SCL
26/02/2015 08:30
FLLYR
PRICE SENSITIVE
REL: 0830 HRS Scales Corporation Limited
FLLYR: SCL: 2014 Annual Results announcement
SCALES CORPORATION EXCEEDS IPO FORECASTS.
Highlights:
- FY2014 financial results above IPO forecasts:
- Underlying EBITDA $39.8million, 2.7 per cent above IPO forecast.
- Underlying Net Profit1 $19.8million, 6.7 per cent above IPO forecast.
- Net Profit for the Year (including discontinued operations, non-cash IFRS
adjustments, and offer costs) $18.4million, 15.4 per cent above IPO forecast.
- Horticulture benefits from higher than expected apple volumes and prices.
- Current investment in Storage & Logistics will underpin medium-term revenue
growth and cost efficiencies.
- Food Ingredients secures geographical diversification of supply source.
Diversified agribusiness group Scales Corporation (NZX:SCL) today reported
its full year result exceeding its FY2014 IPO forecasts.
At $18.4 million net profit after tax was 15.4 per cent above forecast while
underlying EBITDA, at $39.8 million was 2.7 per cent above forecast.
Scales Corporation chairman Jon Mayson says "it's a very good result
highlighting the strength of Scales' diversified agribusiness portfolio.
"The Horticulture and Food Ingredients divisions materially exceeded their
prospectus forecasts, with stronger than anticipated volumes and market
prices.
"The Storage & Logistics division loaded in higher than forecast volumes, but
strength in demand for international food commodities drove record product
throughput." Mr Mayson says.
"The coldstore team worked very hard to meet tight product turnaround cycles
and meet customers' expectations, solidifying our No.1 position for
independent cold storage.
"On the balance sheet we managed to maintain our lower than forecast average
net debt position which enabled us to declare and pay a three cent dividend
in December, six months earlier than forecast," Mr Mayson says.
Divisions
Scales Corporation managing director Andy Borland says the horticulture
division performed very strongly producing an underlying EBITDA of $23.9
million, 6.2 per cent higher than the IPO forecast. The result was
principally due to 7.1 per cent higher than forecast apple volumes selling
for an average price that was 2.2 per cent above forecast.
"We achieved higher than expected apple volumes across both premium and
traditional apple varieties. We are particularly focused on maximising the
quality of our apples and are constantly reviewing our orchard techniques and
technology employed to drive improvements in the quality and quantity of
premium apples." Mr Borland says.
"The Mr Apple brand is becoming increasingly recognised for its high quality
fruit. Our premium apples were sold for an average price that was 7.5 per
cent higher than our IPO forecasts and once again up on the previous year.
This result reflects the hard work of the Mr Apple team and the strength of
the Mr Apple brand."
Mr Apple expects to have a further 450,000 cartons of premium apples to sell
by 2018as historical orchard redevelopment matures. Mr Borland notes that
"as our premium orchard matures premium apple volumes will increase by 43%
over current levels. A large portion of these apples will be sold into Asian
and Middle Eastern markets.
"As such, we continue to work hard to develop the Mr Apple brand in these
markets. A further initiative undertaken during 2014 was to pool resources
with other leading New Zealand agribusiness exporters to incorporate Primary
Collaboration New Zealand (Shanghai) Co. Limited to help grow our presence in
China." This company is chaired by Mr Borland.
"Scales Corporation's storage and logistics division achieved its IPO revenue
forecast, but with record product turnaround cycles and a later start to the
2014 cropping and meat processing seasons, EBITDA was 11.8 per cent lower
than forecast at $12.3 million.
"However, these international dynamics benefitted the horticulture and food
ingredients divisions, demonstrating the value of our diversified portfolio.
Furthermore, the storage and logistics division is positioned strongly to
benefit from a number of growth initiatives for the short to medium term." Mr
Borland says.
He says substantial work is taking place within the storage and logistics
division to expand capacity to handle customer's volume needs and to replace
old equipment to achieve cost efficiencies.
"During 2014 we commenced an upgrade of our refrigeration equipment in our
Timaru coldstore, continued the upgrade of our Timaru bulk liquid storage
facilities, began development of our substantial Auckland coldstore, and
completed a Warehouse Management software upgrade throughout our North Island
coldstores to extend our capabilities in the fast moving consumer goods
categories."
The food ingredients division recorded an EBITDA of $5.6 million, 43.5 per
cent higher than forecast due to higher than expected volumes in a market
place where pricing generally remained firm.
Looking ahead Mr Borland says that "Scales is very well positioned to deliver
growth for the short-to-medium term as historical and current investment
initiatives mature".
Scales Corporation issued its prospectus in June 2014 and shares began
trading on the New Zealand Stock Exchange on 25 July 2014.
Contact:
Andy Borland, Managing Director, Scales Corporation Limited,
DDI: 03 371 0345, Mob: 021 975 999, email:
[email protected]
About Scales Corporation
Scales is a diversified agribusiness portfolio. It comprises three operating
divisions: Horticulture, Storage &Logistics and Food Ingredients. The
company's diverse spread of activities gives Scales broad exposure to New
Zealand's agribusiness sector. Scales was founded in 1897 as a shipping
business by George Herbert Scales. Today it employs more than 400 staff New
Zealand wide. Find out more at www.scalescorporation.co.nz
End CA:00261142 For:SCL Type:FLLYR Time:2015-02-26 08:30:45
