SCT - Scott Tech

[Snoopy]

You do realise that Millers Mechanical (Milmeq) went into liquidation last year....?

https://www.odt.co.nz/news/dunedin/d...e-cost-40-jobs

'Ouch', I didn't know that. When I saw that Scott's had taken over the "Milmeq Spares and Sundries Meat Slaughter Business" in January 2019, I thought it was just a logistical move to combine 'export resources' with Scott's who have been 'beefing up their beachheads' overseas. I had no idea that Milmeq itself had gone under. Quoting from that article

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Milmeq custom-designs, engineers and manufactures systems for primary food processing, materials handling, chilling and freezing within the protein industry.

Mr Marshall (board chairman) said ''world markets have been challenging'' for the past 12 to 18 months with inter-company consolidations, Australia's drought and the uncertainty surrounding the US-China trade tariff war.

''Companies are just not making reinvestment decisions at the moment.''

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No new business on the horizon, nada, none. Yet two years previously Milmeq were finalists in three categories in the Otago Chamber of Commerce business awards. What a fall from grace.

If the business had been for sale for six months before the plug was pulled, you would have thought that some one at Scott's would have known about it. And they chose not to buy it. Now the acquisition of Alvey by Scott's makes more sense, to fill this hole.

SNOOPY

[emveha]

I can't find the result date in the announcements but it should be soon. We'll see how well (or poorly) the European branch is doing then.

[sanctus671]

I can't find the result date in the announcements but it should be soon. We'll see how well (or poorly) the European branch is doing then.

I would expect it towards the end of this week. Last year was around this time but might be +- a week.

[Snoopy]

I can't find the result date in the announcements but it should be soon. We'll see how well (or poorly) the European branch is doing then.

Result out and it is a bad one. A result so shameful, Scott's management couldn't even bring themselves to tell us what the net profit after tax was in their NZX announcement! The headline figure emphasised was the 4% increase in EBITDA. But that includes a $4m increase as a result of the adoption of new NZ IFRS rules. Take that away and EBITDA year to year is well down:

($20m -$4m) / $19.3m = 82%

So underlying EBITDA is down by 18%, and the increased depreciation and interest charges will mean NPAT has plunged by rather more than that. And the increase in shares as a result of the DRP will mean that the 'eps' decline will be even larger than the NPAT decline. Final dividend down from 6cps (fully imputed) to 4cps (not fully imputed). Yet revenue has increased which means the actual profit margin has come crashing down as well. Not impressed.

SNOOPY

[winner69]

Its all about innovation and growth Snoops

Future is bright

Financials irrelevant ......to them

Got to be careful with what companies say these days about their profits ...Allied a bit loose with reality yesterday is a good example

[percy]

Took a lot of time trying to find the Net Profit after tax.
No wonder..!

[BlackPeter]

No surprises here. Sexy technology for the engineers but little money returned to investors.

Nice revenue growth as usual: long term (7 years) revenue CAGR =19.7 and consistent earnings drop: long term earnings CAGR negative 5 percent. Just wondering where this will end?

But yes, they are obviously just investing for a much brighter future, which may or may not come.

Who knows - maybe they become one day the Tesla of meat processing ... and only the sky is the limit? Shareholders just need to make sure they don't miss the peak ;

[Snoopy]

No surprises here. Sexy technology for the engineers but little money returned to investors.

Nice revenue growth as usual: long term (7 years) revenue CAGR =19.7 and consistent earnings drop: long term earnings CAGR negative 5 percent. Just wondering where this will end?

But yes, they are obviously just investing for a much brighter future, which may or may not come.

Who knows - maybe they become one day the Tesla of meat processing ... and only the sky is the limit? Shareholders just need to make sure they don't miss the peak ;

Part of today's Otago handout:

https://www.odt.co.nz/news/dunedin/2...lside-workshop

As Shane says:

"We are providing $5.8 million towards the establishment of a dedicated manufacturing agriculture technology business unit within Dunedin-based company Scott Technology."

"This unit will be dedicated to automation solutions and services for New Zealand food processors, producers and their suppliers.''

Scott's now a fully state subsidised business?

SNOOPY

[BlackPeter]

Part of today's Otago handout:

https://www.odt.co.nz/news/dunedin/2...lside-workshop

As Shane says:

"We are providing $5.8 million towards the establishment of a dedicated manufacturing agriculture technology business unit within Dunedin-based company Scott Technology."

"This unit will be dedicated to automation solutions and services for New Zealand food processors, producers and their suppliers.''

Scott's now a fully state subsidised business?

SNOOPY

Interesting. I used to work for some other NZ high tech company which managed to attract plenty of taxpayer funded subsidies. Can't really claim that that story ended very flash, but wish Scott all the best.

Just wondering - are there examples around for tax payer funded businesses which ended up really successful for shareholders?

[emveha]

A 5.8 M loan isn't exactly what I would called "fully state subsidised" or "tax payer funded".