ALS Ups Dividend On Solid Result
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Brisbane-based testing group, ALS Ltd has lifted final dividend on top of a higher interim after reporting an improved underlying performance for 2017-18.
The company told the ASX yesterday afternoon that underlying net profit after tax from continuing operations for 2017-18 was $142.2 million which it said was within the guidance range of $135 million to $145 million provided to the market in November 2017.
The shares fell 0.4% to $7.56 ahead of the release of the results after ASX trading finished at 4pm.
ALS said the underlying result was up 21.1% higher from the $117.4 million comparative underlying net profit after tax earned in the 2016-17. Revenue from continuing operations rose 14.7% to $1,446.9 million from the $1,261.5 million recorded in the previous year.
As a result the final dividend of 9 cents a share is up from 8 cents previously. The company paid an interim of 8 cents, up from 5.5 cents previously, meaning total dividend for 23017-18 is 17 cents a share against 13.5 cents.
Directors said the improvement was "primarily due to improvements in market conditions for those businesses exposed to mineral commodities markets and expansion in the less cyclical Life Sciences and Industrial operations with food, environmental and tribology acquisitions in mainland Europe and South America.
Statutory profit from all operations was a net profit after tax of $51.8million, compared with a net profit of $81.6 million recorded in FY2017, with over $63 million in impairments and $11 million in foreign exchange losses.
The company said its commodities division’s underlying contribution was up 43.5% with higher revenue and earnings before interest and tax (EBIT) “coming across the board from the geochemistry, coal, inspection and metallurgy businesses.
"Life Sciences revenue increased in all regions during FY2018, however the effects of competition and temporary acquisition integration-related disruptions saw underlying segment contribution for the year remain steady.
"Industrial division revenue was relatively flat year-on-year as increased sales from the Tribology business were largely offset by softer conditions experienced in Asset Care.”
"As previously announced, the Group sold the majority of its Oil & Gas technical services business in July 2017 retaining only the laboratory testing component. In March 2018, following a further review of the Group’s presence in the sector, Directors decided to exit the Oil & Gas laboratories business.
"A number of options are currently being considered in this regard. The results of the Oil & Gas laboratories business have been disclosed, along with those of the Oil & Gas operations sold in July 2017, as discontinued operations in the financial report.
"In light of the Company’s plans to continue with an on-market share buyback program the dividend reinvestment plan will not operate for the FY2018 final dividend. In November 2017 following the divestment of the Oil & Gas business and a review of ongoing capital requirements, Directors announced an on-market share buyback of up to $175 million.
"As at 31 March 2018 a total of 15.5 million shares (representing 3.1% of the original base) have been bought back on-market for an overall consideration of $106.8 million,”Directors said.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.