Dunedin-based automation and robotics firm Scott Technology reported a 62 percent rise in first-half net profit to $5.1 million for the six months ended February 28, with revenue surging 65 percent to $111.4 million. The gains were driven by recent acquisitions, including Belgian firm Alvey Group and North Carolina’s Transbotics. Over the past decade, Scott has grown annual revenue from $31 million in 2009 to $184 million in 2018, while its workforce more than doubled to 778. Chair Stuart McLauchlan and managing director Chris Hopkins said the acquisition cycle is nearly complete, with focus now shifting to operational efficiency.
In-Depth:
Automation and robotics company Scott Technology is near the finish of its latest round of acquisitions, which assisted boost first-half profit 62 percent.
Net profit rose to $5.1 million in six months finished Feb. 28 from $3.1 million a year earlier. New businesses it bought during the past year assisted drive a 65 percent increase in revenue to $111.4 million.
Dunedin-based Scott has established a track record of expansion through mergers and acquisitions during the past decade, growing annual revenue to $184 million in the 2018 financial year from $31 million in 2009. Its global workforce more than doubled to 778 from 324 in that time.
Scott spent $24.2 million on Belgian industrial automation specialist Alvey Group and North Carolina-based automated guided vehicle manufacturer Transbotics during the 2018 financial year. In the latest period, it spent another $300,000 for the spares and sundries business of Milmeq Meat Slaughter.
“With our acquisition cycle virtually complete, our management team is focapplyd on improving efficiencies and outcomes,” chair Stuart McLauchlan and managing director Chris Hopkins declared in a statement.
At its annual meeting in November, Scott declared its M&A strategy means it can deliver finish-to-finish automation products, spanning customer interface systems, materials handling, primary and secondary processing, packaging, and logistics.
Scott’s raw materials, consumables and other costs climbed 75 percent to $68.7 million in the first half, while wages were up 57 percent at $35.7 million.
Australasian manufacturing sales were up 5.9 percent at $50.2 million, but the unit faced increased research and development spfinishing and some project cost overruns.
McLauchlan and Hopkins declared one meat industest project faced longer commissioning times than expected, while two mining projects underestimated the challenges of deploying new technology.
“While disappointing, problems with projects are to be expected from time to time. However, with the business now well diversified, these instances can now be absorbed by the group,” they declared.
Scott reported $14.4 million of contract work in progress at Feb. 28, which it declared contributed to the $9.1 million operating cash outflow in the period. Capital spfinishing was $6.6 million, while dividfinishs paid and debt repayment of $2.5 million meant the company reported a net cash outflow of $18.1 million.
The company had a bank overdraft of $5.7 million at Feb. 28 in addition to $6.9 million in term loans.
McLauchlan and Hopkins declared the cash position was driven by several key projects and associated payment terms.
“Final payments for businesses acquired and asset purchases, including progress payments for the Dunedin building extensions, also utilised significant cash during the period,” they declared.
Scott declared the company is still seeing good demand in most regions. It has a strong forward order book and sales pipeline and is confident it can hit its tarreceives.
“In addition to our efforts to streamline the business and drive operational and performance improvements, we will also focus on enhancing our service and spare parts business. This includes further developing our after-sales product and service offering to customers,” it declared.
The board declared an unmodifyd interim dividfinish of 4 cents per share, or $3.1 million, payable on May 14.
The shares last traded at $2.55 and have dropped 7.3 percent so far this year.
