An Adelaide company is preparing for Prime Minister Kevin Rudd’s big move to an emissions trading scheme in 2010 with a machine to measure the amount of carbon coming out of the smokestacks of coal-fired power stations around the country.
Scantech Limited, a small-cap Adelaide-listed company with just 39 employees, manufactures a high-tech machine which accurately measures the carbon in fly ash that is pumped out of power stations into the environment along with carbon dioxide, carbon monoxide and sulphur dioxide.
Scantech Managing Director, David Lindeberg said the introduction of a carbon-trading scheme would make the precise calculation of emissions important financially.
“Unburnt carbon in fly ash is carbon which has not been released as carbon dioxide; traditionally they estimate the amount of unburnt carbon,” Lindeberg said.
“With a carbon in fly ash (CIFA) monitor, the value can be measured directly and a more accurate calculation of carbon dioxide emissions made.
“Scantech expects there will be strong interest in the use of the CIFA350 for this purpose.”
Scantech also makes coal analysers power stations use to determine the chemical composition of coal (usually the sulphur content) which is demanded by environmental laws.
Scantech makes and distributes globally a series of elemental analysers which are used by cement makers, iron ore and copper miners and the coal industry to know the exact chemical composition of product flowing along their conveyor belts.
After a long period in the wilderness the company has just announced a major improvement in profit, a big upturn in orders and a surprising $4.5 million in the bank.
Scantech’s pre-tax profit of $1,058,869 for the year to June 30 was a 32 per cent improvement on the $804,936 earned in 2007.
Revenue core business was up 28 per cent from $10.7 million to $13.7 million.
The company adopted tax-effect accounting for the first time in many years in 2008, resulting in a profit and loss credit of $94,619. This amount represents the net tax benefit in future years, as a result of expenses claimed for accounting but only deductable for taxation in the future. This includes available tax losses of around $300,000 that are carried forward into the future. Scantech expects to incur a tax liability in respect of the operating results for its 2009 year.
The company’s cash on deposit of $4.5 million is monies received in advance for certain contracts. This generated interest of $281k which easily covered interest paid of $187k.
Most of Scantech’s $13 million revenue is generated from export sales of $10 million. Scantech made a disastrous foray into the US market a decade ago and the cost of that unpleasantness is still reflected in the accumulated losses of $9.83 million.
But things are looking up these days with an increase in firm orders of 238 per cent to $8.5 million compared with $2.5 million this time last year.
India is developing as an interesting new outlet with orders for four cement industry analysers to a major customer as well as three Geoscans for Poland. The sales followed a boost in the company’s marketing team.
“The second quarter of 2008 has shown an improvement in the number of projects won with Chinese engineering companies,” Lindeberg said.
“Significant sales across the range of coal analysers were made in Indonesia, reflecting the company’s strategy to be the leading supplier of online coal analysers to the growing economies of India, China and Vietnam. There was also strong demand for the Coalscan 9500X analysers in Western Australia.”
During the latest half year Scantech underwent a capital reconstruction of a one-for-10. The shares firmed from 48 to 60 cents following the profit result on minimal turnover.
Former Scantech director Will Ouwens bought 10,000 shares during the week lifting Ouwens Corporate Services’ stake from 6.9 to 7 per cent. He holds 1,228,815 shares out of the total shares on issue of 17.5 million.
Former Macquarie stockbroker, Danny Watson has also been buying, picking up 221,500 Scantech shares in July which took his stake to 8.93 per cent.
The largest shareholder is Ridgeway Consulting Pty Ltd, owned by Lindeberg, with 2 million shares or 11.42 per cent. Scantech’s chairman is Peter Pedler of Duncan Basheer Hannon, while Laurence Brett and former SA Premier Dean Brown are nonexecutive directors.
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