Scott definitely need to up their game. Weak companies are weeded out in recessions and (in this case) when the currency appreciates.
I agree on the dividend. They should be in survival mode.
Pity for shareholders.
Printable View
I know my accounting skills are lousy, but didn't their accounts receivable increase by ten million dollars? Wouldn't this difference cover the over draft and dividend in the next period?
I agree tho, as I very minor shareholder I wouldn't mind missing a dividend or two to juice up the cash holdings
Joe
Yes liability growth is largely offset by receivable growth.
The next set of accounts will show whether it is just a timing issue or a more serious problem.
Caution is still required.
The selling pressure is reflecting in the downward share price trend.
I got it wrong with my profit prediction. $1.085m divided by 41.520m shares on issue equates to 2.6cps. I had expected the downturn in mining to affect Rocklabs. The segmented NPAT of $1.026m was above my expectations. I had not expected the profit from Appliance Line Manufacturing to fall to just $0.354m for the half year though.
Her is what management said about that:
"The Appliance sector performed strongly in terms of sales and forward work. Significant contracts have been won from customers in North America, China and Germany. However, the rapid increase in value of the New Zealand dollar and the associated higher cost of manufacture in New Zealand has impacted on the margin we are able to obtain and deliver."
That pesky high dollar again! The one criticism I might make of SCT is that they seem unable to consistently get the price premium the company developed innovations surely deserve. Very easy for me to say. Much harder if you are the sales manager, balancing long term customer relationships and the need to keep your skilled workforce fully engaged to execute.
I was correct about the dividend though. Unchanged from last year at 2.5cps, and at least SCT aren't borrowing from the bank to pay it!
SNOOPY
discl: hold SCT and am accumulating around the $1.50 level.
[QUOTE=Snoopy;470524I was correct about the dividend though. Unchanged from last year at 2.5cps, and at least SCT aren't borrowing from the bank to pay it!
Dividend 2.5cents per share......EPS 1.3cents......Difference;The Tooth Fairy? lol.
This big difference in the cashflow is further explained under note 2. Trade debtors poured $3.881m of cash into the company in the pcp. This year the trade debtors are sitting in the accounts with money yet to be paid totalling $6.034m. That is a $9.915m turnaround for the worse! However the contract work in progress has jumped from a negative cashflow position of $0.205m to a positive of $3.945m. That partially offsets the trade debtors figure. I can't see any more information that would further explain things in this half year release. But given the rather large projects that SCT undertakes, I am picking it is just a timing issue. But as Percy says, the cashflow needs watching.
$3.2m of that is explained by the purchase of their Rocklabs buildings and land in Auckland.Quote:
Bank overdraft up fom nil last year to $6,388,000 this year is not good.
"Despite the challenging trading environment, the Directors have confidence in the strategic direction of the company and have maintained the interim dividend at the same rate as last year."Quote:
Yet company is going to pay a 2.5cent dividend in May.May not be a good idea?
SNOOPY
$1.085m divided by 41.520m shares on issue equates to 2.6cps (half year earnings). I see that 1.3cps earnings figure in the accounts for SCT as released Percy. But I think it might be a mistake.
One thing I didn't like as an explanation of the profit difficulties was this:
"The company’s research and development expensed during the first half of 2014 was $0.9 million. Taking this into account, the company’s result for the half year before reinvestment in research and development is $2.0 million, equating to an annualised return of 10% on average shareholders’ funds."
From where I come from the R&D was spent. If it wasn't worth spending then why was it spent? This type of thing is just BSing shareholders IMO.
SNOOPY
Cynics would say the price has already collapsed from two year highs of $2.70 down to around $1.50. But at least SCT is still making a profit and is about to pay a dividend. The imminent arrival of a dividend is always good to support a share price. I wonder if any directors of those startup Saas companies know what a dividend is? I guess if you don't make profits, you don't have to know that!
SNOOPY
Nice rebound yesterday, up 7%, good news for all of us who have been buying in the recent dip. Be $2 soon, maybe !.