SCT - Scott Tech

[percy]

Another small earnings positive acquisition by SCT announced today.AST [Applied Sorting Technologies] of Melbourne acquired for $1.3mil.
SP has decreased nearly 15% since I purchased my small parcel not long ago!!.

[Snoopy]

Another small earnings positive acquisition by SCT announced today.AST [Applied Sorting Technologies] of Melbourne acquired for $1.3mil.

"AST is based in Melbourne Australia and has skills and expertise in advanced sensing and imaging technologies including X-ray, DEXA and CT scanning. These technologies are included in a range of x-ray inspection products and applications for the mining and meat processing sectors which complement and add to Scott’s portfolio of skills and capabilities.

The total purchase price of around NZ$1.3 million consists of an amount for the net tangible assets and an amount for the transfer of intangible assets subject to earn-out over the next 18 months."

This deal has the stamp of Mark Waller all over it. Mark I know makes a big thing about not expanding outside of your core competance and business mission strategy. There are enough technical people on the board to make sure SCT is not acquiring a pup. And we have the twin guiding hands of Mclauchlan and Hopkins to keep the deal profit focussed. I like the payment subject to earn out aspect of the deal.

"It is expected that AST will be earnings positive from acquisition."

I am never totally comfortable with this 'earnings positive ' thing as it always gets me thinking. I wonder how profitable SCT is right now with the high exchange rate, to make the comparative benchmark? And I wonder if buying "Joes Ice Cream Caravan" at St Kilda beach might be an even more profitable eps acquisition!

"AST has contracts that will provide a base workload for the next two years and Scott will add resource to expand the reach into the mining and meat processing sectors."

Good stuff sounds like the newly acquired subsidairy is busy enough to gently transition into the Scott fold.

SP has decreased nearly 15% since I purchased my small parcel not long ago!!.

The hazards of a thinly traded share in a market where people react to the new 'latest thing'. Nothing really changed for SCT I think, but I am keeping half an eye on that exchange rate.

SNOOPY

[percy]

The more overseas acquisitions they do,the less the exchange rate concerns me.

[Snoopy]

On 13th September2010, Ian Urquhart second largest shareholder in SCT with 15.1% of shares on issue (source 2009 Annual Report) passed away. He was 76. The death notice in the Press named no living family, but Ian seemed to have been a bit of a mentor to younger investors in his last few years according to the article in Saturday 25ths Press. Looks like he will be sadly missed. Perhaps this represents the start of a real passing of the baton to a younger generation of investor at SCT? In any event I will be watching with interest to see what happens to Ian's strategic stake.

Four years on and through cash issues and bonus shares the J.I Urquart Family A/C has reduced their share in Scott Technology to 12.25% as at the last reporting date (23rd September 2013).

I wonder how many shareholders noticed that last week saw the biggest number of SCT shares traded all year. On one day alone the volume was over 450,000. There are only 5 shareholders who could have sold that many shares: Oakwood Securities (associated with former Chairman Marsh), JI Urquart A/C, Fisher Funds, Southern Capital Limited (associated with former director Trevor Scott) and SIL Long term holdings (associated with Dunedinites Eion Edgar and Alan McKenzie). Of those SIL Long Term holdings most closely matches the number of shares sold. Eion Edgar cashing up? It will be interesting to double check against the top 20 shareholder list in the annual report.

SNOOPY

[Snoopy]

Not sure if a non person can have a biography, but if they can the SCT biography came out last year, commemorating 100 years of being in business.

“Scott Technology, 100 years of Engineering” by Jim Sullivan ISBN 978-0-473-25532-3"

It was on sale to shareholders at last years AGM, so perhaps worth checking out if you are new to the share register. The company has changed so much since inception. But one little story I couldn't resist quoting, showing the kiwi way of doing things, relates to former CEO, now director, Graham Batts when he was chasing down a new US contract. Quoting from p108:

------

About 1993 the association with Maytag came about through some old fashioned pig headedness on the part of Graham Batts (CEO of the day) when he decided to visit the head office of the company at Newton, Iowa. He fronted up with no appointment and no name to ask for. Not surprisingly the receptionist was not helpful and Graham left empty handed. But not to be deterred he returned the next day.

