ALQ - ALS Limited

[Dona Ferentes]

ALS has announced the acquisition of Investiga, a pharmaceutical testing business with operations in Brazil and the east coast of the USA.
Founded in 1993, Investiga is privately owned with 360 employees and generated AUD ~$20m of revenue in FY20. ALS will acquire 100% of the equity in Investiga at a multiple of 11x adjusted FY20 EBITDA, on a deferred basis, paid from existing debt facilities.

Investiga specialises in the cosmetic and personal care market, providing services to a portfolio of major global clients. Investiga will be integrated into the existing ALS Life Sciences network with a particular focus on growing in the USA, which represents over a quarter of the global market.

Trading update
The Group continued to trade resiliently in Q3 and early Q4 despite the uncertainty created by the COVID-19 pandemic. Management remains committed to aligning the cost base to client demand and managing CAPEX spend while maintaining focus on key growth opportunities.

• Life Sciences volumes have been stable with laboratories providing their essential services to clients in major markets.
• The Commodities division is starting to benefit from the improving cycle. Geochemistry sample flows increased by 13% in Q3 FY21 (compared to pcp) with this momentum continuing into early Q4. Major miners as well as junior and intermediate miners have contributed to this growth, although proportionally unchanged from late Q2 FY21.
• In the Industrial division, Tribology has seen some improvement in Q3 FY21
• whilst the trading environment for Asset Care remains challenging

 

[Dona Ferentes]

An “unprecedented” flow of cash into the high-risk mineral exploration sector has sparked a drilling boom that is causing huge backlogs at the laboratories whose assays determine success or failure.

More than $2.2 billion flowed into the 656 pre-revenue explorers on the ASX in the final three months of 2020, in a result that was 72 per cent higher than average and was described by advisory firm BDO as “unprecedented”. The $587 million spent on exploration by those companies was also well above average and 50 per cent higher than the June quarter...

...boom conditions were manifesting in many ways, including longer waits for drilling results to come back from laboratories.

“It is stretching out here to two months and normally you might expect three weeks or so,” said [John Holliday of TSX-listed Kincora Copper].

The laboratory backlog is even more severe in Western Australia, where the state government was last month forced to extend a deadline for Rio Tinto to submit waste rock samples from its Hope Downs 4 iron ore mine because there was no prospect that laboratories in the state would be able to assay the samples before July.

Laboratory giant ALS Limited said this week that the number of samples received had surged by 13 per cent in the three months to December 31. Longer waits for assay results could slow the speed at which explorers spend their cash bounty on drilling, with Mr Holliday saying geologists ideally wanted to know the results of their last hole before choosing where to drill their next hole.

“That is a problem if you don’t have the assays fairly quickly. You have got to keep drilling, you can’t just stop and slow down because you might lose your contractor,” he said.

Drilling company DDH1 Limited ... has its fleet of 96 rigs booked almost solid for the rest of calendar 2021. DDH1 founder Murray Pollock said mining companies and explorers were starting to panic-book rigs the way households had hoarded toilet paper in the early stages of the pandemic.

“The demand is enormous, we just cannot keep up,” he said. “I think there is a bit of panic out there and perhaps some companies are booking up rigs [because] they know they have to get in there, but they might not know exactly what they are going to do with them."

 

[Sean K]

An “unprecedented” flow of cash into the high-risk mineral exploration sector has sparked a drilling boom that is causing huge backlogs at the laboratories whose assays determine success or failure.

This is a weird company on the surface of it. 'Life Sciences and 'Commodities'... ??

Are you holding this Dona?

 

[Dona Ferentes]

This is a weird company on the surface of it. 'Life Sciences and 'Commodities'... ??

The scope of their activities is staggering. A global player in many fields.

Principal Activity is the provision of professional technical services, primarily in the areas of testing, measurement and inspection supporting environmental monitoring, food and pharmaceutical quality assurance, mining and mineral exploration, commodity certification, equipment maintenance and asset care operations.

Are you holding this Dona?

