Laboratory and testing group, Campbell Brothers Ltd has again boosted its first half profit forecasts.
The company first lifted its outlook at the annual meeting a couple of months ago, but yesterday went further, thanks to what it said was "better than expected trading".
The company now expects an underlying net profit of $100 million for the six months to September 30, up from the $90 million and $95 million range from the AGM.
If these expectations are met, first half net profit will be up by 51% on the previous corresponding period when a net profit of $66 million was earned.
Brisbane-based Campbell Brothers offers laboratory services predominantly to the resources sector, but increasingly to government, companies and others in the water treatment/quality and pollution sectors.
It said its laboratories are experiencing record sample volumes in the fiscal year to date, with its North and South America and Africa operations particularly strong.
Campbell said it sees these levels of activity being maintained until at least December (but you could hardly see them stopping at December 31, or slowing).
Also helping earnings has been the recent fall in the value of the Australian dollar to under parity with the US dollar.
And there was no sign from the company that the recent slowdown in Europe and the US economies is having an impact on demand for its services, or that the recent volatility in markets was impacting its businesses in anyway.
The improvement though shouldn’t be that surprising.
At the start of July Campbell Brothers acquired UK company Stewart Group for $220 million, and expects the new business to contribute $60 million in revenue this year.
Campbell Brothers shares jumped 5.34% on Monday and 6.6% yesterday to $40.76, a strong two-day performance.
Looking at the 2011 profit of $132.3 million, which was up 75%, Campbell could earn close to $200 million for the 2012 year if there’s no impact from the current instability and weak economic activity in some of its key markets.
