It ended the half-year to June 30 with more than $120 million in the bank against borrowings of just $64m. And it has about $30m more to come in trade payments than it owes to others.
Total assets jumped out to $622m from $443m a year earlier and it continues to look for new acquisitions.
The bottom-line profit for the half-year was $121.7m but a lot of it came from one-off deals, including a $73m after-tax gain from the sale of the Polarcold business.
Another $20.2m was booked on the sale of its Meateor NZ pet food business to a new joint venture company owned equally with Alliance – made up of $10.1m in sale gain and a similar amount in fair value gain.
Operating earnings (Ebitda) from the continuing businesses were $47.3m, compared to $47.1m at the corresponding time last year and the underlying after-tax profit was $30.1m, up from $29.4m.
The Mr Apple business in Hawke’s Bay is easily the biggest of Scales’ continuing businesses but the group is pushing hard into pet food and during the half-year it integrated the 60% of the Shelby business in the United States that it bought last year.
Mr Apple delivered an excellent outcome with volumes higher than forecast even though fruit size was smaller, managing director Andy Borland said.
He expects total export volumes to be similar to the record 2018 crop despite land being taken out of production so new, premium varieties can be planted. That totals 85ha in the 2019 and 2020 winters.
Apple volumes sold into Middle East and Asian markets, especially China, were notably higher at good prices.
Strong trading there was partially offset by a slower start in the Europe market where there has been a bigger than usual domestic crop.
The outlook there for next season suggests the impact will be played out this season, Borland said.
Mr Apple sales were $159.5m, up from $143.8m, with pretax earnings of $35.7m compared to $36.1m previously. Under accounting rules all unsold fruit has to be valued at the half-year as if it has been sold so the first-half is the main reporting period for the division.
The division’s own export tally was 3.82m cartons, marginally down on last year, but ahead of the forecast 3.62m. Premium exports including NZ Queen, Pink Lady and high-colour Fuji and Royal Gala rose to 2.09m cartons from 1.9m.
The food ingredients division traded solidly while the new business and structures were integrated with pleasing progress at Shelby, Borland said.
In NZ benefits in sharing customer networks and merging supply chains are starting to show.
The larger business had revenues higher at $80.7m, up from $45.5m. Pretax earnings were $24.5m including the one-off gains compared to $5.9m.
Scales owns the Shelby stake on its own, separate to the Meateor NZ business.
The logistics business traded ahead of last year, with revenue of $54.8m and pretax profit of $2.84m, up from $46.2m and $2.79m.
Scales chairman Tim Goodacre reaffirmed earlier guidance for an underlying full-year after-tax profit of between $32m and $37m, which would work out at an Ebitda of $49m to $55m.
Dividends are not typically announced with the trading results but Goodacre said the group is committed to the annual dividend level of not less that 19c a share while it remains in a net cash position.