Not holding.. Used to, when it was Campbells and a whole lot simpler.

 

[Country Lad]

Not holding.. Used to, when it was Campbells and a whole lot simpler.

That brings back memories. That is one of the companies I charted by hand before we had charting programs. They were famous for making soap in those days. Had a particular interest because Bruce Brown and I did the same course and later we served on the same board. I lost interest in it eventually as well particularly when Bruce stepped down as CEO.

 

[Dona Ferentes]

This is a weird company on the surface of it. 'Life Sciences and 'Commodities'... ??

Global testing, inspection and certification business ALS Ltd today announced the acquisition of an initial 49% interest in NUVISAN, a pharmaceutical testing business with operations in Germany and France.

Founded in 1979, NUVISAN is privately owned with over 1,000 employees and generated ~EUR185 million of revenue and ~EUR40 million of adjusted EBITDA in FY21. NUVISAN operates in contract research organisation and contract development and manufacturing organisation markets providing drug testing services throughout the pharmaceutical development cycle in the fast-growing outsourced market.

Strategic rationale
The Group’s acquisition strategy is primarily focused on growing the Life Sciences division in strategic Food and Pharmaceutical geographies and broadening its service offering.

NUVISAN represents an expansion of ALS’ Pharmaceutical offering into the drug development part of the supply chain.... While aligning with ALS’ core focus on testing, this additional capability allows ALS to expand into new areas of the high-margin Pharmaceutical market.

The acquisition of this 49% stake in NUVISAN provides the platform for ALS to expand its offering from quality control testing into ‘upstream’ services in research and development which constitutes the majority of client spend. Growth of this area of the market is driven by major pharmaceutical companies outsourcing drug development research and CRO / CDMO testing due to increasing pricing pressure, lack of internal capability and expertise from external providers.

 

[divs4ever]

ALS expands Australian Geochemistry operation with acquisition of MinAnalytical ALS Limited (ASX: ALQ),

a leading global testing, inspection and certification business, today announced the acquisition of MinAnalytical Laboratory Services Australia Pty Ltd (‘MinAnalytical’), which operates a Geochemistry testing business based in Western Australia. Established in 2010, MinAnalytical has operations in Perth and Kalgoorlie and is expected to generate ~$18 million of revenue in calendar year 2021.
In addition to its fire assay testing capability, MinAnalytical utilises Chrysos PhotonAssay technology, currently operating three units with an additional two scheduled to be commissioned in 2022.
This technology complements ALS’ existing Geochemistry capability and offers the opportunity to further expand its mine site testing offering to clients. The acquisition of MinAnalytical will significantly increase the capacity of ALS’ Western Australian operations, initially by ~40%. There is the opportunity to increase this further by utilising unused capacity within MinAnalytical and leveraging ALS’ existing sample preparation network.
This is in addition to the ~15% increase in capacity across the global ‘hub and spoke’ Geochemistry network which is expected to be completed by the end of FY22. ALS will acquire 100% of the equity in MinAnalytical for $39 million, paid from existing debt facilities with no requirement for shareholder approval.
Operations will be amalgamated into ALS’ existing Geochemistry network in Perth and Kalgoorlie. Managing Director and CEO, Raj Naran commented “This is a strategic bolt-on acquisition for our Geochemistry business, which further expands our capacity and technological service offering to our clients.
It supports our strategy to grow mine site testing which delivers more stable sample volume throughout the commodities cycle.” Approved for release by the ALS Limited Board.

DYOR

i hold ALQ ( buying in shortly the Campbell Brothers restructure )

i find this move slightly surprising , i thought they were hoping to go more into 'life-sciences '

another one of those 'averaged down ' stocks for me

yes i am looking OK currently , but take care

 

[Miner]

some odd extract sharing with the team for perusal.
Alongwith chart, how the demerger cash and superficial friendship with FFI will hold.
Have a nice weekend

 

[Dona Ferentes]

ALS has upgraded FY22 underlying net profit after tax (NPAT) guidance to between $260 million and $265 million. The midpoint represents a 6.3% increase compared to the midpoint of the prior range provided at the H1 FY22 results announcement.

