More than 50 shareholders attended Scott’s annual meeting in Dunedin yesterday, where $21million in new forward orders was confirmed, taking the total work for the next 10 months to the record $80million. Both Scott chairman Stuart McLauchlan and chief executive Chris Hopkins, who were both re-elected unanimously, said diversification, acquisitions, the workforce and geographic spread were behind the company’s success in 2016-17.
Scott posted a strong result in the year to August, with revenue up 18% to $132.6 million and before-tax profit up 35% to $14.9 million, while as of yesterday the company had $26million cash in hand.
"It’s a very full order book ... and works in well with our doubling the size of our Dunedin facility, and given the recent loss of manufacturing jobs in Dunedin," Mr McLauchlan said.
The Kaikorai Valley headquarters will be almost doubled with an additional 1500sq m of space, starting next year.
While Mr McLauchlan cautioned about the possibility of "trade wars", given the US stance on trade and the continuing strength of China, he was confident the company was "well placed for the future", given its product diversity and spread of more than 430 staff around the world "Inquiries for [robotic] automation are at an all-time high," he said.
With $26 million cash in hand, Mr McLauchlan said Scott was still on the acquisition trail and looking at either complementary or breakthrough technology businesses.
Most of about 30 recent acquisition targets had been considered and discarded, but Mr McLauchlan was optimistic of there being "no shortage of opportunities".
Mr Hopkins reiterated product diversity and the workforce were "key" to the strong outcome for 2016-17, saying revenue from industrial automation was up 41%, manufacturing of assembly lines rose 30% and the niche-market mining-sector measuring equipment grew 18%.
"A strong balance sheet means more acquisitions and further geographical reach ... we have to be selective and ruthless in our search," Mr Hopkins said of future acquisitions.
He outlined work in the US, Europe, China and Australia, where Scott was achieving "solid growth" in some areas, from a mix of robotics and assembly line work and the growing income from refurbishment of robotics.
He said "key growth area" lay in a recently completed robotic palletiser system, in use in Australia, which loaded pallets and stored and retrieved them within a warehouse environment.
Another product gaining traction was BladeStop, an earlier acquisition, which has a mechanism controlling band saws in the meat industry that can auto-stop before seriously damaging a finger.
While 11 lamb boning systems had been sold to date, Mr Hopkins said the bigger commercial markets were in beef, pork and poultry. Some "early development" was already under way for pork and poultry for the US and European markets.
Another "vitally important" area for Scott was research and development, where up to 10% of annual revenue went, and especially when there was a customer demand in which they could contribute to developing prototypes, Mr Hopkins said.
• The Australian arm of Brazilian food giant JBS took a 50.1% stake in Scott in April 2016, in a deal worth more than $40million that paid off all Scott’s debt at the time, leaving $25million in cash reserves.
