ALS in trading halt as RBC analyst flags 'curious' equity raise
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More news: Laboratory testing group ALS has entered a trading halt after announcing a $350 million equity raise to fund future growth.
RBC Capital Markets analyst Nicholas Daish said the raise "appears curious" given two-thirds of the proceeds will be utilised across a five-year period, with the balance being used to fund the company's mergers and acquisitions pipeline.
Daish also said ALS' full-year result and outlook commentary was in line with market expectations, after the company reported a 1.4% drop in underlying net profit for the 2025 financial year. However, he noted ALS would need to grow inorganic revenue to maintain current market forecasts.
ALS posts 1.4% slide in underlying profit, unveils $350m raise
The news: Testing and verification services business ALS reported a 1.4% slide in underlying net profit after its commodities division saw softer growth during the 2025 financial year. The laboratory testing giant also unveiled a $350 million equity raising to fund future growth.
The numbers: ALS recorded underlying net profit after tax of $312.1 million, down from $316.5 million a year earlier. Statutory NPAT jumped to $256.2 million from $12.9 million, with the prior-year result dragged down by a one-off impairment and restructuring provisions for its acquisition of pharmaceutical research and development business Nuvisan.
The company reported a 16% rise in underlying revenue to $3 billion, driven by organic and scope growth within its life sciences segment, offsetting softer growth at its commodities division.
ALS declared a total dividend of 38.6 cents per share, down from 39.2 cents in the previous year.
The context: ALS said the softer underlying NPAT result was due to fluctuating exploration environment impacting commodities, unfavourable foreign exchange impacts, and higher interest costs linked to recent acquisitions.
The company will also launch a $350 million institutional placement, with $230 million allocated to fund organic investment in its laboratory network. The remaining $120 million will be used to provide flexibility to fund other growth initiatives, including ALS' mergers and acquisitions pipeline and transaction costs.
ALS will also launch a share purchase plan to raise a further $40 million.
New shares under the placement will be offered at $16.70 per new share, representing a 5.3% discount to the last closing share price of $17.64.
The source: ASX
