A good result from Brisbane-based global testing group ALS yesterday with 27.3% lift in after-tax net profit to $181 million for the 2018-19 year ending March 31.
The improvement was struck on a solid 15% jump in revenue to $1.7 billion thanks to improved sales across all the companies divisions.
Statutory net profit for 2018-19 was $154 million.
ALS increased final dividend by 28% to 11.5 cents a share and with an interim of 11 cents a share, the total for 2018-19 is 22.5 cents, up from 17 cents in 2017-18.
On top of that ALS spent $131.4 million of a $225 million share buyback program in the year to the end of March.
And yet ALS shares ended 6.3% lower yesterday at $7.54 as investors noted a fairly weak outlook for the current financial year.
“In the absence of any prolonged trade uncertainty, the underlying global economic conditions in which ALS business streams operate continue to remain stable,” the company said in yesterday’s release.
It is looking for opportunities in the environmental, pharmaceutical, and food sectors, and says it is “on target to implement its strategic objectives and consolidate its presence as a leading provider of services to the global testing, inspection and certification sector.”
Directors said the company will provide half-year guidance at the July annual general meeting (which is normal for the company).
CEO Raj Naran said in the release that the strong results noting that all segments had contributed positive organic growth whilst remaining disciplined with cost management initiatives.
“I am particularly pleased that despite some very competitive markets, the Life Sciences and Commodities business streams have delivered tangible and material improvement in their relative profit margins. It remains our focus across all business streams in FY2020 to achieve operational efficiency through technology and innovation to ensure sustainable margin improvements despite any headwinds that may arise.”
“The Commodities division’s underlying contribution was up 35.8% with higher revenue and EBIT coming across the board from the geochemistry, coal, inspection and metallurgy businesses.
“The Life Sciences division delivered significant revenue growth and margin improvement across all regions, with total revenue up 13.3% and margin up +110 bps leading to an underlying segment contribution increase of 21.8%.
“The Industrial division revenue was up 9.9% driven by successful business development efforts focused on maintenance related services. However, EBIT was down 18.3% due to reduced margins associated with the change in the mix of services and price pressure, particularly in Australia.
“Revenue from continuing operations of $1,664.8 million was up significantly by 15.1% on the $1,446.9 million recorded in the previous corresponding period. The FY2019 statutory result from all operations was a net profit after tax attributable to equity holders of the company of $153.8 million, up 197%, compared with a net profit of $51.8 million recorded in FY2018,“ the company said yesterday.
