SCT - Scott Tech

[Snoopy]

Shoot Me Dead,

at least 27 mil in debt and still paying a divi?

	HY2015	HY2014
Bank overdraft	$5.180m	$6.388m
Current portion of bank loan	$13.547m	0
Term portion of bank loan	$7.404m	$3.200m
Total	$26.131m	$9.588m
EBITDA	$2.640m	$2.102m

Debt has increased by 270% compared to the prior period. However EBITDA, a measure of the earnings of the company independent of the underlying debt, has also increased. So I'm not too worried that the earnings profile of SCT is going the wrong way with these Robotics acquisitions. There is nothing here that the upcoming cash issue can't fix. Nevertheless I do get a slight twist in the gut when a company pays a dividend, even a modest one, and follows this with a cash issue. But I guess the need for a reliable income stream for some shareholders is why SCT management are doing this.

On the up side, with the way the AU reserve bank is devaluing the dingo dollar, expect the gold miners to start purchasing machinery again.

I am not sure that mining equipment sales are that influenced by what is happening in Australia that much. Rocklabs is quite a global business. Sales of reference materials to Russia and South America are equally important.

SNOOPY

[Carpenterjoe]

	HY2015	HY2014
Bank overdraft	$5.180m	$6.388m
Current portion of bank loan	$13.547m
Term portion of bank loan	$7.404m	$3.200m
Total	$26.131m	$9.588m
EBITDA	$2.640m	$2.102m

Debt has increased by 270% compared to the prior period. However EBITDA, a measure of the earnings of the company independent of the underlying debt, has also increased. So I'm not too worried that the earnings profile of SCT is going the wrong way with these Robotics acquisitions. There is nothing here that the upcoming cash issue can't fix. Nevertheless I do get a slight twist in the gut when a company pays a dividend, even a modest one, and follows this with a cash issue. But I guess the need for a reliable income stream for some shareholders is why SCT management are doing this.



I am not sure that mining equipment sales are that influenced by what is happening in Australia that much. Rocklabs is quite a global business. Sales of reference materials to Russia and Suoth America are equally important.

SNOOPY

Cheers Snoopy,

Hopefully the new office in Perth can generate a little new dosh.

http://www.scott.co.nz/news/pdf/2015..._Australia.pdf

http://www.rocklabs.com/tradeshows/

Rocklabs is defiantly spread far and wide.

Hopefully MAR can sell a few of these suckers to the Australian goldies.

http://www.machineryautomation.com.a...ic-refuelling/

[Under Surveillance]

I received today by post from Scott the 2015 half year report.
Amusingly, the stamps making up the $1.60 postage included a 10 cent one marking the centenary of the NZ Law Society, 1869-1969.

[Lizard]

I received today by post from Scott the 2015 half year report.
Amusingly, the stamps making up the $1.60 postage included a 10 cent one marking the centenary of the NZ Law Society, 1869-1969.

Seriously?? That deserves a shareholder enquiry... those 10c stamps would surely have posted off a decent size parcel back in 1969? (Maybe Winner or Percy can remember what postage was worth then... gee, we must have only just got "cents" around then!)

Further to above, I think we should ask why they didn't sell the things - they are worth 70cents each... if this is how they look after our shareholder assets...
https://stampsnz.com/1969_new_zealan...centenary.html

Did I miss a recent merger with MOW????

[winner69]

The workers just don't get it sometime, they need to realise they are just a dispensable commodity (resource) needed as and when needed to make shareholders rich

http://www.stuff.co.nz/business/6888...n-christchurch

Scott Technology lays off 13 employees in Christchurch

[Carpenterjoe]

The workers just don't get it sometime, they need to realise they are just a dispensable commodity (resource) needed as and when needed to make shareholders rich

http://www.stuff.co.nz/business/6888...n-christchurch

Scott Technology lays off 13 employees in Christchurch

Yeah, kinda funny. Maybe a mention of the 20 plus million of debt,
What's wrong with using temporary workers to fill peak times? Sounds like
some office bunny slapping an article together to justify his full time employment position.

[percy]

Try finding highly qualified fitters,engineers,and machinists when you want them.
Then try offering then temporary work.
However back to what we can learn from the announcement.It confirms another division of SCT is facing very strong headwinds,with the decline in production at the Christchurch factory.The Christchurch focus was on production systems for manufacturers of home appliances.
Hopefully for shareholders [and the company] we will see the company concentrating on their growing overseas robotics division.I see less lumpy earnings from robotics,more stable cash flow,and less reliance on a small number of customers.
It could be a sign that directors are being more prudent with their limited capital.

[Snoopy]

It could be a sign that directors are being more prudent with their limited capital.

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JBS has an existing business relationship with Scott and is considered a substantial key customer.
Many of the current technology developments have been undertaken in conjunction with JBS in Australia and beyond.

JBS’s investment offer is in the form of a Scheme of Arrangement (‘the Scheme’) and consists of:

a) A placement of 10 million shares at $1.39 (that's $NZ13.9m) to JBS to provide the capital that Scott was looking to raise;
b) An offer to purchase shares at $1.39 from any shareholder who would like to exit or reduce their shareholding;
c) A 1 for 8 non-renounceable rights issue at $1.39 for shareholders who do not want to sell but would like to increase their shareholding;
d) If required after a) through c) have been completed, a further placement at $1.39 to give JBS a shareholding of 50.1%

------

First reaction is that control of the company is being ceded very cheaply here. I keep thinking I must have made a mistake. But it still looks to me like we existing shareholders are being sold out (50% diluted) for a mere $NZ13.9m. Please someone tell me I have misread today's announcement!

SNOOPY

[GTM 3442]

Sorry Snoopy, but I think you have it right.

But I have faith in New Zealand's technology sector, and so will be getting all I can lay my hands on.

[Under Surveillance]

------
First reaction is that control of the company is being ceded very cheaply here. I keep thinking I must have made a mistake. But it still looks to me like we existing shareholders are being sold out (50% diluted) for a mere $NZ13.9m. Please someone tell me I have misread today's announcement!

SNOOPY

I'll oblige.

My take is that there are now 45.5 million shares issued (in round figures) and BPS will pay $13.9M for a newly-issued 10.0 million. Thus far, JBS will have just under 18% of the expanded 55.5 million shares.

JBS will need to buy another 17.8 million shares (rounded number) under b) or c) or d) of the offer to get to 50.1%. That would see them spend roughly $38.6 million.