Equipment maker shrugs off decline in revenue

Operating revenue at Dunedin automated manufacturing equipment maker Scott Technologies has dropped by almost a third from $40 million to $27 million - but the company says it is not concerned.

The operating surplus for the year to August dropped 14 per cent - or $67,000 - to $392,000, while tax-paid profit dropped 23 per cent to $242,000, an indication that margins achieved on the lower sales were better.

Directors said they were confident of delivering a much better performance this year and beyond.

Scott, an NZX-listed exporter, mainly supplies the whiteware sector, and is also doing considerable R&D work in the area of meat processing.

Managing director Chris Hopkins said yesterday that he was not unhappy with the lower revenue, which reflected less demand and the sale of a package-handling business.

"The volume of our work always sort of fluctuates a bit depending on the number of projects that we've undertaken."

He said much depended on where whiteware manufacturers were with developing new products.

The company had probably done more than it could really handle the previous year.

"Sometimes doing less can be better," he said. "The key for us is how much money we make on [our sales], how well we price those projects."

Scott was seeking to overcome the challenge of a fluctuating dollar by increasing technical innovation and expertise "to improve the value of our technology to our customers, which will reflect in our margins".

It was also constructing systems for a client at the top end of the United States appliance market.

A fully imputed dividend of 3c a share has been declared.

Scott's shares closed yesterday up 10c at $2.25.