The upgrade is driven by several factors.

• Geochemistry is experiencing strong sample volume growth and price improvement as it benefits from the capacity increase being delivered during FY22, combined with the additional capacity provided by the acquisition of MinAnalytical in December 2021.
• Life Sciences volumes remain above pre-pandemic levels with all businesses and key geographies performing well.
• In addition, foreign exchange is making a positive contribution to the second half of FY22 compared to the prior corresponding period.

While there is some pressure on input costs across the Group, this is being managed by price increases and improved procurement practices, although the inflationary environment remains volatile.

and a few % up, now $12.30

 

[divs4ever]

yes another case of a little extra effort paying off

i bought into these after the Campbell's Brothers restructure ( August 2012 @ $8.71 ) and ' averaged down' carefully as low as $4.70 ( in April 2015 ) av. $6.40 ( and participate in the DRP )

not a rocket , but hasn't been a totally bad investment even if there were periods of nervousness getting here

 

[Dona Ferentes]

ALS has made a "positive start" to the 2023 financial year highlighting strong volumes in life sciences, where it has passed through price increases, and commodities.

• reported full-year 2022 net profit of $190.5 million, up 12 per cent, and
• revenue of $2.2 billion, up 24 per cent.
• Underlying profit of $264.2 million represented the top end of guidance of $260 million to $265 million.

ALS declared a final dividend of 17¢ a share, partially franked, payable 04 July.

 

[divs4ever]

Response to media speculation - exclusive negotiations with HRL Holdings

ALS Limited (ASX: ALQ) confirms that on 30 May 2022 it submitted a confidential non-binding proposal
(“Proposal”) to acquire 100% of HRL Holdings (ASX: HRL) for $0.16 per share paid in cash.
The Proposal was subject to a number of conditions, including satisfactory completion of due diligence.
ALS and HRL then entered into binding confidentiality and exclusivity arrangements whereby HRL has
committed to a period of exclusive due diligence and negotiations with ALS in relation to the Proposal.
These negotiations are ongoing, as is the exclusivity period. There is no certainty that the discussions will
result in a transaction. ALS will keep the market informed of any substantial developments in accordance
with its continuous disclosure obligations.
ALS is advised by Highbury Partnership and Baker & McKenzie.
Approved for release by a subcommittee of the ALS Limited Board.


===================================================================================

DYOR

i hold ALQ

 

[SyBoo]

I hope HRL tells ALS to go jump. ALS is big enough as it is, ( imo). [ I do not hold ALQ nor HRL]

 

[divs4ever]

ALQ ( as i understand it ) , got out of geo-technical a while back

so am wondering will they sell those assets or do a spin-off

but indeed ALQ did a slim-down a couple of years back , i wonder what is the asset they are chasing in HRL ( considering the premium offered on Friday's close ) , it must something they want badly

 

[Dona Ferentes]

ALQ has been traveling sideways for the last couple of years. Likely to open down on this UPDATE.
Has a PE of 17 and a 3% yield.

ALS Limited (ASX: ALQ) trading update

The Company is pleased to confirm the successful completion for the divestment of its Asset Care business to SRG Global (ASX: SRG) for A$80 million. The transaction was an important milestone for the Company’s overall portfolio re-alignment strategy, consistent with the 2027 strategic vision. The proceeds have been incorporated into the Company’s capital management framework, underpinning the strong balance sheet and re-allocating capital to higher growth end market opportunities.

The Company has continued to successfully execute its strategic growth agenda, delivering strong organic and scope revenue growth. As a result of the Company’s performance to date, it has upgraded its FY23 Underlying net profit after tax (NPAT) guidance range to between $312 million and $322 million, previously from $300 million to $320 million. The upgraded guidance to the previous range’s top end reflects the underlying strength of the Company’s
balanced portfolio and its leverage to resilient key end markets that are supported by strong growth drivers.

