Chairman’s and CEO’s report Welcome to ALS’s 2019 Annual Report. ALS continues to grow and thrive in its quest to become a top-tier global testing, inspection & certification company. We make positive contributions to global communities with our assurance work and sustainability programs. We now have over 15,000 employees conducting operations in 65 countries, generating revenues in excess of $1.6 billion per annum.
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ALS LIMITED AND ITS SUBSIDIARIES | Annual Financial Report for the Year Ended 31 March 2019 | Chairman’s and CEO’s report
FY2019 saw another strong financial performance from our continuing operations and demonstrated that the Group remains on track to achieve the goals outlined in its five-year strategic plan.
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Despite uncertainty and volatility in global markets, underlying Net Profit After Tax (NPAT), EPS, and dividends to shareholders increased more than 25% from the previous year. This was primarily due to continued improvement in market conditions for those business streams exposed to mineral commodities markets, as well as successful expansion in the less cyclical Life Sciences operations, via acquisitions in the food and pharmaceutical sectors in mainland Europe, South America and North America. During the year, all segments of the Company contributed positive operating results and benefited from a strong focus on cash and debtor management, continued aggressive cost management and innovation and technological advances. In April, the Company completed the sale of its Environmental testing business in China, to SUEZ. This followed the divestment in March of the Life Sciences Consumer Products testing business based in Hong Kong and mainland China and followed a decision that, given the small size of each of the businesses relative to the market in which they operated, the Groups capital was more efficiently allocated by investing to align with expansion in the food and pharmaceutical sectors in Asia, Europe and the Americas. As previously foreshadowed, the Group decided to exit the remaining laboratory services component of its Oil & Gas business. Considering the continuous challenges faced by the business and the lack of potential buyers with attractive offers, Directors decided to close the operation in March 2019.
Financial Performance The Group achieved an underlying NPAT from continuing operations for the financial year ended 31 March 2019 of $181 million, representing a 27.3 per cent improvement on the previous years’ comparative underlying result. The statutory NPAT was $153.8 million. Group revenue from continuing operations was $1,644.9 million, up 15.1 per cent on the $1,446.9 million recorded for the same comparative businesses in FY2018. The Company remains committed to its strategy of maintaining a strong balance sheet throughout economic cycles and maintained a conservative gearing level at 36.1 per cent, up marginally from 31.1 per cent from last year. The Group’s leverage ratio remained stable at 1.8 times at year end, up marginally from 1.7 times last year. In April, the Company announced a new issue of long-term senior notes extending the Group’s weighted average debt profile to 5.3 years. The solid financial performance of the business together with the strengthening cash flows over the course of the financial year allowed the Board to deliver a 32.4 per cent increase in full year dividend per share. The Board has declared a 35 per cent franked final dividend of 11.5 cents per share, bringing the total full year dividend to 22.5 cents per share. This is consistent with our stated policy to pay out approximately 50-60 per cent of underlying NPAT. A more comprehensive overview of the Group’s financial performance is set out in the Directors’ Report.
