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12:00AM, 17 Oct 2006 | FLLYR

Scott Technology Limited

Results announcement to the market.

Reporting Period: 12 months to 31 August 2006
Previous Reporting Period: 12 months to 31 August 2005

Amount (000s); Percentage Change
Revenue from ordinary activities: 27,479; (31.9%)

Profit(loss) from ordinary
activities after tax
attributable to security holder: 242; (23.2%

Net profit(loss) attributable
to security holders: 242; (23.2%)


The Directors of Scott Technology Limited advise that the company earned an
audited operating surplus before tax of $392,000 on operating revenue of
$27.5 million for the year ended 31 August 2006. This compares to the
previous years surplus of $459,000 achieved on operating revenue of $40.3
million. The pre tax result for the first half of the financial year was a
loss of $1,407,000 and for the second half of the year a pre tax profit of
$1,799,000. The first half result reflected the pattern of the previous year.
Substantial project cash receipts during the year produced strong operating
cash inflows of $7.9 million.

In the prior year, deferred receipts and the provision of project financing
through the Government guaranteed Export Credit Office, resulted in reduced
operating cash flow and a high carrying value of work in progress. Much of
the operating cash received during the year was in the form of progress
payments on projects, which reduce the net work in progress shown in the
statement of financial position. Total shareholders equity at 31 August 2006
was $16.4 million, which is an increase of $2.6 million from February 2006
and reflects a significantly increased net profit and also the cyclical
revaluation of land and buildings of $1.4 million. The balance sheet as at 31
August 2006 is very strong, with no debt, cash in the bank of $6.2 million,
and significant working capital. In May 2006 the Directors of Scott
Technology Limited advised that the company had sold its Auckland division,
Package Handling Systems, to the management of that business. Scott
Technology purchased the business in 2002 to accelerate the diversification
of Dunedin's Automation Division, which subsequently was able to focus on
opportunities with automated meat processing systems. A review of the
Auckland Package Handling business determined that it did not fit with the
high technology development which Scotts is pursuing with our Appliance and
Meat Automation Systems. The sale included the land and buildings at Te Atatu
and yielded a modest surplus over book value.

The company enters the 2007 year with a high level of forward work and some
of the trading conditions that negatively impacted on the company's results
in the prior year have eased and is assisting the company's return to
sustainable profit growth. The Directors are confident of this continued
recovery and have declared a dividend of 3 cents per share, fully imputed,
payable on 30th November 2006. A high priority of the Board is a return to
appropriate twice-yearly fully imputed dividends.

Like all exporters we continue to face a fluctuating NZ dollar and we are
seeking to overcome this challenge by increasing our technical innovation and
expertise to improve the value of our technology to our customers which will
reflect in our margins. During the year production lines were shipped to
Russia, Turkey, Greece, Australia, China and the USA. We have also
strengthened the effectiveness of our international marketing team and this
is reflected in an increased level of customer enquiries, resulting in
qualified technical discussions.

Scott Technology is currently constructing one of its most technically
advanced production systems for a client which is positioned at the top end
of the USA appliance market. The company's diversification into meat and
robotics has progressed well, with systems operational in both Australia and
New Zealand. In line with previous years, research and development costs have
been fully expensed in the statement of financial performance.

Our joint venture with PPCS Ltd, Robotic Technologies Ltd, holds a patent
with two further patents pending, on our meat automation robotics and carcass
x-ray system. Further development work is planned for the 2007 year and will
be carried out in parallel with commercialisation of our earlier

To ensure continued growth, Scott Technology is dedicated to providing
innovative, state of the art, quality solutions to our customers. Our plans
include undertaking selected research and development in key areas that will
assist the company to keep ahead of the competition in our appliance and
automation sectors where we have leadership positions.
The company remains a niche, specialised supplier of design and build systems
and will seek out growth opportunities that utilise or add to our areas of
expertise. The Directors are confident of delivering a much improved
performance in 2007 and beyond.