ALS Soothes Investor Concerns

You can understand why Brisbane-based testing group, ALS Limited will offer shareholders a $175 million buy back, as well as a higher interim dividend after announcing an underlying net profit after tax of $70.1 million for the six months to September 30, 2017. While the company reported a solid underlying result, the after tax result including one offs saw the impact of more impairments on its assets – this time in its coal testing division.

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ALS Rejects ‘Opportunistic’ Bid

Is the takeover offer for ALS a replay of Treasury Wine Estates and the way it fought off numerous approaches from private equity groups trying to buy the company before a turnaround became apparent – a rebound that has seen Treasury shares double from the original offer price?

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ALS Between A Rock And A Hard Place

Laboratory service provider ALS (ALQ) is between a rock and a hard place. The rock is its major clients, the minerals explorers. The hard place is the current downturn in oil and gas drilling activity. The company delivered initial earnings guidance for the first half of FY15 at its AGM recently. It was subdued. Profit guidance for the first half is $74m, 18% below Goldman Sachs’ prior expectations and 26% below the prior corresponding half. The reasons for the downgrade remain the same as have prevailed for the past six months: market volatility, pressure on sample testing volumes, rate reductions in the coal business and oil and gas revenue slippage in the northern hemisphere. Positive aspects were few and far between, but brokers noted life sciences and industrial business segments are improving.

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