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Scales

NZSE:SCL
Snowflake Description

Flawless balance sheet with proven track record.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
SCL
NZSE
NZ$664M
Market Cap
  1. Home
  2. NZ
  3. Food, Beverage & Tobacco
Company description

Scales Corporation Limited engages in the agribusiness activities in New Zealand. The last earnings update was 140 days ago. More info.


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SCL Share Price and Events
7 Day Returns
0.2%
NZSE:SCL
5.4%
NZ Food
0.9%
NZ Market
1 Year Returns
0.4%
NZSE:SCL
4.2%
NZ Food
11.7%
NZ Market
SCL Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Scales (SCL) 0.2% -0.8% -6.4% 0.4% 55.8% -
NZ Food 5.4% 4% -3.7% 4.2% 72% 78.6%
NZ Market 0.9% 3.5% 5.4% 11.7% 27.6% 57.2%
1 Year Return vs Industry and Market
  • SCL underperformed the Food industry which returned 4.2% over the past year.
  • SCL underperformed the Market in New Zealand which returned 11.7% over the past year.
Price Volatility
SCL
Industry
5yr Volatility vs Market

Value

 Is Scales undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Scales to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Scales.

NZSE:SCL Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 3 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 7.1%
Perpetual Growth Rate 10-Year NZ Government Bond Rate 2.4%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NZSE:SCL
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year NZ Govt Bond Rate 2.4%
Equity Risk Premium S&P Global 6%
Food Unlevered Beta Simply Wall St/ S&P Global 0.56
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.563 (1 + (1- 28%) (11.01%))
0.737
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
0.8
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.37% + (0.8 * 5.96%)
7.14%

Discounted Cash Flow Calculation for NZSE:SCL using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Scales is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

NZSE:SCL DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (NZD, Millions) Source Present Value
Discounted (@ 7.14%)
2020 29.00 Analyst x1 27.07
2021 32.00 Analyst x1 27.88
2022 34.43 Est @ 7.6% 28.00
2023 36.51 Est @ 6.03% 27.71
2024 38.31 Est @ 4.93% 27.14
2025 39.91 Est @ 4.16% 26.39
2026 41.35 Est @ 3.63% 25.52
2027 42.70 Est @ 3.25% 24.59
2028 43.97 Est @ 2.99% 23.64
2029 45.20 Est @ 2.8% 22.68
Present value of next 10 years cash flows NZ$260.62
NZSE:SCL DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2029 × (1 + g) ÷ (Discount Rate – g)
= NZ$45.20 × (1 + 2.37%) ÷ (7.14% – 2.37%)
NZ$970.50
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= NZ$970.50 ÷ (1 + 7.14%)10
NZ$487.03
NZSE:SCL Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= NZ$260.62 + NZ$487.03
NZ$747.65
Equity Value per Share
(NZD)
= Total value / Shares Outstanding
= NZ$747.65 / 141.58
NZ$5.28
NZSE:SCL Discount to Share Price
Calculation Result
Value per share (NZD) From above. NZ$5.28
Current discount Discount to share price of NZ$4.69
= -1 x (NZ$4.69 - NZ$5.28) / NZ$5.28
11.2%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price Scales is available for.
Intrinsic value
11%
Share price is NZ$4.69 vs Future cash flow value of NZ$5.28
Current Discount Checks
For Scales to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Scales's share price is below the future cash flow value, but not at a moderate discount (< 20%).
  • Scales's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Scales's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Scales's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NZSE:SCL PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2018-12-31) in NZD NZ$0.20
NZSE:SCL Share Price ** NZSE (2019-07-17) in NZD NZ$4.69
New Zealand Food Industry PE Ratio Median Figure of 11 Publicly-Listed Food Companies 22.98x
New Zealand Market PE Ratio Median Figure of 89 Publicly-Listed Companies 17.94x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Scales.

