'Solid' result for Scales in difficult year

By Simon Hartley

Scales' overall apple and pear exports were maintained at 3.55 million tray carton equivalents. Photo / File
Scales' overall apple and pear exports were maintained at 3.55 million tray carton equivalents. Photo / File

Despite a challenging growing season for diversified agribusiness Scales Corporation, its revenue grew 7% to a record $399.1 million, while profits eased 16% to $38.2 million, for its year's trading to December.

Scales chairman Tim Goodacre said, as signalled at the half year, the Hawke's Bay region experienced a ''difficult growing season''.

''This is a very satisfying result in light of a challenging growing season and some competitive trading conditions,'' he said in a statement.

Scales shares are up more than 30% on a year ago and were down slightly at $4.51 after yesterday's announcement.

Craigs Investment partners broker Peter McIntyre described the result as ''solid'' and slightly ahead of expectations.

''The strong result comes against a backdrop of what has been a challenging year for its horticulture division, given difficult harvest conditions,'' Mr McIntyre said.

Scales' overall apple and pear exports were maintained at 3.55 million tray carton equivalents.

Mr Goodacre said the 2018 apple harvest had already begun and ''early indications are positive''.

Mr McIntyre said the 2018 harvest was up to 10 days ahead of last year's, which was important given the wet weather experienced with the passing of ex-cyclone Gita across much of the country.

He noted there was no change of guidance from Scales, and earnings before interest, tax, depreciation and amortisation were still in a range of $58 million to $65 million.

Craigs was picking $64 million.

Scales' managing director, Andy Borland, said there was $13.5 million capital expenditure invested during the year and net debt at December was $40.8 million.

''Our strong financial position and low gearing enables us to react quickly and confidently to potential strategic acquisitions and other opportunities,'' he said in a statement.

- Otago Daily Times

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