ALS Ltd (ASX: ALQ) announced its FY2025 results on Tuesday, delivering a solid underlying net profit after tax (NPAT) of $312 million. Despite the robust annual figures, ALS shares fell at ASX close yesterday and are down again today.
The declines have wiped 7.36% off the share price in the past 48 hours.
As of Wednesday lunchtime, ALS shares are trading at $16.34.
Just two weeks ago, the share price was smashing 52-week highs, trading at $18.02 per share.
The share price drop came after the company reported completion to fund growth and M&A activity.
ALS said its capital raise would fund four organic lab capacity expansions ($230 million), and balance sheet capacity (net transaction costs) to support future bolt-on growth initiatives ($120 million).
The raise was conducted at a 5.3% discount to Monday's close price of $17.64 and a 5.7% discount to the $17.71 volume-weighted average price.
While the announcement caused some share price shift, Macquarie Group (ASX: MQG) highlights other key takeaways from the annual results.
Macquarie's take on ALS
In a recent note to investors, Macquarie points to positive organic and acquisition momentum as key takeaways from the announcement.
ALS' underlying FY2025 NPAT of $312 million is -1% on the prior period and versus Macquarie's $313 million. It is within the $310-$313 million pre-guided range.
The Life Sciences (LS) EBIT result is slightly better and Commodities slightly weaker versus Macquarie's forecast.
"Environmental continues to be a strong performer within LS with 10% organic FY25 rev growth via price discipline, [market] share gains and regulatory driven demand growth (incl PFAS)," the broker said.
ALQ expects 20-40bp operating margin improvement for LS in FY2026, which compares to 62bp margin uplift delivered in FY2025.
Meanwhile, Macquarie also points out that recent ALS acquisitions are performing at or better than expectations, which helped drive LS FY2025 earnings.
"Further margin improvement from [acquisitions] is likely in FY26 incl from Nuvisan with €11m [$19.34 million] of gross savings expected and cost-out program 6 months ahead of schedule," the note said.
Minerals sample flows have also maintained momentum in Q4, with volumes 6-7% higher than the previous period.
"This is driven by the majors & mid-tiers (75% of ALQ customer base) without any material benefit from juniors (latter 25% of rev)," Macquarie said.
"Any potential pick-up from the juniors would be additive to the current recovery and historically has been at higher margins given greenfield nature."
In the second half of this financial year, the Minerals price/mix was down around 4% while Commodities margins were flat. Macquarie expects adverse pricing to continue in H12026, before recovering in the second half as demand improves.
"We fct 60bp/120bp of Commodities EBIT margin expansion in FY26/FY27."
Macquarie on ALS earnings changes
Macquarie notes that ALS has provided building blocks for growth in FY2026. This includes a 5-7% organic revenue growth guidance versus 4.9% in FY2025.
"We reduce [our] FY26/FY27/FY28e EPS [earnings per share] by 4%/4%/1% on lower Commodities earnings (timing of price/margin recovery)," Macquarie noted.
Due to research restrictions, Macquarie cannot advise its valuation on ALS shares at present.
