SCL
29/08/2014 08:30
HALFYR
REL: 0830 HRS Scales Corporation Limited
HALFYR: SCL: 2014 Interim Results Announcement
SCALES' HALF YEAR REVENUES UP ACROSS ALL DIVISIONS: FULL YEAR FORECAST
REAFFIRMED.
Scales Corporation (NZX:SCL) today reported its half year result. Net profit
after tax was $20.6 million for the six months ended 30 June 2014. The
company affirms its full year 2014 prospectus forecasts.
Highlights of the result include revenue increases in all divisions with Mr
Apple export volumes 7.0 percent above forecast. Total group revenue was
$150.2 million, up 3.4 per cent on 2013.
Net profit before tax, excluding discontinued operations, was $28.9 million
compared to $33.7 million in 2013. The reduction in interim profit reflected
costs associated with the recent NZX listing together with lower apple
prices, which were expected.
The 2014 forecast for net profit before tax is $22.5 million as the seasonal
nature of the Scales business and inventory valuation principles means first
half profit before tax tends to be higher than the full year results.
Improved operating cash flows enabled Scales to halve forecast net working
capital facility debt to $11.6 million. As a consequence Average Prospective
Net Debt was now forecast to be $38.2 million, an improvement on the
Prospectus forecast.
Scales Corporation Chairman Jon Mayson says overall the first half results
were in line with expectations, "We have hit our targets and expect to remain
on track to meet the prospectus guidance for the full year result.
"On the balance sheet, non-current assets were reduced because of the
demerger of the investments division during the half year while trade and
other receivables were around $10 million lower because of improved customer
collections," Mr Mayson says.
Divisions
Scales Corporation managing director Andy Borland says the horticulture
division's Mr Apple business lifted export volumes by 7.0 per cent compared
to forecast, a pleasing result considering the record crop in 2013.
The anticipated softening of European apple prices, which has eventuated in
the latter part of the current season, is expected to be offset by higher
early season prices achieved and the increased volumes.
Scales Corporation's storage and logistics division increased revenues by $2
million to nearly $61 million while food ingredients division revenues were
also up $2 million to the end of June 2014.
Looking ahead Mr Borland says ongoing performance is underlined by a number
of positive developments.
"We are continuing to develop our presence in Asia and other near markets,
aided by the fact that we expect premium variety apple plantings to yield
increased volumes for 2015. Also, together with a group of other primary
sector New Zealand exporters, we are establishing ServeCo, a collaborative
venture based in Shanghai which is designed to assist the partners' trade
into China," Mr Borland says.
"Our proposed cold store expansion into the Auckland market is a significant
venture. The Polarcold facility, to be established in Ports of Auckland's
intermodal freight hub in Wiri, will increase our total cold store capacity
by 16 per cent. Fonterra is taking 50 per cent of the space under a long-term
agreement."
Construction of the 8,700 square metre facility is expected to begin later
this year and become operational in the third quarter of 2015.
Scales Corporation issued its prospectus in June 2014 and shares began
trading on the New Zealand Stock Exchange on 25 July 2014.
Contacts:
Andy Borland, Managing Director, Scales Corporation Limited,
DDI: 0-3-371 0345, Mob: 021-975 999, email:
[email protected]
About Scales Corporation
Scales is an established agribusiness market leader with long standing
customer relationships, efficient operating systems and an experienced
management team. 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 primary 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:00254554 For:SCL Type:HALFYR Time:2014-08-29 08:30:10