NZSE:SCL PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NZSE:SCL Share Price ÷ EPS (both in NZD)

= 4.69 ÷ 0.20

22.93x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Scales is good value based on earnings compared to the NZ Food industry average.
  • Scales is overvalued based on earnings compared to the New Zealand market.
Price based on expected Growth
Does Scales's expected growth come at a high price?
Raw Data
NZSE:SCL PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 22.93x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 3 Analysts
9.1%per year
New Zealand Food Industry PEG Ratio Median Figure of 7 Publicly-Listed Food Companies 1.29x
New Zealand Market PEG Ratio Median Figure of 64 Publicly-Listed Companies 1.38x

*Line of best fit is calculated by linear regression .

NZSE:SCL PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 22.93x ÷ 9.1%

2.52x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Scales is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Scales's assets?
Raw Data
NZSE:SCL PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2018-12-31) in NZD NZ$1.75
NZSE:SCL Share Price * NZSE (2019-07-17) in NZD NZ$4.69
New Zealand Food Industry PB Ratio Median Figure of 13 Publicly-Listed Food Companies 1.08x
New Zealand Market PB Ratio Median Figure of 127 Publicly-Listed Companies 1.56x
NZSE:SCL PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NZSE:SCL Share Price ÷ Book Value per Share (both in NZD)

= 4.69 ÷ 1.75

2.69x

* Primary Listing of Scales.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Scales is overvalued based on assets compared to the NZ Food industry average.
X
Value checks
We assess Scales's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Food industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Food industry average (and greater than 0)? (1 check)
  5. Scales has a total score of 1/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

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

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
9.1%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Scales expected to grow at an attractive rate?
  • Scales's earnings growth is expected to exceed the low risk savings rate of 2.4%.
Growth vs Market Checks
  • Scales's earnings growth is expected to exceed the New Zealand market average.
  • Scales's revenue growth is expected to exceed the New Zealand market average.
Annual Growth Rates Comparison
Raw Data
NZSE:SCL Future Growth Rates Data Sources
Data Point Source Value (per year)
NZSE:SCL Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 3 Analysts 9.1%
NZSE:SCL Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 3 Analysts 5.1%
New Zealand Food Industry Earnings Growth Rate Market Cap Weighted Average 15.7%
New Zealand Food Industry Revenue Growth Rate Market Cap Weighted Average 15.5%
New Zealand Market Earnings Growth Rate Market Cap Weighted Average 7.6%
New Zealand Market Revenue Growth Rate Market Cap Weighted Average 4.3%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NZSE:SCL Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (6 months ago) See Below
Future Estimates Average of up to 3 Analyst Estimates (S&P Global) See Below
All numbers in NZD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NZSE:SCL Future Estimates Data
Date (Data in NZD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2021-12-31 477 50 38 3
2020-12-31 461 48 35 3
2019-12-31 446 41 32 3
NZSE:SCL Past Financials Data
Date (Data in NZD Millions) Revenue Cash Flow Net Income *
2018-12-31 403 37 29
2018-06-30 443 34 36
2018-03-31 421 33 34
2017-12-31 336 32 24
2017-09-30 338 35 26
2017-06-30 340 38 28
2017-03-31 357 39 33
2016-12-31 374 41 38
2016-09-30 362 40 37
2016-06-30 350 39 37
2016-03-31 326 44 36

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Scales's earnings are expected to grow by 9.1% yearly, however this is not considered high growth (20% yearly).
  • Scales's revenue is expected to grow by 5.1% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NZSE:SCL Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (6 months ago) See Below
Future Estimates Average of up to 3 Analyst Estimates (S&P Global) See Below

All data from Scales Company Filings, last reported 6 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NZSE:SCL Future Estimates Data
Date (Data in NZD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2021-12-31 0.27 0.29 0.25 3.00
2020-12-31 0.25 0.27 0.23 3.00
2019-12-31 0.23 0.25 0.20 3.00
NZSE:SCL Past Financials Data
Date (Data in NZD Millions) EPS *
2018-12-31 0.20
2018-06-30 0.26
2018-03-31 0.24
2017-12-31 0.17
2017-09-30 0.19
2017-06-30 0.21
2017-03-31 0.24
2016-12-31 0.27
2016-09-30 0.27
2016-06-30 0.26
2016-03-31 0.26

