Solid result from XRF earlier this week, with underlying PBT up to ~$3.7m from ~$2.4m on the same time last year (factoring out JobKeeper payments).

Revenue up 24%, EBIT up 19%, and NPAT up 17% to ~$2.8m for the half. Really consistent execution from management, and their commentary is so succinct and to the point that it’s simple to track the progress of each division – each of which, incidentally, they state is looking positive heading into the second half.

A quick glance at the operating cash flows shows a near 200% gain on the previous half (again, when backing out JK payments last year of ~$1.7m), which shows how resilient the business has been under continuing macro pressures. We should see a very healthy net positive cash flow in the second half I think.

Lithium prices have soared lately causing the balance sheet to expand on inventories, despite the cash balance retreating -12%. This should head north again in the second half. Some stuff about Platinum loans being converted that @Wini will no doubt shed more light on and which I don't understand, but given cash and receivables outweigh all liabilities, doesn't seem like anything to worry about there.

All divisions reported sales increases on the previous half and mostly smashed the corresponding period sales numbers, apart from consumables which was attributable to the newly acquired Orbis Mining division (a small loss of $95k). Management have stated Orbis numbers will look much better in the 2nd half as they close a number of sales which were delayed. Margins in this segment have shrunk a little on the acquisition it seems, so we’ll need to watch what happens here closely.

Finally, management have flagged a “strong trading period” for the second half, so the business appears to be firing on all cylinders. 

Time to update the valuation.