ALS Limited Provides an Operational Update
ALS Limited (ASX:ALQ) provides an operational update and comments on FY20 results. It is important to note that ALS Limited reports FY20 ending on 31 March 2020, with the following financial year beginning on 1 April 2020. As it relates to the former, the company reports positive results, highlighting that revenues from its continuing operations are up 10 per cent to A$1.89 billion.
In addition to this, the business reports an underlying net profit after tax of A$189 million, up 4.3 per cent. Notably, the company emphasises that these results were within the original guidance, despite the impact of Covid-19 on its operations. ALS Limited Chairman, Bruce Phillips, demonstrates that the positive results, as well as the excellent liquidity position of the business, will help the company move through Covid-19 pandemic and emerge stronger.
The Chairman also highlights the resilience of the business, with the current liquidity position facilitating allowing the company to withstand the economic environment, as well as its expansion plans for the future. Moreover, Mr Phillips also emphasises that the long-term strategy of ALS Limited remains unchanged despite the economic downturn.
In order to achieve this, ALQ resorted to extended its debt facilities by $A200 million, increasing the group's available capital to approximately A$650 million. As such, the Chairman seeks to reinforce the company's acquisitional capabilities, seeking to take advantage of the opportunities which present themselves and capitalise on them.
Due to the fiscal impact of Covid-19 and in an attempt to preserve capital further, the company also announces that key management received their short-term-at-risk remuneration, at a lower level than the previous year. In addition to this, the business announced that no increase in fixed remuneration and directors fees are taking place moving into the new financial year. Furthermore, as a result of the uncertain economic environment, ALS Limited does not provide any guidance for 1H FY2021.
Conversely, the company reports an increase in revenues on its life sciences business of 13 per cent, representing a total of A$939 million for the year. Similarly, the company's industrial business achieved an increase in revenues of 18 per cent, relative to the previous year. These positive results indicate ALS Limited's resilience to Covid-19, partly a reflection of its diverse portfolio of businesses and operations.
The company CEO and Managing Director Raj Naran, emphasises the importance of its life sciences business, seeing great long-term growth potential. This is partly due to the new markets created by the Covid-19 pandemic, allowing for the business to fill the gap. The CEO outlines its operations in testing for Covid-19 in humans, in surface testing, and highlighting the potential for mandatory testing. As such, the company sees significant potential upside in the long-term.