3/4 Year Announcement for FY2023
Quote:
Originally Posted by
Snoopy
Wow, Scott up 8.3% on that interim result to 3 bucks as I write this: Top of the NZX leaderboard!
Interim net profit up 66% from $4.7m (5.9cps) to $7.8m (9.8cps), a rise of 66%. Interim dividend unchanged though at 4cps, with no imputation credits. Perhaps a bit disappointing there is no dividend rise, as company debt is low.
FY2022 operational profit was $12.7m, implying a 2HY2022 result of $8m. So rolling twelve month result now $15.8m, or 19.8cps. That means at $3, based on 79.852m shares on issue, SCT is trading an an historical PER of 15. Doesn't seem too demanding for a company with such a solid portfolio of high tech products to sell.
"Forward work remains strong particularly around the meat and materials handling (Europe) sectors."
But look at the chart headed 'Regional Business Update', and NZ has one of the lower margins at just 2.9%. Then we are told that Rocklabs based in Auckland, traditionally one the the most profitable Scott operations, maintained their margins in dollars, despite reduced sales. The lamb and beef boning room projects are run from Dunedin. So I am surprised to see the overall NZ margins so low. No imputation credits might imply that once the corporate overhead is added in, NZ overall is loss making?
Also no follow up mention of the highly touted Caterpillar robotic fuelling deal. I hope our little caterpillar hasn't crawled away shrivelled up in heat affected outback Australia and died under a scorched Leaf?
The Scott star was fading a bit. Briefly touched $2.60 after the $3 jump on the interim result hike announced in April. So Scott's come out with a 'third quarter announcement' to save the show. 'Third quarter announcement'? That has to be a new one for Scotts.
The quick round up on new business deals signed is this:
1/ Automated sample processing for Mineral Resources Limited, the commercial launch of Scott's modular mining product: $12m
2/ Palletising and Materials handling: A-ware Food Group $3.2m, Colruyt $1.5m, Incom Leone (dairy) $7m
3/ Appliance Manufacturing Lines: New deal signed with Midea for $6.5m (third deal sealed this year with this company)
Then we hear:
"The upgrades arm of the appliance business remains a reliable source of high value, high margin contracts, reflecting strong customer confidence in Scott solutions and alignment with the Scott 2025 strategic pillar of authentic customer partnerships."
That sounds a lot better than describing this 'appliance' side of the business as 'non-core' as has been the case for the last two years. I had been wondering what the distinction between core and non-core business unit at Scotts really was. But now I see it is obvious. As soon as there is a pathway for good money to be made, that business unit becomes core!
The announcement that a "fit for purpose manufacturing centre is being set up in Christchurch to increase manufacturing capacity to meet demand (for poultry trussing)." is interesting. I wonder if this is being looked at as a way to better utilise that skilled Christchurch workforce, now that the appliance line manufacturing business in China seems well established?
Adding up those headline deals announced, I get a total of: $12m+$3.2m+$1.5m+$7m+$6.5m=$30.2m
Annual revenue for the company over FY2022 was $222m. Revenue was $126.5m for HY2023. So that third quarter run rate is looking a little light, although those deals do not include the standard product stuff. Nevertheless is this a hint that Scott is to 'run out of puff' in FY2024?
Today's announcement reads more like a 'Got up, washed my face, and combed my hair announcement.' Nothing very startling. Something that every shareholder might expect is going on behind the scene. Mind you given CEO John Kippenberger's adopted hair style, that 'combed my hair' bit might be genuinely newsworthy?
SNOOPY