The rebound in global resources and in the wider economy has seen the Brisbane-based global testing giant, ALS Limited boost interim dividend by a third after lifting earnings by 30% on an underlying basis to $93.3 million for the September half of its 2018-19 financial year.
The company will pay shareholders an interim of 11 cents a share on a 15% jump in revenue to $826.1 million for the six months.
The company said the underlying net profit after tax from continuing operations exceeded the guidance range of $85 million to $90 million provided to the market at the Annual General Meeting on August 1.
The result was 29.8% higher than the $71.9 million comparative underlying net profit after tax earned in the previous corresponding period.
The statutory result from all operations was a net profit after tax of $85.5million, compared with a net loss of $8.9 million recorded in the half year to September 2017.
The rise in revenue and higher profits (from rising margins) “was driven by revenue gains from acquisitions in Life Sciences and strong organic growth across all business streams,’ ALS said yesterday.
This was primarily due to increased earnings from those businesses servicing mineral commodities markets and the improved performance from the Life Science businesses.
“The recovery being experienced in mineral commodities markets helped increase revenue in that segment up 24.8% above thePCP at an improved EBIT margin of 26.7%,” director said yesterday.
Revenue in Life Sciences grew by 11.0% and while the EBIT margin of 15.1% was down slightly from 15.3% in the PCP, it remains on track to improve by 50 to 100 basis points on a full year basis.
The company’s Industrial segment saw a 6.6% growth in revenue, but ALS said the segment’s margins fell from the compounding effects of increased competition and a changing revenue mix.
ALS shares were up more than 2% in early trading yesterday but retreated to end the day steady at $7.95.
In a statement chairman, Bruce Phillips said:
“It is pleasing the Company’s performance for the first half now sees it tracking slightly ahead of the 5-year strategic plan. There is much work to do, but shareholders and the broader community should be pleased our highly skilled workforce is not just striving, but delivering good returns for shareholders in a safe & sustainable manner.”
Looking at the current second half, directors said “it is expected that the Company will have a strong second half in FY2019. The Company anticipates ongoing year-on-year improvements in earnings in the Geochemistry business stream as sample flows continue to grow and from the Life Sciences operations on the back of cost rationalisation and new contracts.
“Group underlying profit after tax from continuing operations for the full financial year to March 2019 is expected to be in the range of $170 million to $175 million, based on current market trends, reflecting the seasonality of the business and subject to no material changes in the operating or economic environment.”
That will be well up on the $142.2 million earned in 2017-18 – in fact the rise will be around 14% at the lower of the guidance range.
