Dunedin-based Scott Technology managed to substantially reduce its operating loss in the six months ended February but will not pay a dividend for the period.
The company reported a loss before taxation of $748,000 for the period, an improvement on the $1.2 million loss in the previous corresponding time.
A taxation credit of $274,000 helped reduce the after-tax loss to $474,000 ($836,000 last year).
Revenue increased to $13.4 million ($8.3 million) and cash flow from operations returned to positive in the period.
The results included costs from the relocation of Scott's Dunedin operation to the new purpose-built facility.
Chairman Stuart McLauchlan said the current six months included sales and contribution from Rocklabs Ltd, which was acquired on April 1, 2008.
"The addition of Rocklabs increased both sales and contribution from operations and assisted the group's overall performance."
Early last year, the group reported that the global economic situation had seen many international customers deferring new capital projects.
That was expected to affect the level of sales for both the appliance and automation divisions.
"Since then, the global economic recession deepened and the events around the globe that directly affect our markets are unprecedented since the Great Depression of the 1930s."
Late last year, the group was successful in securing two significant orders - one from an appliance manufacturer in North America and the other from a major mining company, he said.
Scott Technology saw the opportunity to rebuild momentum with those projects, but before they were advanced beyond the engineering concept stage they were cancelled due to the global economic crisis and the momentum was lost.
"The early success in winning a contract for a sophisticated automation project in the mining sector provided significant confidence in our strategic direction of developing automation systems for the mining sector.
"In this area, we seek to combine the best of Rocklabs with Scott's process automation expertise.
These opportunities still exist but the timing is likely to be dependent on broader economic recovery."
Despite the current difficult macroeconomic environment, the group continued to invest in research and development in its meat processing technology and in several other areas that would maintain the group as world leaders in automation, Mr McLauchlan said.
Current development opportunities and a recent increase in forward work provided confidence and encouragement for the medium-term future.
The directors would focus on improving the operating performance and cash flow to return the group to profit and enable it to resume paying dividends, he said.
The economic conditions were difficult for the group, as a manufacturer and exporter of capital equipment.
"We have great skills, expertise and experience which we are using to develop a range of opportunities for future income streams.
"This, combined with a strong balance sheet, provides the directors . . . with confidence that the group can work through the current economic situation."
At a glance
•Revenue: $13.4 million
•Before tax loss: $748,000
•After tax loss: $474,000
•Operating cash flow: $239,000
•No interim dividend paid