Economic headwinds continue to be well managed through price and cost discipline and with an emphasis on cash flow generation, all whilst operating within our target gearing range. The balance sheet is well positioned and following receipt of the proceeds of sale from the Asset Care business divestment the Company’s current leverage ratio is ~1.8x and has approx. $400 million of available liquidity (as at 1 March 2023).

 

[Dona Ferentes]

ALS has reported

• an underlying continuing net profit after tax of $321 million for FY23, up 23.4 per cent on the prior year.
• Statutory net profit after tax jumped 52.9 per cent to $291 million
• underlying continuing revenue of $2.4 billion, an increase of 19.5 per cent with strong performances in its environmental, geochemistry and metallurgy businesses, and supported by acquisitions made within its life sciences division.
• declared a partially franked final dividend of 19.4¢ a share, bringing the total dividend for FY23 to 39.7¢ a share.

 

[divs4ever]

my average buy-in price is $6.45 so the div. payout currently isn't that bad , factor in it still has room ( and ambitions ) to grow , and it isn't the worst stock on the ASX but entry price will be key , i never bought into Campbell Brothers back in the day , because it always looked over-valued to me .

 

[divs4ever]

ALS Limited (ASX: ALQ) Could Withstand Economic Downturns​

ALS Limited (ASX: ALQ) Could Withstand Economic Downturns

ALS Limited (ASX: ALQ) provides a variety of technical services to a broad base of business sectors, suggesting a strong defence against recessionary concerns.

thebull.com.au

i hold ALQ ( free-carried ) been a long bumpy ride though

 

[divs4ever]

ALS Limited (ASX: ALQ) delivered a resilient H1 FY24 financial result1
with Underlying NPAT2 above top-end of guidance range
• Delivered strong revenue growth, with underlying continuing revenue of $1,285 million, an increase of 7.4% (3.6% at constant currency (ccy)) due to strong performances within the Environmental, Metallurgy, Inspection and Oil & Lubricants (formally Tribology) businesses and supplemented by acquisitions made within the Life Sciences division.
• Statutory net profit after tax (NPAT) of $134 million, a decrease of 9.4%, impacted by the underperformance of Nuvisan business, increased one-off items, and disposal of the Asset Care business.
• Delivered industry leading EBITDA margin of 25.9%
• Underlying EBIT from continuing operations of $245 million, a slight decrease of 1.0%.
• Maintained industry leading operating margins of 19.1%, a contraction of 126 bps (at ccy), reflects the challenging economic environment and reduced new product development for the Pharmaceutical business. Margin contraction was partially offset by strong performances within Environmental and a resilient Geochemistry performance.
• Exceeded guidance (provided in July 2023) with underlying continuing NPAT of $158 million3 , above the top-end of guidance range by 2.2%. • Maintained world class health and safety outcomes, achieving 10% reduction on TRIFR YTD4 .
• Maintained or improved ratings for 3 out of 4 ESG rating agencies.
• Executed 6 acquisitions5 , contributing $36 million of revenue on a full year run-rate basis.
• Strong cash conversion (82% of underlying EBITDA) improved by 241 bps vs. pcp
. • Strong balance sheet supporting disciplined growth agenda, with 2.0x leverage ratio and available liquidity of $486 million.
• Underlying continuing earnings per share (eps) of 32.7 cents per share (cps), down 2.1%. Statutory EPS of 27.6 cps, down 9.6%.
• Interim dividend of 19.6 cps (partially franked to 20%), a decrease of 0.7 cps (3.4%) compared to H1 FY23, representing a payout ratio of 59.9% of H1 FY24 underlying NPAT. ALS Chairman Bruce Phillips commented,

