# SCD - Scantech Limited



## Country Lad (20 August 2013)

Listed in 1987 yet not even a thread on this company even though it is trading at prices not seen for 13 years and has been around 12 month highs since the results announcement in July.

From Bell Potter, 



> Scantech Limited (SCD) focuses on manufacture and marketing of scientific and industrial instruments principally for resource sector including cement, coal and mineral industries. SCD also provides consulting services to the coal industry and in-field support of scientific and instruments. The Company currently operates 930 systems installed in over 55 countries worldwide.




Interim results were presented in the usual understated way.  A 47% increase in profit before accounting for the work in progress which lifted that profit increase over last year to 91%. 

The main issue with this one is not being liquid with only 17.5 million shares on issue and an average (last 20 days) turnover of only about $30,000 per day. 

Cheers
Country Lad


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## piggybank (20 August 2013)

Since my daily scan (52 weeks high) as had the stock come up virtually every day as well as some others like VLD, SHV, ETC but they all had one thing is common - liquidity.............


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## skyQuake (20 August 2013)

Country Lad said:


> Listed in 1987 yet not even a thread on this company even though it is trading at prices not seen for 13 years and has been around 12 month highs since the results announcement in July.
> 
> From Bell Potter,
> 
> ...




Its got a 17m mkt cap but it made 4.4mil... What?

Pity about the liquidity though


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## piggybank (20 August 2013)

skyQuake said:


> Its got a 17m mkt cap but it made 4.4mil... What?




Here is the media release:-

http://stocknessmonster.com/news-item?S=SCD&E=ASX&N=745967


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## piggybank (1 October 2013)

Up 40% since C/L's started the thread in August.

Judging by his recent posting on various stocks I think he has found the Holy Grail on his travelling holidays!!


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## skc (31 January 2014)

July 2013. Announced NPAT of $4.44m. Share price ran from 40c to $1.40.

Yesterday. Announced NPAT for H1 to be a loss of $0.5m. Share price coming back down to 50c.

These guys are in the business of process control... but the swing in their performance (and share price) seems a bit out of control.


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## Klogg (31 January 2014)

skc said:


> These guys are in the business of process control... but the swing in their performance (and share price) seems a bit out of control.




Their fixed costs seem to be the problem and the reason for the wild swings. If you compare last years expenses to the previous 3 years, it's not that large a difference, even though they're producing a greater amount of analysers (main cost is with maintaining/refreshing IP here, not the manufacturing)
The key to this though isn't the near term profits... It's the combination of large cash reserves and service revenue which comes off the back of new installations.

That said, to properly value this one, you'd need to take average earnings as the swings are too large in 12month blocks... (If it were possible, they're better off reporting in 2 or 3 year blocks).


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## skc (31 January 2014)

Klogg said:


> That said, to properly value this one, you'd need to take average earnings as the swings are too large in 12month blocks... (If it were possible, they're better off reporting in 2 or 3 year blocks).




Without knowing too much about the company, and assuming that share price tends to follow short term earnings fluctuations... you'd conclude that the last profit (and hence share price spike) was an abnormality.


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## Klogg (31 January 2014)

skc said:


> Without knowing too much about the company, and assuming that share price tends to follow short term earnings fluctuations... you'd conclude that the last profit (and hence share price spike) was an abnormality.




Agreed it was, and if anyone bought it based solely on last year's profit they'd be making a big mistake...

And yes, it does tend to follow short term earnings, but with less volatility than the recent SP spike, as is evident in your chart (although earnings have never been as large as last years')


Another little nugget about this one (totally unrelated to last year's earnings) - they actually have accumulated losses and cannot pay franked dividends until these losses are wiped clean (they did however, return capital @ 10cps). Once that's done, you'll have a ~11m market cap company (at 60c per share), holding about 6mil in net cash... I can see a case for a 100% payout ratio at that point (which will cause another SP spike IMO).

To be honest, I was hoping the drop was more severe and we'd have a net net working capital situation on our hands.


P.S. I don't know the specific tax law in relation to franked dividends and accumulated losses - but I know I've read it somewhere!


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## skc (31 January 2014)

Klogg said:


> Agreed it was, and if anyone bought it based solely on last year's profit they'd be making a big mistake...
> 
> And yes, it does tend to follow short term earnings, but with less volatility than the recent SP spike, as is evident in your chart (although earnings have never been as large as last years')
> 
> ...




They did pay tax last year but they also have accumulated losses so not sure how to make sense of the tax situation myself. And thanks for pointing out about their cash holding... I always look at the "Cash" item while term deposits are hiding under "Investments" on the balance sheet.


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## Hoborg (30 June 2014)

All, 

Scantech have just announced that they will: 



> reduce the share capital of the Company in accordance with Section 258F of the Corporations Act, effective as at 30 June 2014. The amount of the capital reduction is $7,838,203 and will be reflected in the Company’s financial report for the year ended 30 June 2014




(See full announcement here:
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01529741)


According to the ASIC site (http://www.asic.gov.au/asic/asic.nsf/byheadline/Reduction+in+share+capital?openDocument), this states:



> A reduction of share capital occurs when any money paid to a company in respect of a member's share is returned to the member.




Does this mean they're simply returning capital to shareholders?
If so, how does this effect the losses on the balance sheet?

I'm a little confused...


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## System (21 October 2015)

On October 19th, 2015, Scantech Limited (SCD) was removed from the ASX's official list under Listing Rule 17.11, and in accordance with a timetable agreed with ASX Limited to facilitate its removal from the official list of ASX.


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