While hoping for a different receptionist from the day before, he noted a number of visiting Maytag executives, milling about waiting for the lift. On impulse he moved into the lift with them, got out on the 6th Floor and asked the first person he met if he could see the chief engineer Jim Brown. The puzzled reply was that there was no Jim Brown, the name was Tom Smith.
“ Oh yes, that’s the name, I had his name confused with the engineer from another plant.” said Graham.
He was directed to Tom Smith’s office, and after a few minutes with the bewildered Tom, all was sweetness and light. Credentials were exchanged, new projects and proposals were discussed, and eventually contacts leading to some large orders made.

------

SNOOPY

[Carpenterjoe]

Not sure if a non person can have a biography, but if they can the SCT biography came out last year, commemorating 100 years of being in business.

“Scott Technology, 100 years of Engineering” by Jim Sullivan ISBN 978-0-473-25532-3"

It was on sale to shareholders at last years AGM, so perhaps worth checking out if you are new to the share register. The company has changed so much since inception. But one little story I couldn't resist quoting, showing the kiwi way of doing things, relates to former CEO, now director, Graham Batts when he was chasing down a new US contract. Quoting from p108:

------

About 1993 the association with Maytag came about through some old fashioned pig headedness on the part of Graham Batts (CEO of the day) when he decided to visit the head office of the company at Newton, Iowa. He fronted up with no appointment and no name to ask for. Not surprisingly the receptionist was not helpful and Graham left empty handed. But not to be deterred he returned the next day.

While hoping for a different receptionist from the day before, he noted a number of visiting Maytag executives, milling about waiting for the lift. On impulse he moved into the lift with them, got out on the 6th Floor and asked the first person he met if he could see the chief engineer Jim Brown. The puzzled reply was that there was no Jim Brown, the name was Tom Smith.
“ Oh yes, that’s the name, I had his name confused with the engineer from another plant.” said Graham.
He was directed to Tom Smith’s office, and after a few minutes with the bewildered Tom, all was sweetness and light. Credentials were exchanged, new projects and proposals were discussed, and eventually contacts leading to some large orders made.

------

SNOOPY

Classic,

Love it!

[Snoopy]

Taken a very very long time. Ian Urqhart told me about the company a good number of years ago. He was a pretty big shareholder at the time.

Explanation for the recent share price weakness (15th July announcement). The trustees of the Ian Urqhart estate have reduced their holding from 12.677% to 8.188%. Nearly 1.5m shares dumped on the market. Probably some kind of risk re-balancing going on, as trustees in general seem 'required' to do, even if it lacks all business sense. But I can hear that rotating whir of Ian spinning in his grave!

SNOOPY

[Snoopy]

Explanation for the recent share price weakness (15th July announcement). The trustees of the Ian Urqhart estate have reduced their holding from 12.677% to 8.188%. Nearly 1.5m shares dumped on the market. Probably some kind of risk re-balancing going on, as trustees in general seem 'required' to do, even if it lacks all business sense. But I can hear that rotating whir of Ian spinning in his grave!

Share price down to $1.52 tonight. Maybe those trustees have a point short term.

XRF Scientific, a loose agency partner of SCT in Australia, released their results this week. Annual eps down 38%! But they say, our earnings not as badly affected as other mining suppliers so we have done OK. Well the market didn't like it and pushed XRF down below 20c, a three and one half year low - ouch!

So maybe the Rocklabs division of SCT will disappoint too? Too soon I think for SCT to see any tangible benefit from the expansion of their robotics division. Appliance line manufacturing plant is always a bit up and down. Shareholders might need to brace themselves for the October full year announcement. For we long term investors the SCT story is still on track though. Perhaps a buying opportunity coming up after SCT full year results are announced in October?

SNOOPY

[percy]

The acquisition of RobotWorx should offer good opportunities for SCT.
Liked the announcement so much I brought some shares at $1.82.!!!!

Well Percy old son you certainly got this one wrong.!!!!!!

[Snoopy]

Well Percy old son you certainly got this one wrong.!!!!!!

Depends on the time frame you are investing to. I still don't predict great things for FY2014. But the USA is recovering, and the exchange rate is moving in SCT's favour. The SCT share price could very well hit $1.82 again by the end of the year with a positive profit outlook.

SNOOPY