NZSE:SCL

Stock Analysis Report

Executive Summary

Scales Corporation Limited engages in the agribusiness activities in New Zealand.

Snowflake

Fundamentals

Flawless balance sheet with proven track record.

Share Price & News

How has Scales's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0.2%

SCL

0.2%

NZ Food

0.09%

NZ Market


1 Year Return

9.1%

SCL

6.6%

NZ Food

18.9%

NZ Market

Return vs Industry: SCL exceeded the NZ Food industry which returned 6.6% over the past year.

Return vs Market: SCL underperformed the NZ Market which returned 18.9% over the past year.


Shareholder returns

SCLIndustryMarket
7 Day0.2%0.2%0.09%
30 Day3.1%4.0%2.0%
90 Day7.9%-11.4%2.9%
1 Year14.5%9.1%8.3%6.6%24.1%18.9%
3 Year89.7%62.4%59.9%46.5%55.1%34.8%
5 Year376.5%250.7%92.2%57.8%104.3%58.5%

Price Volatility Vs. Market

How volatile is Scales's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Scales undervalued compared to its fair value and its price relative to the market?

15.19x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: SCL (NZ$5.05) is trading above our estimate of fair value (NZ$4.45)

Significantly Undervalued: SCL is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SCL is good value based on its PE Ratio (15.2x) compared to the Food industry average (18.4x).

PE vs Market: SCL is good value based on its PE Ratio (15.2x) compared to the NZ market (18.5x).


Price to Earnings Growth Ratio

Low PEG Ratio: SCL's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: SCL is overvalued based on its PB Ratio (2x) compared to the NZ Food industry average (1.1x).


Next Steps

Future Growth

How is Scales forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

-2.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SCL's earnings are forecast to decline over the next 3 years (-2.1% per year).

Earnings vs Market: SCL's earnings are forecast to decline over the next 3 years (-2.1% per year).

High Growth Earnings: SCL's earnings are forecast to decline over the next 3 years.

Revenue vs Market: SCL's revenue (0.1% per year) is forecast to grow slower than the NZ market (4.2% per year).

High Growth Revenue: SCL's revenue (0.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: SCL's Return on Equity is forecast to be low in 3 years time (13.6%).


Next Steps

Past Performance

How has Scales performed over the past 5 years?

8.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: SCL's earnings have grown by 8.9% per year over the past 5 years.

Accelerating Growth: SCL's earnings growth over the past year (60.9%) exceeds its 5-year average (8.9% per year).

Earnings vs Industry: SCL earnings growth over the past year (60.9%) exceeded the Food industry -3.4%.


Return on Equity

High ROE: SCL's Return on Equity (13.5%) is considered low.


Return on Assets

ROA vs Industry: SCL has a higher Return on Assets than the Food industry average last year.


Return on Capital Employed

ROCE Improving: SCL's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Scales's financial position?


Financial Position Analysis

Short Term Liabilities: SCL's short term assets (NZ$320.1M) exceeds its short term liabilities (NZ$109.6M)

Long Term Liabilities: SCL's short term assets (320.1M) exceeds its long term liabilities (152.5M)


Debt to Equity History and Analysis

Debt Level: SCL's debt to equity ratio (18.4%) is considered satisfactory

Reducing Debt: SCL's debt to equity ratio has reduced from 57.2% to 18.4% over the past 5 years.

Debt Coverage: SCL's debt is well covered by operating cash flow (48.3%).

Interest Coverage: SCL's interest payments on its debt are well covered by EBIT (10.7x coverage).


Balance Sheet

Inventory Level: SCL has a high level of physical assets or inventory.

Debt Coverage by Assets: SCL's debt is covered by short term assets (assets are 4.821390x debt).


Next Steps

Dividend

What is Scales's current dividend yield, its reliability and sustainability?

3.76%

Current Dividend Yield


Dividend Yield vs Market

company3.8%marketbottom25%3.0%markettop25%5.6%industryaverage4.1%forecastin3Years4.2%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: SCL's dividend (3.76%) is higher than the bottom 25% of dividend payers in the NZ market (3.03%).

High Dividend: SCL's dividend (3.76%) is low compared to the top 25% of dividend payers in the NZ market (5.61%).

Stable Dividend: Whilst dividend payments have been stable, SCL has been paying a dividend for less than 10 years.

Growing Dividend: SCL's dividend payments have increased, but the company has only paid a dividend for 5 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (28.6%), SCL's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SCL's dividends in 3 years are forecast to be covered by earnings (82.6% payout ratio).


Next Steps

Management

What is the CEO of Scales's salary, the management and board of directors tenure and is there insider trading?

8.2yrs

Average management tenure


CEO

Andy Borland 0

0yrs

Tenure

0

Mr. Andrew James Borland, also known as Andy, has been the Chief Executive Officer of Scales Corporation Limited since joining in September 2007 and has been its Managing Director since 2011. Mr. Borland s ...


Management Age and Tenure

8.2yrs

Average Tenure

Experienced Management: SCL's management team is seasoned and experienced (8.2 years average tenure).


Board Age and Tenure

3.8yrs

Average Tenure

Experienced Board: SCL's board of directors are considered experienced (3.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown


Management Team

  • Andrew van Workum

    Chief Executive Officer of Mr Apple

    • Tenure: 0yrs
  • Steve Kennelly

    Chief Financial Officer

    • Tenure: 0yrs
  • Andy Borland

    CEO, MD & Executive Director

    • Tenure: 0yrs
  • Kent Ritchie

    Chief Executive Officer of Scales Logistics

    • Tenure: 0yrs
  • Hamish Davis

    Managing Director - Fern Ridge

    • Tenure: 11.8yrs
  • John Sainsbury

    Chief Executive Officer of Meateor Foods

    • Tenure: 4.6yrs
  • Karen Morrish

    Group Health & Safety

    • Tenure: 2.8yrs
  • Brett Frankel

    President - Shelby Foods

    • Tenure: 12.8yrs

Board Members

  • Mark Hutton

    Non Executive Independent Director

    • Tenure: 8.8yrs
    • Compensation: NZ$92.00k
  • Tomakin Lai (52yo)

    Non Executive Director

    • Tenure: 0.8yrs
  • Alan Isaac

    Non Executive Independent Director

    • Tenure: 5.3yrs
    • Compensation: NZ$95.00k
  • Tim Goodacre

    Non Executive Independent Chair

    • Tenure: 2.3yrs
    • Compensation: NZ$131.00k
  • Andy Borland

    CEO, MD & Executive Director

    • Tenure: 0yrs
  • Nick Harris

    Non Executive Independent Director

    • Tenure: 5.3yrs
    • Compensation: NZ$80.00k
  • Nadine Tunley

    Non-Executive Independent Director

    • Tenure: 0.7yrs

Company Information

Scales Corporation Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Scales Corporation Limited
  • Ticker: SCL
  • Exchange: NZSE
  • Founded: 1897
  • Industry: Packaged Foods and Meats
  • Sector: Food, Beverage & Tobacco
  • Market Cap: NZ$714.975m
  • Shares outstanding: 141.58m
  • Website: https://scalescorporation.co.nz

Number of Employees


Location

  • Scales Corporation Limited
  • 52 Cashel Street
  • Christchurch
  • 8013
  • New Zealand

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SCLNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDJul 2014
S05DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 2014

Biography

Scales Corporation Limited engages in the agribusiness activities in New Zealand. The company operates through Food Ingredients, Horticulture, and Logistics segments. The Food Ingredients segment processes ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/15 10:39
End of Day Share Price2019/10/15 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.