SCT - Scott Tech

[winner69]

Well yes - huge jump in revenue, admittedly some increase in earnings (14.3 cts/ share) compared to last year. However - earnings per share not a significant deviation from the historic long term average of 13 cts / share and, as it looks - fully paid out of cashflow.

On the flipside - a huge drop in NTA. Did they buy too much "goodwill" coming with their recent aquisitions?

They might make cool stuff, but the historic financial performance was not really exciting ... and this years result is not different. Risks appear to increase.

shareholder returns (dividends) exciting like a bank account, just less secure .... and never mind the principle (share price);

Decrease in NTA ...maybe too much goodwill?

Pretty richly valued at 2 times book value for a company that has a RoIC about its cost of capital



urns its

[pg0220]

Looks like an increase in expenses came from costs broadly involved in acquisitions.... Also notice that they mentioned that they initiated new projects, it looks there has been an increase in R&D too.... I would like to know more about applications they are currently working on, sounds quite exciting!

[BlackPeter]

Looks like an increase in expenses came from costs broadly involved in acquisitions.... Also notice that they mentioned that they initiated new projects, it looks there has been an increase in R&D too.... I would like to know more about applications they are currently working on, sounds quite exciting!

I am sure the projects will be exciting ... from a technical perspective! Love software driven robots as well - great to play with!

It is just that this is an investors- (or traders-) forum, and from a financial perspective they so far managed to underwhelm ... just look at the SP if you don't want to read the books.

But who knows - maybe next time it is different?

[BlackPeter]

Ah yes - and looking at the acquisitions - sure, that's where the cost came from. Unfortunately not really earnings accreditive (huge increase in revenue causes only a minor wiggle in earnings).

Question is - did they pay a good price for their aquisitions? ... and if they did, for whom (seller or buyer) was the price good ?

But sure - probably strategic long term investments ...

[pg0220]

I am sure the projects will be exciting ... from a technical perspective! Love software driven robots as well - great to play with!

It is just that this is an investors- (or traders-) forum, and from a financial perspective they so far managed to underwhelm ... just look at the SP if you don't want to read the books.

But who knows - maybe next time it is different?

I know, when I saw the announcements yesterday and the numbers, I didn't quite like the bottom line not improving well as much as the top line. It just looks like that they are in the stage of further growth and spending more in developing their tech portfolio.... I have to admit that I was a bit disappointed that their NPAT wasn't so exciting but in the LT it is looking alright to me.

[winner69]

From the Financials .....is f19 going to be a boomer? But the acquisitions not adding that much more to the bottom line relative to the extra sales


Included in the Group financial statements is revenue of $26.7 million and an operating EBITDA of $0.9 million attributable to the purchase of the Alvey business and revenue of $4.0 million and an operating EBITDA of $0.8 million attributable to the purchase of the Transbotics business.

Had these acquisitions been effected at 1 September 2017, the revenue of the Group from continuing operations would have been approximately $225 million and the operating EBITDA would have been approximately $22 million. The Directors of the Group consider these '‘pro-forma’ numbers to represent an approximate measure of the performance of the combined Group on an annualised basis and to provide a reference point for comparison in future periods.

[winner69]

From those numbers above re acquisitions it appears the existing ebitda margin was 11.9% but the acquired businesses (on a full year basis) margin is only 5.4%

Acquired businesses margins seem a bit low?

[BlackPeter]

From those numbers above re acquisitions it appears the existing ebitda margin was 11.9% but the acquired businesses (on a full year basis) margin is only 5.4%

Acquired businesses margins seem a bit low?

In other words - they paid too much for the "goodwill"? Not the first company falling into that trap ...

Just so exciting for directors and CEO's to buy additional revenue. Great revenue pointers showing into exactly the right direction (top-right). Just don't talk about margins - I guess, who wants that much detail?

Maybe they can even consider to increase board fees thanks to their now much increased responsibility and company complexity? You never know ...

[pg0220]

I think Alvey is fine. I tried to search financial information about Transbotic when the acquisition was announced but was able to find some figures a several years ago, looks like they dropped off the market and they were making losses then. It may be Transbotic that has contributed to a decrease in margin.

But it still seems that the company is in the right direction for growth and projects ahead, Alvey being a warehousing specialist company contributing to the warehousing automation project and also with the Transbotic's tech, there seem a way this can be well utilised in their automation project. Well, I know again that margin doesn't look overwhelming and it may disappoint the traders with the bottom line figures, but I am still in opinion that the company is doing what it is supposed to do......

[Snoopy]

2

1

11:10:35 am

335

1,313,445

$4,400,040

Off market

Biggie....

We were advised of the above trade by sb9 on 17th April 2018. My attempt to identify who was doing the trade was as follows.

A squiz at the latest published share register (AR2017) indicates there are only three outfits that could sell that many shares in one transaction.

1/ Majority sharehodler JBS (very unlikely, if they wish to remain a majority shareholder. It would also be inconsistent with them acquiring more shares in last years DRP).
2/ Oakwood Securities owned by former CEO Graeme Marsh. Oakwood reduced their percentage holding during the JBS takeover, and they may be looking to reduce it some more now that Graeme Marsh is getting on a bit and there is no Marsh representation at Scott operating company level.
3/ The "JI Urquart Family A/C" estate who disastrously reduced their holding just at the wrong (capital raising ) time. Since Ian Urquart , a great Scott Tehnology stalwart, died they have gone on record as not being supportive of the company.

My pick is that it is 3. If we don't get a substantial security holders notice soon, then that will be confirmed by a process of elimination (both JBS and Oakwood would have to issue one, if it was them selling).

No substantial security notice was posted after 17-04-2018. So by elimination it looks like the answer was indeed 3.

Yet if we look at the Annual Report(s) for FY2017 and FY2018, it lists all the substantial shareholders as at 15th September 2017 and 17th September 2018. In both lists the number of shares held by the "JI Urquart Family A/C" estate is the same at 2,000,000.

How can this be explained?

SNOOPY