The appliance production line manufacturer Scott Technology has secured its first Chinese contract since opening a sales office in Shanghai.
The $4 million contract was announced at the company's annual meeting in Dunedin, with a $2.6 million contract for its subsidiary, Scott Automation Auckland, for an automated package storage and retrieval system.
But chairman Graeme Marsh told about 60 shareholders that the company was unlikely to repeat last year's exceptional financial performance this year.
The company reported an operating profit for the year ended August 31 of $8.4 million, compared with $3.7 million the previous year, on record sales of $47.4 million, up from $29 million the year before.
Shareholder equity increased over that period from $13.5 million to $16.9 million.
Marsh said directors were planning for what he called "a good result", given the variability of a high exchange rate and hefty investments in research and development with Scott's automated meat-processing systems.
He described progress with this development, a joint venture with meat-processing and marketing company PPCS, as most exciting.
"This is leading-edge technology and will involve considerable on-going investment in development to achieve its full potential, which we believe can be marketed world wide."
Chief executive Kevin Kilpatrick said six appliance manufacturing systems had been exported last year.
But in the coming year the exchange rate and global uncertainty would be a challenge.
"Contracts carried forward from the previous year and secured at more favourable rates of exchange will maintain margins," he said.
"However, the anticipated level of competition, combined with the high value of the New Zealand dollar, will place significant pressure on future contract margins in the short term."
Directors announced a one-for-eight non-taxable bonus share issue and a final dividend of 8c a share, payable on all shares, including the bonus.
That takes the total dividend for the year to 14c a share, or 15c a share pre-bonus. Shareholders received 11c a share last year and a one-for-eight share bonus.
- NZPA
China deal for Scott Tech
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