Stock of the day: ALS

(AI video summary)

This video was created on 27 May 2025 for IG audiences by ausbiz.

ASX code: ALQ

ALS reports strong revenue growth amid strategic changes

ALS, a leading testing and inspection company specialising in food, pharmaceuticals, and particularly mining and mineral exploration commodity certification, has posted a 16% increase in full-year revenue to $3 billion. However, underlying net profit fell slightly to $312 million.

The company announced it will pay a final dividend of 19.7 cents per share, bringing the total dividend to 38.6 cents, franked at 30%. This represents a solid return for investors despite the modest profit decline.

Headquarters relocation and market positioning

ALS also announced plans to relocate its headquarters from the United States (US) to Europe, where approximately 40% of its workforce is based. The company maintains there is low risk of any material impact on its business from potential tariff policies under the Trump administration.

ALS continues to focus on commodity certification and assay sampling technology. The business has incorporated new X-ray sampling technology to enhance its testing capabilities in the mining sector.

Investment outlook

The $350 million institutional placement raises questions about potential dilution for existing shareholders. Market analysts remain divided on the company's prospects, with some viewing the current share price as elevated.

Analysts note that while ALS operates a solid business model, the company has historically shown inconsistent performance over longer timeframes. The substantial capital raising may signal acquisition plans, though specific details remain unclear.

Investors may wish to monitor whether the raised capital will be deployed for accretive acquisitions or operational expansion before making investment decisions on ALS shares.