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Half Year Results for six months ended 28 February 2010

12:00AM, 31 Mar 2010 | HALFYR

DIRECTORS' REPORT

Financial Commentary

The Group's unaudited result for the six months ended 28 February 2010 was a
net profit before tax of $1.4 million, compared to an unaudited loss before
tax of $0.7 million for the six months ended 28 February 2009.  Group revenue
for the six months was $20.3 million, compared to Group revenue of $13.5
million for the six months ended 28 February 2009.  A pleasing aspect of the
first six months' result is the strong positive cashflow from operations of
$1.6 million.

Review of Operations

The improved performance and trading conditions that we saw in the second
half of 2009, continued into the first half of 2010.

During this period we have been successful in securing significant system
sales within the Appliance, Precious Metals and Meat Processing markets.
Contracts for new projects destined for Australia, Brazil, China, Chile and
the USA have stretched our capacity to a point where we have a requirement
for additional resources.  In addition to these new projects, we have been
working on, and completing, production lines for customers in Australia,
Turkey, USA and Spain.

We continue to see increased activity within our meat processing market and
this has been boosted by the establishment of Scott Technology Australia Pty
Ltd in Sydney.  An Australian General Manager has been appointed who has
significant experience in the meat industry, both within Australia and
worldwide.  Development work is carrying on to extend our product offering
and world leading technology.  This is in addition to the rollout of our
commercialised systems and we are pleased to report another X-Ray Primal
System was successfully installed at a New Zealand meat processing plant
during this period.

The past six months has seen an uplift in the global appliance market with
enquiries increasing toward normal levels.  We are also seeing this in our
minerals and precious metals markets where the strong combination of
Rocklabs' industry experience with Scott's expertise in large automated
systems is being recognised by the market.

Dividend and Bonus Issue

In late March the Directors paid an interim dividend of 1.25 cents per share,
together with a 1 for 10 non-taxable bonus issue which also participated in
the dividend.  This reflects the Directors' confidence in the growth and
trading ability of the company supported by the underlying strength of the
company's balance sheet.

With a strong balance sheet, improved trading conditions and a talented team
of people, we are positioned to deliver on a growing level of current work
and future prospects.  We continue to assess business and growth
opportunities and will progress those where there is a positive impact on
earnings and where strong synergies exist.

Stuart J McLauchlan                     Christopher C Hopkins
Chairman                Managing Director