Given the upgrade to guidance provided by ALS (ASX: ALQ) 1 March, today’s revelations that the site testing, and inspection company’s FY22 underlying net profit after tax was up 42% to $264.2m - at the top-end of the guidance – shouldn’t have been a big surprise to the market.
Nevertheless, the share price was up 2.50% after lunch with the market clearly happy with the group’s decision to pay a final dividend of 17c per share, partially franked, on July 4 – boosting the full year payout by 42% to 32.8c.
Highlights of today’s FY22 result for the 12 months to the end of March included:
12% jump in full year after-tax profit to $190.5m
Revenue jumped 24% to $2.2bn
Underlying earnings per share of 54.7 cents per share (cps), up 42.1%
Life Sciences underlying EBIT margin of 16.9%, up 68 basis points (bps)
The company also ended the year with a strong balance sheet with 1.9x leverage ratio and around $432m of available liquidity and 15.3x interest coverage with weighted average debt maturity of 4.9 years.
The weighted average debt maturity increases to 6.9 years following the refinancing of US Private Placement debt to be funded in July 2022.
Management attributed much of the result to a strong performance from the company’s life sciences and commodities divisions, which saw double-digit growth compared to the previous period.
ALS chairman Bruce Phillips described the FY22 result as "another very strong performance by our increasingly global enterprise".
“FY22 also marks the end of our most recent five-year strategic plan. Despite some ambitious objectives, the management team has exceeded expectations, delivering revenue growth of 73% and underlying EBIT growth of 113%,” Phillips noted.
The company is experiencing strong volumes across the life sciences and commodities divisions.
Management notes that while the environment remains volatile, price increases and procurement practices have allowed the division to manage inflationary pressure to date.
The company has committed to achieving carbon neutrality in FY231, a 6% reduction in carbon intensity, and 90%-plus reliance on renewable electricity across ALS global operations.
Management also notes that the commodities division, particularly geochemistry and metallurgy, are continuing to benefit from strong demand for commodities and energy metals.
Strong volume, price increases and increased capacity in geochemistry are also driving further volume growth and margin accretion in the first months of FY23.
Meantime, metallurgy activity continues to be strong with coal and Inspection trading in-line with FY22 levels.
ALS: A 12 month share price snapshot.
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