An upbeat trading update for the six months to March 31 from Brisbane-based global testing group, ALS.
The update came with news of a small – US20 million dollar – acquisition of a Brazilian company that does pharmaceutical testing in that country and along the East Coast of the USA.
ALS said did not reveal the cost of the purchase except to say that the deal will be priced at 11 times adjusted 2020 earnings for the Investiga.
ALS says Investiga generates $US20 million in annual revenue and employs round 350 people.
The company operates in Brazil as well as the east coast of the US.
In a trading update, ALS said its life sciences business has been the most stable part of operations throughout the pandemic, while its commodities testing business is starting to bounce back.
“The Group continued to trade resiliently in Q3 and early Q4 despite the uncertainty created by the COVID-19 pandemic,” the update said.
“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.
The balance sheet remains strong with in excess of $US$600 million of liquidity available as at 31 January 2021.
The shares rose 0.6% to $9.55.