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Scales is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess Scales's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the New Zealand market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the New Zealand market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Scales has a total score of 3/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Scales performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Scales's growth in the last year to its industry (Food).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Scales's year on year earnings growth rate has been positive over the past 5 years.
  • Scales's 1-year earnings growth exceeds its 5-year average (18.6% vs 10.6%)
  • Scales's earnings growth has exceeded the NZ Food industry average in the past year (18.6% vs 9.5%).
Earnings and Revenue History
Scales's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Scales Company Filings, last reported 6 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NZSE:SCL Past Revenue, Cash Flow and Net Income Data
Date (Data in NZD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2018-12-31 402.54 28.61 40.51
2018-06-30 443.41 36.13 52.41
2018-03-31 421.26 33.73 52.14
2017-12-31 335.53 24.12 34.29
2017-09-30 337.87 26.29 37.35
2017-06-30 340.22 28.46 40.41
2017-03-31 357.07 33.12 45.30
2016-12-31 373.93 37.77 50.20
2016-09-30 361.83 37.24 52.39
2016-06-30 349.74 36.71 54.59
2016-03-31 325.58 36.30 51.54
2015-12-31 301.41 35.89 48.49
2015-09-30 287.81 33.21 46.80
2015-06-30 274.21 30.52 45.12
2015-03-31 268.73 24.30 44.14
2014-12-31 263.26 18.08 43.16
2014-09-30 270.19 16.77 42.72
2014-06-30 277.11 15.47 42.28
2014-03-31 274.66 17.52 41.27
2013-12-31 272.22 19.56 40.25
2012-12-31 228.89 13.62 110.15

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Scales has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Scales used its assets more efficiently than the NZ Food industry average last year based on Return on Assets.
  • Scales's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Scales's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Food industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Scales has a total score of 4/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Scales's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Scales's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Scales is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Scales's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Scales's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is covered by short term assets, assets are 2.8x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Scales Company Filings, last reported 6 months ago.

NZSE:SCL Past Debt and Equity Data
Date (Data in NZD Millions) Total Equity Total Debt Cash & Short Term Investments
2018-12-31 249.87 73.10 2.79
2018-06-30 237.53 82.25 1.84
2018-03-31 237.53 82.25 1.84
2017-12-31 221.92 47.71 5.69
2017-09-30 221.92 47.71 5.69
2017-06-30 234.66 85.16 15.12
2017-03-31 234.66 85.16 15.12
2016-12-31 214.59 42.20 6.36
2016-09-30 214.59 42.20 6.36
2016-06-30 191.35 60.83 15.73
2016-03-31 191.35 60.83 15.73
2015-12-31 157.99 31.14 13.83
2015-09-30 157.99 31.14 13.83
2015-06-30 156.23 60.46 13.85
2015-03-31 156.23 60.46 13.85
2014-12-31 146.33 41.42 0.99
2014-09-30 146.33 41.42 0.99
2014-06-30 139.77 82.68 14.59
2014-03-31 139.77 82.68 14.59
2013-12-31 175.31 60.29 4.48
2012-12-31 157.07 74.33 0.18
  • Scales's level of debt (29.3%) compared to net worth is satisfactory (less than 40%).
  • The level of debt compared to net worth has been reduced over the past 5 years (34.6% vs 29.3% today).
  • Debt is well covered by operating cash flow (50%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 18.2x coverage).
X
Financial health checks
We assess Scales's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Scales has a total score of 6/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

