Full Year Result Forecast
12:00AM, 28 Jul 2005 | FORECAST
REPORT TO THE NEW ZEALAND STOCK EXCHANGE
The Directors of Scott Technology Ltd advise that subsequent to previous
releases to the Stock Exchange dated 2nd June 2005 and 17th June 2005 the
Company's result for the full year to 31 August 2005 is expected to be
substantially lower than the profit for the half year.
Scott Technology continues to have a high work load which has necessitated a
larger than normal level of sub-contracting at higher than anticipated cost
due to the very buoyant New Zealand Engineering market. The Company's year
end result will be impacted by these sub contract costs, the high level of
the New Zealand dollar, and by cost over runs on a major offshore appliance
Scott Technology has now shipped one of the largest and most technically
advanced appliance lines ever built by the Company and the complexity of this
project has involved significant costs in excess of the project budget.
Whilst this has negatively impacted our second half year results the
technology developed will enable value to be created in future projects of
Scott Technology is emerging from a business period which has involved
unprecedented research and development costs both in the meat industry
projects and the advanced technology appliance lines and the Company
continues to expense all these development charges.
Scott Technology designs and manufactures world class machinery as evidenced
by the high level of current work and strong enquiry globally, including an
improving North American market.
Scott Automation centres at Dunedin and Auckland continue to be profitable.
This Division has strong forward orders and is in the final stages of
negotiation to supply several Robotic Meat Processing Lines for the
Australian Market in association with Meat & Livestock Australia.
Like most exporting companies Scott Technology is going through challenging
times but the Directors are confident that the company's recent substantial
investment in non appliance sectors involving new technology and the cost
reduction and margin improvement program, should enable satisfactory returns
to be achieved in the medium term.