ALQ's half year profit report is out soon. Last year, 26 November, so in the next 2 weeks. With it, they had a fat capital raise of $325m. At end year, they consumed the proceeds impairing goodwill by $314m. An out-and-out loss and dilution for shareholders.
The full year revenues were down hard. Life Sciences up on acquisitions offset a bit the big fall in O&G (-$101m).
Will this have changed in the last 6 months? I don't think so. Metallurgy activity will be down a lot and O&G will have fallen again. And the whole minerals and energy sector (59% of revenues) will have been fiercely price competitive, so no profits there.
Management will energetically point to the very recent rebound in commodity prices, but I don't see that being translated into better testing margins in the short or medium term. The miners will be very jealous on costs for a long time.
I think the result will be sorely disappointing and the SP will revisit the $3 lows of February. I think the business attractive at that price, but not at $6.
i don't short, but predict the jackals will be all over this stock.
Good luck, holders!
Ash
ALQ Price at posting:
$6.19 Sentiment: Sell Disclosure: Not Held
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