Noticed the incoming CEO doesn't hold

Lots of sells from the instos recently so I decided to follow early last week after EOFY and take the profit left.

Good tailwinds but let down by debt pile and poor execution of Nuvisan business. Possibly Nuvisan is more cyclical than expected

Will watch from the sidelines for now

[not held]

ALS figures beat the market consensus and provided a bullish outlook. However it seems more were focused on increase in debt and intangibles.

I understand ALS provides an "essential service" via laboratory testing etc but can't understand why they are not reducing their debt. On the flipside I was taught that debt increases interest tax shields and possibly has a positive impact on free cash flow.

Ord Minnett also downgraded to sell based on not being able to meet capital costs with earnings from spending big trying to expand their global operations to meet the boom in resources and probably explains why share price fell despite the positive outlook

Other negative include the Nuvisan life sciences acquisition which lost money in the last 6 months and dragged overall performance for life sciences. ALS blamed performance on economic headwinds which is a bit surprising.

[held]

After a shock period including sudden resignation of the CEO for personal reasons, which saw a selloff similar to Megaport when their CEO resigned, ALS has managed to lift guidance and still sees strong trading conditions

Underlying net profit after tax (NPAT) guidance range to between $312 million and $322 million, up from $300 million to $320 million

Probably a good option to be in ALS if you don't want risk owning a mining company in gold or base metals but prefer some indirect leverage to mining and other industries via their testing and analysis services.

Still have a high debt to equity ratio though. Can't seem to shake that monkey off their back.

[held]

ALS FY22 Results

https://cdn-als.dataweavers.io/-/media/files/asx-announcements/2022-05-25-als-investor-presentation-fy22.pdf

https://cdn-als.dataweavers.io/-/media/files/asx-announcements/2022-05-25-als-full-year-results-fy22.pdf?rev=802fa824645b463ba719037ffabb5f78

Underlying NPAT of $264.2 million, up 42.1%, at the top-end of the guidance (upgraded in March 2022) of $260 million to $265 million

Pretty solid result. Rallied 6% on the news.

Also hidden in the presentation is increased operational cash flow compared to last period.

Only negatives:

1. Addiction to debt. Debt went up by $288m. That was probably used for acquisitions including Minanalytica
2. Dividend partially franked to 30% at $0.17 while before it was 70% at $0.14. So overall less dividend due to the reduced franking.

Held