This report is an updated version of the report published on 19^th June 2025 at 5:31 PM (GMT +12)

Scott Technology Limited

Scott Technology Limited (NZX: SCT) is mainly engaged in the design, manufacture, sales and servicing of automated and robotic production lines and processes for several industries in New Zealand and abroad.

Recommendation Rationale – Sell at NZD 2.03

• Revenue for H1 FY 2025 declined 14% YoY to $122 Mn as a result of challenging economic landscape as well as subdued order intake across FY 2024.
• SCT’s NPAT was at $4.3 Mn, remaining relatively flat against pcp, with reduced EBITDA being offset by lower amortisation, interest and tax. Notably, the prior period also consisted non-recurring costs for the strategic review.
• The company’s margin expanded to 29%, demonstrating 270 bps improvement. This was driven by its strategic focus towards profitable projects and service mix. However, the decline in revenue, resulted in operating EBITDA of $12.2 million, a decline of 27% from pcp.

SCT’s Daily Price Chart

Fundamental Valuation

Considering the increasing volatility over global equity market, inflationary pressures, geopolitical tensions, etc. the company’s stock might trade at slight discount. For the valuation, peers such as Skellerup Holdings Ltd (NZX: SKL), Fletcher Building Ltd (NZX: FBU), etc. were considered.

Given its current trading levels, and risks associated, it is prudent to book profit at the current levels.

Hence, a ‘Sell’ rating has been provided on the stock at the current price of NZD 2.03 per share (New Zealand Time: 3:30 PM, GMT +12) as on 19 June 2025.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 19 June 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.