Thursday, March 28, 2024

Scales hikes interim dividend

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Scales Corp will pay a bigger interim dividend than a year ago and says it might exceed annual earnings guidance with all its units tracking ahead of 2017.
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The board declared a fully imputed dividend of 9.5 cents a share, up from 9 cents a year earlier, and said earnings before interest, tax, depreciation and amortisation will be at the top end of or slightly exceed the guidance of $58 million to $65m.

Scales singled out a record apple export crop from its Mr Apple division and increased volumes in its food ingredients operations though all divisions are trading ahead of the year-earlier period. 

“This is an excellent performance for the group, further building on the initiatives within each business unit,” managing director Andy Borland said. 

“All businesses and divisions have traded very positively during 2018 and provide a high level of confidence as the group looks to execute our refreshed growth strategy.”

Scales is still waiting for Overseas Investment Office approval for the sale of its Polarcold cold storage unit. It also sold bulk liquids storage division Liqueo in the year. The two sales are expected to provide $130m cash.

The Christchurch-based company wants to use the money to buy agri-businesses more closely aligned with the rest of its portfolio and has indicated it’s interested in businesses that are fully vertically integrated, export-focused and can benefit from the firm’s relationships in China. 

Scales is making inroads on a number of its growth plans and some might be finalised in the near-term. 

The directors hope to provide 2019 earnings guidance and provide an update on the Polarcold sale and growth plans in the annual earnings report in February.

The shares last traded at $4.40 and have declined 8% so far this year, lagging behind a 5.6% gain on the S&P/NZX 50 index. – BusinessDesk

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