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

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
3.94%
Current annual income from Scales dividends. Estimated to be 4.35% next year.
If you bought NZ$2,000 of Scales shares you are expected to receive NZ$79 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Scales's pays a higher dividend yield than the bottom 25% of dividend payers in New Zealand (3.14%).
  • Scales's dividend is below the markets top 25% of dividend payers in New Zealand (5.78%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NZSE:SCL Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 3 Analyst Estimates (S&P Global) See Below
New Zealand Food Industry Average Dividend Yield Market Cap Weighted Average of 7 Stocks 3.5%
New Zealand Market Average Dividend Yield Market Cap Weighted Average of 73 Stocks 3.6%
New Zealand Minimum Threshold Dividend Yield 10th Percentile 2.3%
New Zealand Bottom 25% Dividend Yield 25th Percentile 3.1%
New Zealand Top 25% Dividend Yield 75th Percentile 5.8%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NZSE:SCL Future Dividends Estimate Data
Date (Data in NZ$) Dividend per Share (annual) Avg. No. Analysts
2021-12-31 0.21 3.00
2020-12-31 0.20 3.00
2019-12-31 0.20 3.00
NZSE:SCL Past Annualized Dividends Data
Date (Data in NZ$) Dividend per share (annual) Avg. Yield (%)
2018-08-28 0.185 3.952
2018-02-28 0.180 3.880
2017-05-02 0.200 5.287
2016-12-05 0.145 4.251
2016-08-25 0.130 4.054
2016-02-25 0.130 4.257
2015-03-27 0.100 5.120
2015-02-26 0.100 6.498
2014-08-29 0.000 0.000

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Whilst dividend payments have been stable, Scales has been paying a dividend for less than 10 years.
  • Dividend payments have increased, but Scales only paid a dividend in the past 4 years.
Current Payout to shareholders
What portion of Scales's earnings are paid to the shareholders as a dividend.
  • Dividends paid are not well covered by earnings (1.1x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be covered by earnings (1.3x coverage).
X
Income/ dividend checks
We assess Scales's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 2.3%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Scales afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Scales has a total score of 2/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

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

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Andy Borland
COMPENSATION NZ$0
CEO Bio

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 serves as an Executive Director of Scales Corporation Limited. Mr. Borland held a 20 year career in banking, with his final role being Head of Corporate at Westpac in New Zealand. He had an 18 year involvement with Central Otago deer and beef cattle breeding and fattening farming company Loganbrae Limited. From September 2007 to June 2010, he was engaged to provide management services to Southbury Group, the entities owned by it and New Zealand Wool Services International Limited. Mr. Borland serves as the Chairman of Akaroa Salmon Limited, Primary Collaboration New Zealand Limited and Primary Collaboration New Zealand (Shanghai) Co Limited. He has been a Director of Rabobank Australia Limited since November 2, 2016 and served as a Director of Coöperatieve Rabobank U.A., New Zealand Branch since November 2, 2016. He has been an Independent Non-Executive Director at Rabobank New Zealand Limited since November 2016. He serves as Director of Pipfruit New Zealand Incorporated and George H Investments Limited. He has been a Director of Rabo Australia Limited since November 2, 2016. Mr. Borland served as a Director of Southbury Group Limited until June 2009, Tyrone Estates Limited, Belfast Park Limited and Braebrook Properties Limited. He graduated from Lincoln University with a Bachelor of Agricultural Commerce degree.

CEO Compensation
  • Andy's compensation has been consistent with company performance over the past year, both up more than 20%.
  • Andy's remuneration is lower than average for companies of similar size in New Zealand.
Management Team Tenure

Average tenure of the Scales management team in years:

7.9
Average Tenure
  • The average tenure for the Scales management team is over 5 years, this suggests they are a seasoned and experienced team.
Management Team

Andy Borland

TITLE
CEO, MD & Executive Director

Steve Kennelly

TITLE
Chief Financial Officer

Karen Morrish

TITLE
Group Health & Safety
TENURE
2.5 yrs

Hamish Davis

TITLE
Managing Director - Fern Ridge
TENURE
11.5 yrs

Andrew van Workum

TITLE
Chief Executive Officer of Mr Apple

Kent Ritchie

TITLE
Chief Executive Officer of Scales Logistics

John Sainsbury

TITLE
Chief Executive Officer of Meateor Foods
TENURE
4.3 yrs

Brett Frankel

TITLE
President - Shelby Foods
TENURE
12.5 yrs
Board of Directors Tenure

Average tenure of the Scales board of directors in years:

