LaserBond Limited (ASX: LBL) is pleased to announce a 28.1% increase in profit after tax to $1.52 million from 1.19 million in the previous corresponding period. The revenue performance was also strong with a 13.4% increase to $13.4 million from $11.8 million in 1H21. These results were achieved with the ongoing backdrop of Covid, which prevented sales teams from travelling and resulted in delayed customer maintenance schedules for repair of worn componentry.

Chief Executive Officer, Wayne Hooper, said, “We always believed we had a strong business, but the past two years have proved just how secure and durable the foundations of LaserBond are. We have weathered the substantial disruption precipitated by the pandemic and been tested well beyond any expectation for an extended period of time, and we have produced the sorts of earnings increases that are commendable in a normal trading environment.”

During the half, the business also retained its focus on growth with negotiations and an $11,127 million capital raising resulting in the acquisition of QSP Engineering in January this year to continue expanding its geographic footprint, build capacity and operate closer to customer sites down the east coast of Australia. Investment in innovation also continued with a number of projects underway to further develop and test proprietary products and technologies and preserve LaserBond’s market leading position in advanced surface engineering. LaserBond’s excellent health and safety record also remains intact, with no major incidents between 1 July and 31 December.

Strategy and Outlook

LaserBond has also sustained its focus on growth over the past two years, as well as balancing the demands and challenges of the changed trading environment. On 1 February this year, the acquisition of a Queensland presence for the business was settled for $9 million, consistent with the strategic objective to secure sites closer to customers while building capacity across the business divisions. QSP Engineering is a specialist surface engineering business with a full suite of thermal spraying equipment laser systems that LaserBond can immediately upgrade with LaserBond IP and technology. The operations are expected to contribute revenue in the vicinity of $2 - $2.5 million between 1 February and 30 June 2022.

LaserBond has a strong track record for integrating bolt-on acquisitions to augment capacity and expand its geographic footprint in Australia. In FY 21, the Victorian operations were acquired, and while the LaserBond® cladding cell that was planned for installation soon after the acquisition in 1H20 could not proceed due to the restrictions, it is now operational and expected to add capacity and thus revenue in 2H22.

LaserBond remains strong, committed and on the cusp of realising some material gains from a decades-long innovation program. It has a rock-solid operating platform with a blue-chip client base in essential services sectors, a suite of proprietary products and technologies that are more effective and cost-efficient than the alternatives, and sizeable markets for these products and technologies in North America, Asia and in Australia.

At our Annual General Meeting last November, we revised our long-term revenue target of $40 million by the end of financial year 2022 to approximately $35 million based on the impact of Covid on our operations. Having extended our strategic plan to 2025 year-end, we expect to be able to achieve a revenue target in excess of $60 million. This target, however, is underpinned by a number of assumptions, including the presumption that the constraints to our business and our customers’ operations will have eased to the point that normal economic conditions can prevail.

Mr Hooper also said, “Over the last five full years, we have invested almost $3 million in our targeted research and development program, working closely with customers to identify solutions to problems and expanding those solutions to our broader customer base. And over that time, we have gained a significant market lead in our areas of expertise, developing products and technologies that are well ahead of the competition. As restrictions around the globe ease, we are in a position to profit from our R&D investment by selling these products and technologies into specific, valuable markets both here in Australia and offshore.”

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