“This was a good performance by our global business given the very challenging market backdrop of uncertainty in the geopolitical and exceeded the top end of our market guidance as the Company continues to demonstrate the value of its resilient hub and spoke operating model. The operating performance, our strong financial position and a positive outlook supports the declaration of a (xxx) dividend for our shareholders.
Pleasingly, this has been achieved whilst increasing our investments in quality growth opportunities during the first half of the fiscal year.” CEO and Managing Director, Malcolm Deane commented “The Group has delivered strong revenue growth and maintained industry leading operating margins despite challenging trading conditions.
The Group has maintained a strong balance sheet, high cashflow generation, and delivered scope growth while also maintaining its disciplined capital allocation framework in-line with the FY2027 vision.”
“During H1 FY24, our Commodities division has continued to demonstrate that it is a key enabler and benefactor of the global electrification trend and energy transition. Despite softer sample volumes, we have seen a persistent and structural change in demand for metals associated with battery storage and electrification, as evidenced in the performance of both our Geochemistry and Metallurgy businesses. The increased client demand for our industry leading high-performance method testing and value-added services has supported our strong market-share growth in downstream operations, leveraging our unique and distinct operating model of the Minerals division.
This has enabled our Geochemistry business to successfully minimize the overall cyclicality of its earnings.”
“Within Life Sciences, our Environmental business continued to deliver strong organic growth and margin improvement across all regions. The business has been able to demonstrate strong pricing discipline by leveraging its global scale, client value proposition, innovation journey and operational excellence. New regulations are expected to increase global demand for environmental testing services, for example PFAS testing, and our business remains well-positioned to capture this growth trend.” ”The Group has continued to make steady progress towards its long-term FY27 vision and financial objectives. We remain committed to the successful execution of this strategy. In addition, I look forward to exploring our strategy in further detail at our global investor day in 2024.” economic environment.

part of a much larger release


i hold ALQ ( free-carried ) been a long bumpy ride though , although i do have a reduction order in the market ( to help fund an investment outside the markets )

 

[Dona Ferentes]

ALS Limited (ASX: ALQ) has agreed with Nuvisan Pharma Holding GmbH to acquire the remaining 51% interest in Nuvisan (which includes Nuvisan GmbH and Innovation Campus Berlin) at nil cost. Nuvisan is a European-based contract research organization. It has two distinct and separable entities, Nuvisan GmbH focused on pre-clinical and clinical development services, and ICB focused on drug discovery services. Nuvisan generated revenues of ~A$245 million in calendar 2023. The transaction is effective 31 March 2024 for financial reporting purposes.

Strategic rationale
Following a strategic review of Nuvisan, ALS has determined that taking full control and ownership of Nuvisan provides the best opportunity to deliver earnings growth and maximum shareholder value optionality. The total acquisition price paid is attractive and timely for a European-based CRO. Nuvisan is expected to benefit from any potential market recovery, which is supported by expected long-term demand tailwinds in this sector.

Nuvisan will deliver a strategic footprint for ALS in Western Europe and a platform that enables access to the growing global pharmaceutical market, complementing ALS’ existing pharmaceutical businesses. It also extends and enhances existing capabilities and leverages the geographical footprint and client network. The ICB business is expected to benefit from revenue growth and cost rationalisation associated with the transformation program, outlined below.

Fair value adjustment
As required by accounting standards, a fair value adjustment process for the initial 49% investment carrying value has commenced and will be disclosed in the FY24 Financial Report released in May 2024. This process is expected to result in a write down of the majority of the existing carrying value. Book value as at March 2023 was approximately A$258 million.

Transformation program
With full ownership of Nuvisan, ALS will implement its transformation program to increase revenue from targeted investment in business development, and improve profitability across both businesses. The transformation program will focus on operational improvements and efficiencies, cost rationalization across facilities, and a re-focused business development agenda on core portfolio services.

The estimated restructuring costs associated with the program are ~€20 million over a two-year period, funded by existing liquidity and improved profitability within the business. The program is expected to deliver annual cost savings of ~€25 million. Most restructuring costs and annual cost savings are expected to materialise within the ICB business. The transformation project is expected to commence in mid calendar year 2024 and conclude in 2026.
,

pushing close to that 3 yr peak