3.6
Average Tenure
  • The tenure for the Scales board of directors is about average.
Board of Directors

Tim Goodacre

TITLE
Non Executive Independent Chair
COMPENSATION
NZ$103K
TENURE
2.1 yrs

Andy Borland

TITLE
CEO, MD & Executive Director

Mark Hutton

TITLE
Non Executive Independent Director
COMPENSATION
NZ$81K
TENURE
8.5 yrs

Alan Isaac

TITLE
Non Executive Independent Director
COMPENSATION
NZ$92K
TENURE
5.1 yrs

Nick Harris

TITLE
Non Executive Independent Director
COMPENSATION
NZ$72K
TENURE
5.1 yrs

Tomakin Lai

TITLE
Non Executive Director
AGE
52
TENURE
0.5 yrs

Nadine Tunley

TITLE
Non-Executive Independent Director
TENURE
0.4 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month individual insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price (NZ$) Value (NZ$)
X
Management checks
We assess Scales's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Scales has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

Is Scales (NZSE:SCL) Using Too Much Debt?

NZSE:SCL Historical Debt, July 16th 2019 A Look At Scales's Liabilities Zooming in on the latest balance sheet data, we can see that Scales had liabilities of NZ$73.4m due within 12 months and liabilities of NZ$87.8m due beyond that. … Because it carries more debt than cash, we think it's worth watching Scales's balance sheet over time. … But it is future earnings, more than anything, that will determine Scales's ability to maintain a healthy balance sheet going forward.

Simply Wall St -

Should You Buy Scales Corporation Limited (NZSE:SCL) For Its Dividend?

Is Scales Corporation Limited (NZSE:SCL) a good dividend stock? How would you know? Dividend paying companies with growing earnings can be highly rewarding in the long term. Yet sometimes, investors buy a popular dividend stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations. With a goodly-sized dividend yield despite a relatively short payment history, investors might be wondering if Scales is a new dividend aristocrat in the making. We'd agree the yield does look enticing. Before you buy any stock for its dividend however, you should always remember Warren Buffett's two rules: 1) Don't lose money, and 2) Remember rule #1. We'll run through some checks below to help with this. Click the interactive chart for our full dividend analysis NZSE:SCL Historical Dividend Yield, June 26th 2019 Payout ratios Dividends are typically paid from company earnings. If a company pays more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. As a result, we should always investigate whether a company can afford its dividend, measured as a percentage of a company's net income after tax. In the last year, Scales paid out 90% of its profit as dividends. Its payout ratio is quite high, and the dividend is not well covered by earnings. If earnings are growing or the company has a large cash balance, this might be sustainable - still, we think it is a concern. In addition to comparing dividends against profits, we should inspect whether the company generated enough cash to pay its dividend. Scales paid out 125% of its free cash flow last year, suggesting the dividend is poorly covered by cash flow. Cash is slightly more important than profit from a dividend perspective, but given Scales's payments were not well covered by either earnings or cash flow, we are concerned about the sustainability of this dividend. Is Scales's Balance Sheet Risky? As Scales's dividend was not well covered by earnings, we need to check its balance sheet for signs of financial distress. A rough way to check this is with these two simple ratios: a) net debt divided by EBITDA (earnings before interest, tax, depreciation and amortisation), and b) net interest cover. … Conclusion To summarise, shareholders should always check that Scales's dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. … Earnings growth generally bodes well for the future value of company dividend payments.

