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Scott Technologies in a 'sweet spot'

NZ Newswire logoNZ Newswire 6/04/2017 Rebecca Howard

Scott Technologies posted a 48 per cent jump in first-half profit and chief executive Chris Hopkins says a global drive for increased automation means the industrial robotics firm is in a "sweet spot".

Net profit was $2.89 million in the six months ended February 28 versus $1.95m a year earlier, the Dunedin-based company said in a statement. Revenue was $56.7m, up 32 per cent on the year.

Mr Hopkins told BusinessDesk the increased revenue was on the back of increased demand across all industries for automation in the segments where it operates.

That include appliances, meat processing, mining, high-temperature superconductor products, and other industrial automation including robotics.

"It's a general trend which we have seen pick up. There is a lot of talk about automation and robotics. We are in a reasonably sweet spot at the moment," he said.

Growth continued in the meat processing sector and Mr Hopkins said the mining sector is showing signs of recovery, driven by the general environment in the mining and commodities sector.

Another strong growth area comes from new products, he said.

Scott Technologies invests 5-to-10 per cent of its turnover on research and development, although Mr Hopkins said it's hard to quantify as much of the development is driven by customer demand for increased automation to improve productivity, quality and to offset a decline in available labour.

He declined to provide any specific guidance for the full year but said the interim dividend of 4 cents a share reflects the strong operating cash flow in the first half and the directors' confidence for a "strong full-year result".

The stock was up 4.3 per cent at $2.92 and has gained 73 per cent over the past year.

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