Scott Tech tips healthy forward orders
Scott Technology says despite the difficult state of the world's financial markets the export-based manufacturer it is close to securing nearly $15 million of forward orders.
Chairman Stuart McLauchlan told shareholders at the company's annual meeting that orders were holding up despite the international problems and a tough economic environment in New Zealand.
''I was able to announce at last year's annual meeting in Christchurch the successful confirmation of $14.5 million of forward work,'' McLauchlan told shareholders in Dunedin.
''I am able to report today we are in final negotiations and close to securing additional contracts of US$11.5m ($14.8m) in the appliance manufacturing division. This additional work and the work on hand will continue the very strong position the company has ended the 2011 financial year well into 2012.''
McLauchlan said 2011 marked Scott Technology's 99th year in business having been founded in Dunedin in 1913, and the manufacturer now a very different company to that of five years ago. It now generated 89 per cent of its revenue's from outside New Zealand and had diversified its product range.
This was necessary as its traditional appliance manufacturing business did not produce consistent earnings and shareholder returns. The company had changed through acquisition and organic growth, and was positioned for more reliable earnings in the future.
This diversification was into the five areas the company operated in: appliance manufacturing, meat processing, laboratory sample preparation, industrial automation, and high temperature superconductors.
Scott Technology had formed some very strong relationships with large industry players who had recognised its automation skills, allowing growth to occur over the coming years.''
McLauchlan said as previously stated it was important the economic settings in New Zealand were conducive to making the New Zealand economy competitive. ''Unfortunately this has not happened and we are now at the crossroads, high debt, low capital, skills deficits, low growth, and outward migration of New Zealanders.
''New Zealand's low savings and continued external deficits are putting our economy in a vulnerable position especially with the extreme events we are witnessing in Europe.''
However, the re-election of a National-led coalition with a mandate to restructure the economy away from consumption and toward investment in the export and wealth generating sectors of the economy, should see Scott Technology given a very sound platform, he added.