Simply Wall St -

A Look At Scales Corporation Limited's (NZSE:SCL) Exceptional Fundamentals

By this I mean, I look at stocks holistically, from their financial health to their future outlook. … In the case of Scales Corporation Limited (NZSE:SCL), it is a company with great financial health as well as a a great track record of performance. … Take a look at our free research report of analyst consensus for SCL’s outlook.

Simply Wall St -

Why Scales Corporation Limited (NZSE:SCL) Looks Like A Quality Company

While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. … That means that for every NZ$1 worth of shareholders' equity, it generated NZ$0.12 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

What Kind Of Shareholder Owns Most Scales Corporation Limited (NZSE:SCL) Stock?

Scales is a smaller company with a market capitalization of NZ$706m, so it may still be flying under the radar of many institutional investors. … Taking a look at our data on the ownership groups (below), it's seems that. … institutional investors have bought into the company.

Simply Wall St -

Scales Corporation Limited (NZSE:SCL) Earns A Nice Return On Capital Employed

Specifically, we'll consider its Return On Capital Employed (ROCE), since that will give us an insight into how efficiently the business can generate profits from the capital it requires. … What is Return On Capital Employed (ROCE)? … ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business.

Simply Wall St -

Is Scales Corporation Limited's (NZSE:SCL) P/E Ratio Really That Good?

We'll look at Scales Corporation Limited's (NZSE:SCL) P/E ratio and reflect on what it tells us about the company's share price. … Based on the last twelve months, Scales's P/E ratio is 24.45. … Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)

Simply Wall St -

Scales Corporation Limited (NZSE:SCL): What Are The Future Prospects?

Since Scales Corporation Limited (NZSE:SCL) released its earnings in December 2018,. … with earnings expected to grow by 1.8% in the upcoming year … the higher past 5-year average growth rate of 11%

Simply Wall St -

Should You Buy Scales Corporation Limited (NZSE:SCL) For Its 3.9% Dividend?

In the last few years Scales Corporation Limited (NZSE:SCL) has paid a dividend to shareholders. … Let's dig deeper into whether Scales should have a place in your portfolio. … See our latest analysis for Scales

Simply Wall St -

Did You Miss Scales's (NZSE:SCL) 94% Share Price Gain?

For example, Scales Corporation Limited (NZSE:SCL) shareholders have seen the share price rise 94% over three years, well in excess of the market return (25%, not including dividends). … During the three years of share price growth, Scales actually saw its earnings per share (EPS) drop 7.3% per year. … It may well be that Scales revenue growth rate of 8.9% over three years has convinced shareholders to believe in a brighter future.

Simply Wall St -

Company Info

Description

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 and markets pet food ingredients for the pet food industry. This segment also manufactures and sells apple, kiwifruit, and pear juice concentrates. The Horticulture segment is involved in growing, packaging, marketing, and exporting apples under the Mr Apple, Dazzle, Posy, and Fern Ridge Fresh brand names. The Logistics segment provides supply chain services for exporters, importers, and FMCG businesses. This segment operates cold storage facilities and bulk liquid storage facilities in Napier and Timaru; and engages in the sea and air freight of produce. The company also provides insurance services. Scales Corporation Limited was founded in 1897 and is based in Christchurch, New Zealand.

Details
Name: Scales Corporation Limited
SCL
Exchange: NZSE
Founded: 1897
NZ$664,006,626
141,579,238
Website: http://scalescorporation.co.nz
Address: Scales Corporation Limited
52 Cashel Street,
Christchurch,
8013,
New Zealand
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NZSE SCL Ordinary Shares New Zealand Stock Exchange NZ NZD 25. Jul 2014
DB S05 Ordinary Shares Deutsche Boerse AG DE EUR 25. Jul 2014
Number of employees
Current staff
Staff numbers
700
Scales employees.
Industry
Packaged Foods and Meats
Food, Beverage & Tobacco
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/07/17 10:37
End of day share price update: 2019/07/17 00:00
Last estimates confirmation: 2019/05/20
Last earnings filing: 2019/02/27
Last earnings reported: 2018/12/31
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

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.