# Scales (S05.F)

Canonical: https://gigainvestors.com/s/S05.F

Analysis as of: 2026-10-16T07:33:44.689Z. Financial observations: FY2018–FY2025.

Listing currency: EUR. Reporting currency: NZD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: EUR 3.18 per share; close as of 2026-10-15.

Estimated value: low EUR 0.85 per share, central EUR 0.94 per share, high EUR 1.07 per share. Buy at or below the central value EUR 0.94 per share. Valuation as of 2026-10-16T07:33:44.689Z; scenarios are not confidence intervals.

Expected annual return: 4.8% at the stated quote. About 4.8% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; NZ 10-year bond 5.0% + 4 points).

## Checklist

### understandable: pass

- 2 revenue declines in the last 10 years (informational)

- Financial history: 8 years

- Years with declining revenue: 2

- Years with a net loss: 0

- Operating margin variation: 0.19×

Chart: Operating margin; fiscal year observations.

- FY2018: 0.09×

- FY2019: 0.08×

- FY2020: 0.07×

- FY2021: 0.06×

- FY2022: 0.07×

- FY2023: 0.06×

- FY2024: 0.10×

- FY2025: 0.11×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- Recent gross margin fell 9.4pp below the typical margin (limit 4pp)

- ROIC, median of available years: 10.0%

- ROIC, second-lowest year: 7.8%

- Typical minus recent gross margin: 9.4 pp

- Typical gross margin (annual median): 71.8%

- Recent gross margin (lower of latest and 3-year median): 62.4%

- Years with nonpositive capital: 0

- Capital spending / revenue: 3.4%

- ROIC including acquisitions, ten-year median: 3.3%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2018: 10.4%

- FY2019: 10.2%

- FY2020: 8.3%

- FY2021: 6.8%

- FY2022: 9.8%

- FY2023: 7.8%

- FY2024: 12.3%

- FY2025: 17.8%

### economics: fail

- owner earnings cash conversion below threshold

- Owner earnings / net income, 5-yr: 0.54×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: NZD 99M

- Net income, five-year total: NZD 183M

- Return on incremental invested capital: 39.1%

- Working capital / revenue, annual change: 0.7 pp

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.52×

- FY2022: 0.64×

- FY2023: -0.68×

- FY2024: -0.24×

- FY2025: 0.83×

### management: fail

- Historical market-dollar context (not the management verdict): 2018 to 2025 (7 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 10.2% vs 12.3%

- Per-share earnings: 0.32 to 0.21 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 5-year annual growth: 0.5%

- Market cap gain: NZD 114M

- Cumulative retained earnings: NZD 177M

- Diluted shares, 5-year annual growth: 0.5%

- $1 test, starting fiscal year: FY2018

- $1 test, ending fiscal year: FY2025

- Per-share value growth: -8.0%

- Per-share value change: NZD -0.11

- Per-share value, starting three-year median: NZD 0.32

- Per-share value, ending three-year median: NZD 0.21

- Buyback history: 0 years

- Debt-funded buybacks: No

- ROIC, first three-year median: 10.2%

- ROIC, last three-year median: 12.3%

Chart: Earnings per share; fiscal year observations.

- FY2018: NZD 0.32

- FY2019: NZD 0.84

- FY2020: NZD 0.15

- FY2021: NZD 0.19

- FY2022: NZD 0.14

- FY2023: NZD 0.04

- FY2024: NZD 0.21

- FY2025: NZD 0.70

### accounting: pass

- Sloan accruals: 0.6%

- Receivables to sales index (DSRI): 1.24×

- Restructuring years, last five: 0

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.95×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.38×

Chart: Sloan accruals; fiscal year observations.

- FY2020: -5.5%

- FY2021: -2.2%

- FY2022: -4.4%

- FY2024: -11.0%

- FY2025: 0.6%

## Holders

## Price story

Price needs cash profits to grow 18% a year for ten years · sales +54.3%

Story as of 2026-10-16T09:59:56.203Z; price observation 2026-10-15.

Price needs cash profits to grow 18% a year for ten years

### Sales · FY2024–2025

sales +54.3%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2018: NZD 398M 

- FY2019: NZD 482M 

- FY2020: NZD 467M 

- FY2021: NZD 502M 

- FY2022: NZD 614M 

- FY2023: NZD 570M 

- FY2024: NZD 587M 

- FY2025: NZD 906M 

### Gross margin · FY2025

gross margin 62.4%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2018: 21.5% 

- FY2019: 77.8% 

- FY2020: 21.4% 

- FY2021: 73.3% 

- FY2022: 72.5% 

- FY2023: 71.1% 

- FY2024: 74.0% 

- FY2025: 62.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in packaged foods; annual sales are NZD 906.1 million.

