SCL
11/12/2015 08:30
FORECAST
PRICE SENSITIVE
REL: 0830 HRS Scales Corporation Limited
FORECAST: SCL: Scales Corporation - Market update
SCALES CORPORATION UPGRADES 2015 EARNINGS GUIDANCE, LIFTS DIVIDEND
The directors of Scales Corporation Limited (NZX:SCL) have raised EBITDA
guidance, for the twelve months to 31 December 2015, to between $60 million
and $63 million, an increase over the prospectus forecast EBITDA ($41.2
million) of between 45 per cent and 53 per cent. The resulting underlying
NPAT is expected to be between $34.7 million and $36.8 million (compared with
the prospectus forecast of $20.8 million). Interim and special dividends
totalling 10.5 cents per share, fully imputed, have been declared and will be
paid in January 2016. The 2014 interim dividend was 3 cents per share.
Key 2015 highlights include:
o All divisions trading ahead of both 2014 actual results and prospectus
forecasts for 2015 .
o A particularly strong performance from the Horticulture division.
o Lower finance costs as a result of a better than expected debt position and
reduced interest rates.
o Interim 2015 dividend of 6.5 cents per share, and special dividend of 4.0
cents per share declared and to be paid on 20 January 2016.
Managing director Andy Borland says the company expects the financial results
from all divisions within Scales will be higher than the 2014 actual results
and the prospectus forecasts for 2015.
"This is an extremely pleasing outcome and I am incredibly proud of the hard
work and dedicated effort of the entire Scales team.
"Mr Apple started the year well with a record crop that included especially
strong volumes of premium varieties. As the year progressed we have
continued to benefit from our strong brand positioning in the markets we
operate in, as well as improvements in FX rates and better than usual
shipping rates. Proceeds from hail insurance also offset some loss of apple
volumes due to the hail events in the 2014/15 season.
"The Storage & Logistics division has continued to benefit from solid volumes
through the network driving improved utilisation. Our Auckland coldstore is
now open and is experiencing better than anticipated demand. Our bulk liquid
storage business is benefitting from a new long-term edible oil storage
contract, and our freight forwarding operation is continuing to attract new
business," Mr Borland says.
"The Food Ingredients division is likely to deliver a record sales year, both
in terms of volumes and revenue, and our juice concentrate activities have
been working 24/7 for the vast majority of the year.
"Finally, our balance sheet has never been stronger. By the end of the year
we expect our Average Net Debt will have reduced to between $33 million and
$36 million . Average Net Debt in 2014 was $40.8 million."
Chairman Jon Mayson says the directors have elected to increase the interim
dividend to 6.5 cents per share as a result of the stronger than expected
performance for the group.
"It is anticipated that a final dividend of the same amount will be declared
and paid in July subject, as always, to directors' approval at the time.
Furthermore, in recognition of exceptional aspects of 2015's financial
performance, a special dividend of 4.0 cents per share will also be paid on
20 January 2016," Mr Mayson says.
Looking ahead to 2016 the directors expect EBITDA to be between $48 million
and $55 million for the twelve month period. This lower level of financial
performance, compared to 2015, mostly reflects:
o the absence of hail insurance proceeds;
o a previously signalled return to more ordinary harvest volumes of
approximately 3.0m TCEs compared with 3.155m TCEs for the 2015 season; and
o provisions for reduced utilisation across the coldstore network.
A partial offset to these impacts will come from minor improvements in FX
rates.
"It should be noted however that overall group performance in this range for
2016 would be an improvement over prospectus forecasts for 2015 by between 16
per cent and 33 per cent," Mr Mayson says.
About Scales Corporation
Scales Corporation is a diversified agribusiness group. It currently
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 500 staff New Zealand wide. Find out more at
www.scalescorporation.co.nz.
Contact
Andy Borland, Managing Director, Scales Corporation Limited, Mob: 021 975
999, email: [email protected]
End CA:00274952 For:SCL Type:FORECAST Time:2015-12-11 08:30:10
