Scott Technology warns on margins

Last updated 05:00 13/02/2014

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Automated production systems manufacturer Scott Technology has warned tighter margins will hit its bottom line in the half-year trading period to the end of February.

The 100-year-old company specialises in the design and manufacture of automated production systems for mining, meat and superconductor industries.

Scott Technology provided the warning in a statement to the NZX yesterday with its shares closing down 7 cents to $1.75 after the release.

"We wish to advise that due to the fast-changing environment we are experiencing, it is appropriate to provide a trading update," it said.

Managing director Chris Hopkins said Scott Technology's revenue line remained solid and would not be materially different than the $26.8 million reported in the six months to February 28, 2013. There was still a month or two of sales to be accrued, meaning he could not provide a certain forecast at this point, he added.

Scott's order book was at good levels, providing it with a level of comfort over our forward work situation. "But the rapid appreciation of the New Zealand dollar, combined with the continuation of the global slowdown in the mining sector, is having an impact on our margins in the short term."

Scott Technology has offices in Dunedin and a manufacturing plant in Bromley in east Christchurch.

"Our sales and forward work are holding up reasonably well, but just real trouble with trying to maintain margins with the current environment and high dollar."

Hopkins said the company continued to review its operations with a view to mitigating the risk of further New Zealand dollar appreciation.

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- BusinessDay

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