SCT - Scott Tech

[Snoopy]

Snoopy wrote:
"Care to name some names Mr Hog? How many years do you think it will be until Rakon recovers to their listing price? What about FPA and their enormous destruction of shareholder wealth by being caught out when moving their production lines offshore? FPH are doing OK but with a PE of 27 or something, that doesn't look a very good place to put my export money. Wellington Drive Technologies has an endless history of losses. Windflow Technologies have likewise never returned their shareholders any profits (because they are loss making)."

The hog was maybe a bit quick off the mark. How about "Keeping an eye on the technical side of things for your chosen exporters would be a consideration worthy of your time." ?

But yes, RAK and FPH have potential - in the right circumstances - to provide good capital growth.

The problem is Mr Hog, these are the same kind of thoughts that I was thinking about Scott Technology and Fisher and Paykel (as it was then, a combined group) in 1997.

I don't want to leave the wrong impression on this thread. I went into SCT for the purpose of receiving ever increasing dividend income through company growth and this objective has not been achieved. Am I content with this situation? No. Do I know of any listed exporter that has done significantly better over the past twelve years ? No

So what does this tell me? Do we have an 'exporter' problem? Is there something 'company specific' wrong with the way SCT has been managed over the last twelve years? Perhaps, although Chairman Marsh's low to no debt policy was a big help during the credit crunch. The direction of management has changed in the last couple of years so it is not as if the company is doing nothing. Whether it is doing enough remains to be seen.

I heard a representative of Rakon on the radio this morning bleating about the high exchange rate and how they are having to make more and more of their chips overseas. He didn't have any answers for what he wanted the government to do. But he admitted that as long as Rakon is just an 'input cost' on the the manufacturing sheets of large cellphone manufacturers, margins will remain under pressure. Needless to say I am not tempted to invest in Rakon.

SNOOPY

discl: hold SCT