- Source: https://eodhd.com/api/fundamentals/S05.STU.json#2025-12-31 (filed 2026-10-16T07:33:44.689Z); FY2025: revenue 906115000; grossProfit 565193000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); S05.F: Scales Corporation Limited engages in manufacturing and trading of food ingredients in New Zealand, Asia, Europe, North America, and internationally. The company operates through Global Proteins, Horticulture, Logistics, and Other segments. It processes and markets proteins, such as pet food ingredients, edible meat, and offal products; and orchards, fruit packing, and juice concentrate. In addition, the company provides sea and air freight, and logistics services. Further, it provides insurance services; and operates cold storage. Scales Corporation Limited was founded in 1897 and is based in Christchurch, New Zealand.

### Why customers stay

Margins ranged from 62.4% to 74% during 2023–25; it earns 10% on its capital.

- Source: https://eodhd.com/api/fundamentals/S05.STU.json#2023-12-31 (filed 2026-10-16T07:33:44.689Z); FY2023: grossProfit / revenue = 71.1%.

- Source: https://eodhd.com/api/fundamentals/S05.STU.json#2024-12-31 (filed 2026-10-16T07:33:44.689Z); FY2024: grossProfit / revenue = 74%.

- Source: https://eodhd.com/api/fundamentals/S05.STU.json#2025-12-31 (filed 2026-10-16T07:33:44.689Z); FY2025: grossProfit / revenue = 62.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:44.689Z); 8-year return on capital observations [[2018,0.10428085006025006],[2019,0.10246005787550135],[2020,0.08285237375531947],[2021,0.06830657654828823],[2022,0.09817172968675072],[2023,0.07806239791647676],[2024,0.12305472538103755],[2025,0.178231597364598]]; median 0.10031589378112604. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Reinvests 95.3% of cash earnings; earns 39.1% on new investment.

- Source: https://eodhd.com/api/fundamentals/S05.STU.json#2018-12-31 (filed 2026-10-16T07:33:44.689Z); FY2018: growth capex 0; upkeep 16416000; owner earnings 37915000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/S05.STU.json#2019-12-31 (filed 2026-10-16T07:33:44.689Z); FY2019: growth capex 0; upkeep 16808000; owner earnings 103236000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/S05.STU.json#2021-12-31 (filed 2026-10-16T07:33:44.689Z); FY2021: growth capex 0; upkeep 16527000; owner earnings 13999400. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/S05.STU.json#2022-12-31 (filed 2026-10-16T07:33:44.689Z); FY2022: growth capex 0; upkeep 15586000; owner earnings 12513800. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/S05.STU.json#2025-12-31 (filed 2026-10-16T07:33:44.689Z); FY2025: growth capex 0; upkeep 22150000; cash acquisitions 79704000; owner earnings 83593400. Growth capex plus acquisitions / owner earnings = 0.9534724033237074.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:44.689Z); Incremental return on capital 0.3905784997499995, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:44.689Z); Dividend observations: [[2018,25624000],[2019,29792000],[2020,31279000],[2021,35640000],[2022,44379000],[2023,42267000],[2024,29258000],[2025,36260000]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 9.2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); S05.F SharesStats.PercentInsiders = 9.238 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 18% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:44.689Z); Ten-year compound average after fade. Initial solved rate 0.24868604073654377. Price 3.18; FX 0.5012485730593607; discount 0.1; same standard ten-year fade to terminal 0.03.  Closing-price date 2026-10-15.

