Interesting pickup from SCC's Chairman's announcement of 07/11/2013. The exact words being “Notwithstanding the proposal on the table from K&S, the Board and management remain focused on identifying and assessing opportunities for growth both via new contracts won and merger and acquisition opportunities to continue to improve the scale and profitability of Scott Corporation.”
A A Scott Pty Ltd owned 50.42% of KSC as at 30 June 2013. The Estate of Mr A A Scott owned 53.76% as at 5 September 2013. There are other Scott-family shareholdings in KSC – for example, Leigh Winser is the son-in-law of the late A A Scott, and he controls a fair shareholding.
Tony Johnson is the Chairman of both SCC and KSC. There are two or more additional KSC directors linked to SCC, and a search of the word “Scott” in the Annual Report will show that there are strong business connections – for instance “Transactions with these companies [i.e. Scott Group] include sale and purchase of cartage services, advertising services, sale and purchase of fuel and other related products. First Radio Pty Ltd has an interest in a transport facility in Adelaide which the Company rents on a commercial basis. Rent in 2013 was $388,350 (2012: $376,249).”
I am unsure what the proposal referred to by the SCC Chairman is – it could be some form of merger, acquisition or extension of co-operation, but as far as I am aware K&S Corporation (KSC) has remained silent on the matter. Like many companies one can find the usual reference to growth options, including acquistions, in KSC's outlook statement. The exact words being:
“We will continue to grow the business through: – Organic growth – Tenders – Acquisitions”
Also, the blurb at http://www.adelaidenow.com.au/business/sa-business-journal/ks-corporation-eyes-acquisitions/story-e6fredel-1226485980061 makes it patent that the MD, is very interested in bolt-on acquisitions.
KSC Price at posting:
$1.68 Sentiment: Hold Disclosure: Held
