 4 is lost this will not mean SCT cannot make further acquisitions. It means any such acquisitions will have to be approved by shareholders - a very good thing I think. Giving the board a free reign to issue up to 5 million new shares at today's discounted share price *without* shareholder approval does not seem to be in the interests of existing shareholders. For this reason I hope as many shareholders as possible will join me in voting AGAINST this motion.

SNOOPY

discl: hold SCT