## Monthly share-price history (EUR per share)

- 2016-10: EUR 1.96 per share

- 2016-11: EUR 2.25 per share

- 2016-12: EUR 2.21 per share

- 2017-01: EUR 2.25 per share

- 2017-02: EUR 2.39 per share

- 2017-03: EUR 2.20 per share

- 2017-04: EUR 2.09 per share

- 2017-05: EUR 2.08 per share

- 2017-06: EUR 2.09 per share

- 2017-07: EUR 2.12 per share

- 2017-08: EUR 2.02 per share

- 2017-09: EUR 2.20 per share

- 2017-10: EUR 2.21 per share

- 2017-11: EUR 2.18 per share

- 2017-12: EUR 2.79 per share

- 2018-01: EUR 2.79 per share

- 2018-02: EUR 2.74 per share

- 2018-03: EUR 2.59 per share

- 2018-04: EUR 2.55 per share

- 2018-05: EUR 2.80 per share

- 2018-06: EUR 2.68 per share

- 2018-07: EUR 2.69 per share

- 2018-08: EUR 2.75 per share

- 2018-09: EUR 2.77 per share

- 2018-10: EUR 2.64 per share

- 2018-11: EUR 2.67 per share

- 2018-12: EUR 2.57 per share

- 2019-01: EUR 2.63 per share

- 2019-02: EUR 2.81 per share

- 2019-03: EUR 2.95 per share

- 2019-04: EUR 2.99 per share

- 2019-05: EUR 2.71 per share

- 2019-06: EUR 2.74 per share

- 2019-07: EUR 2.62 per share

- 2019-08: EUR 2.61 per share

- 2019-09: EUR 2.74 per share

- 2019-10: EUR 2.98 per share

- 2019-11: EUR 3.02 per share

- 2019-12: EUR 2.98 per share

- 2020-01: EUR 2.77 per share

- 2020-02: EUR 2.39 per share

- 2020-03: EUR 2.36 per share

- 2020-04: EUR 2.68 per share

- 2020-05: EUR 2.73 per share

- 2020-06: EUR 2.77 per share

- 2020-07: EUR 2.95 per share

- 2020-08: EUR 2.73 per share

- 2020-09: EUR 2.68 per share

- 2020-10: EUR 2.83 per share

- 2020-11: EUR 2.92 per share

- 2020-12: EUR 2.88 per share

- 2021-01: EUR 2.86 per share

- 2021-02: EUR 2.75 per share

- 2021-03: EUR 2.75 per share

- 2021-04: EUR 2.71 per share

- 2021-05: EUR 2.72 per share

- 2021-06: EUR 2.79 per share

- 2021-07: EUR 2.65 per share

- 2021-08: EUR 2.96 per share

- 2021-09: EUR 3.17 per share

- 2021-10: EUR 3.24 per share

- 2021-11: EUR 3.16 per share

- 2021-12: EUR 3.62 per share

- 2022-01: EUR 2.78 per share

- 2022-02: EUR 3.02 per share

- 2022-03: EUR 3.24 per share

- 2022-04: EUR 2.99 per share

- 2022-05: EUR 2.84 per share

- 2022-06: EUR 2.56 per share

- 2022-07: EUR 2.64 per share

- 2022-08: EUR 2.87 per share

- 2022-09: EUR 2.86 per share

- 2022-10: EUR 2.75 per share

- 2022-11: EUR 2.64 per share

- 2022-12: EUR 2.40 per share

- 2023-01: EUR 2.60 per share

- 2023-02: EUR 1.98 per share

- 2023-03: EUR 1.82 per share

- 2023-04: EUR 1.71 per share

- 2023-05: EUR 1.83 per share

- 2023-06: EUR 1.72 per share

- 2023-07: EUR 1.79 per share

- 2023-08: EUR 1.61 per share

- 2023-09: EUR 1.64 per share

- 2023-10: EUR 1.48 per share

- 2023-11: EUR 1.65 per share

- 2023-12: EUR 1.93 per share

- 2024-01: EUR 1.83 per share

- 2024-02: EUR 1.72 per share

- 2024-03: EUR 1.81 per share

- 2024-04: EUR 1.82 per share

- 2024-05: EUR 1.87 per share

- 2024-06: EUR 2.00 per share

- 2024-07: EUR 1.89 per share

- 2024-08: EUR 1.87 per share

- 2024-09: EUR 2.01 per share

- 2024-10: EUR 2.19 per share

- 2024-11: EUR 2.28 per share

- 2024-12: EUR 2.12 per share

- 2025-01: EUR 2.17 per share

- 2025-02: EUR 2.23 per share

- 2025-03: EUR 2.25 per share

- 2025-04: EUR 2.22 per share

- 2025-05: EUR 2.32 per share

- 2025-06: EUR 2.44 per share

- 2025-07: EUR 2.40 per share

- 2025-08: EUR 2.48 per share

- 2025-09: EUR 2.78 per share

- 2025-10: EUR 3.01 per share

- 2025-11: EUR 2.92 per share

- 2025-12: EUR 2.90 per share

- 2026-01: EUR 2.96 per share

- 2026-02: EUR 3.16 per share

- 2026-03: EUR 2.92 per share

- 2026-04: EUR 2.98 per share

- 2026-05: EUR 3.09 per share

- 2026-06: EUR 3.17 per share

- 2026-07: EUR 3.25 per share

- 2026-08: EUR 3.55 per share

- 2026-09: EUR 3.38 per share

- 2026-10: EUR 3.19 per share

## Annual estimated value (EUR per share)

- FY2022: low EUR 0.86 per share, central EUR 0.95 per share, high EUR 1.08 per share

- FY2023: low EUR 0.68 per share, central EUR 0.74 per share, high EUR 0.83 per share

- FY2025: low EUR 0.86 per share, central EUR 0.96 per share, high EUR 1.09 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:39:30.166Z where newer inputs omit a numeric field or fiscal period.

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.