Scott lifts its profits 23.3pc

By Joe Helm

Better margins and a lower New Zealand dollar enabled listed production line manufacturer Scott Technology to lift tax-paid consolidated profit for the six months to February 28 by 23.3 per cent to $1.325 million.

Sales were 17.5 per cent higher at $13.011 million, reflecting expansion during the past two years and a more favourable exchange rate, particularly with the US dollar.

Scott Technology transacts most of its business in US dollars.

Company policy is to cover international sales with foreign exchange contracts.

A high proportion of sales over the next year will be at favourable exchange rates, further boosting sales revenues.

The lower value of the New Zealand dollar also helped improve margins, as did the company's ability to retain more work in-house because of expanded manufacturing capacity.

In the previous corresponding period, margins were depressed by a higher than normal level of work being let to sub-contractors due to several major contracts being completed simultaneously.

Scott is continuing to pursue a growth strategy, spending on facilities, plant and machinery.

The company's forward order position is at an all-time high.

Scott has established a sales office in Britain to ensure contracts from the European market supplement the existing North American market and enable Scott to become a global leader.

An unchanged, fully imputed interim dividend of 4.5c a share will be paid on May 13.