Shares in Brisbane-based global testing giant, ALS Ltd surged yesterday, adding more than 11% in value after the company’s annual meeting heard an upbeat outlook for the first half of the 2018-19 financial year.
From what the meeting was told, ALS seems to be sharing in the more upbeat outlook for much of the global economy, and benefitting from not having the financial millstone of an underperforming energy business.
As a result shareholders were told ALS is looking at a 25% jump in earnings at the top of a guidance range presented to the meeting.
The shares rose 11.4% to $8.30 in a market that struggled for most of the day to remain in positive territory and eventually fell into the red.
Chairman Bruce Phillips told the meeting that the company is “seeing positive returns and growth in our Environmental, Food, Pharmaceutical, Geochemistry and Tribology businesses.”
But he warned that "Profits from the Asset Care business unit remain flat and conditions challenging.” Mr Phillips said the company expects first half underlying after tax profit from continuing operations to be in the range of $85 – $90 million, compared with $71.9 million in the first half last year on a like for like basis.
That’s a rise of around 18% at the bottom of the range to 25% at the top.
"This guidance of course assumes no material change in market activity levels (e.g. global trade wars), foreign exchange rates and no material adverse events in the Group’s business activities for the remainder of the first half to September 2018,” he added.
It will put ALQ on track to top the 2017-18 underlying net profit after tax from continuing operations of $142.2 million.
The underlying net profit excluded those Oil and Gas operations which are ‘held for sale’, restructuring and other one-off items, amortisation of acquired intangibles, and impairment charges.
The result was 21.1% higher than the underlying profit achieved last year.
Revenue from continuing operations was $1.44 billion, up 14.7% on the $1.27 billion recorded the previous year.
The statutory result was a net profit after tax of $51.8 million, adversely impacted by non-cash impairments of $63 million in the Industrial and Coal sectors.
