ALS Global (ASX:ALQ): The $12bn ‘picks and shovels’ company from Brisbane that has slipped under the radar…until now

ALS Global (ASX:ALQ) is currently in the Top 50 ASX companies, capped at ~$12bn. It is capped slightly higher than the ASX itself (i.e. the ASX as a listed company in its own right). The list of companies that trail it include: JB Hi-Fi, NextDC, Harvey Norman, Mirvac, TechnologyOne, AGL, Downer, Life360 and AMP. Many of these would be house-hold names but not ALS, a company that has gained over 35% in the last year. One article alone won’t change things, but we think investors should know a thing or two about it, even if they ultimately put their money elsewhere.

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Who is ALS?

The company traces its roots to a soap and chemical manufacturer known Campbell Brothers, established in 1863 in Brisbane, and it first listed on the ASX in 1952. The business that would become ALS (initially “Australian Laboratory Services”) began in the 1970s as a geochemistry lab in Brisbane serving mineral explorers and was acquired by Campbell Brothers in the early 1980s; only dropping the name in 2012. Over the past few decades, ALS has evolved into one of the largest independent providers of testing, inspection, certification and analytical services in the world, with operations across more than 70 countries and hundreds of laboratories.

The company’s core activities revolve around analytical testing and data services for a wide array of industrial and scientific needs. ALS’s divisions broadly cover Commodities (notably mining and geochemistry), Life Sciences (including environmental, food, pharmaceutical and health-related analyses), and various industrial testing services such as oil and lubricant analysis, environmental monitoring, and inspection services.

Services are typically highly technical, science-based and regulatory-oriented, tailored to sectors such as mining and exploration, environmental compliance, industrial reliability, food safety, and pharmaceuticals.

A picks and shovels business

In terms of investment characterisation, ALS Global is often thought of as something akin to a “picks and shovels” business. That phrase typically refers to firms that supply essential goods or services to an industry regardless of the direction of end-market cycles — analogous to the suppliers of tools during a gold rush. At times, some have suggested that they are better to own rather than companies doing the mining, and this logic has been considered applicable to other industries too.

ALS does not directly extract minerals, produce pharmaceuticals, or manufacture consumer products itself; instead it provides highly specialised analytical and assurance services that are fundamental inputs for clients across mining, environmental monitoring, food safety, industrial reliability and health sectors.

This business model gives it a degree of resilience and diversification that can appeal to investors looking for exposure to broad economic and regulatory trends rather than single-sector commodity price risk — though like all TIC firms it is still exposed to cyclical demand in underlying markets.

Good recent results, and not just its past financial results

ALS has shown solid growth and resilience, albeit with some division-level variation through different market cycles. ALS follows an April to March financial year and, accordingly, the latest annual results (for FY25) came last May. The company reported underlying revenue near A$3bn and a slight increase in underlying earnings before interest and tax (to $515m) , supported by diversified demand across its business lines.

Its underlying profit came in at $312.1m which was 1.4% down due to forex, while its statutory profit was $256.2m. It paid a final dividend of 19.7c per share and recorded $590.6m free cash flow (up 13%).

In the first half of FY26 (to September 2025) the business again delivered double-digit underlying revenue growth and margin uplift, with strong contributions from its Commodities division and improving performance in Life Sciences, along with a healthy interim dividend return to shareholders.

But what many investors may have forgotten is that the company raised $350m at the same time as its FY25 results. It was done at $16.70 per share, modest dilution at the time but a bargain relative to the price it is trading at now. The stated intent was to fund organic investment in capacity-constrained laboratory hubs, particularly in minerals testing and environmental science facilities, and to give ALS greater flexibility for acquisitions and other growth initiatives while maintaining a strong balance sheet. About $230 million was earmarked for brownfield expansion of key hubs, with the remainder for M&A and strategic flexibility.

The outlook

Looking forward, ALS’s outlook looks positive, reflecting both ongoing diversification and growth ambitions. Management has articulated plans for sustained mid-single-digit organic revenue growth, continued margin improvement, disciplined capital deployment and further return of capital to shareholders in line with stated medium-term targets.

The company expects its Commodities division to benefit from improving pricing and exploration activity, while Life Sciences and environmental testing should grow steadily driven by regulatory and compliance trends. Balance sheet strength and liquidity are positioned to support further bolt-on acquisitions and capacity expansion under its value creation framework.

Analysts covering the company expect $3.3bn revenue in FY26 (up 11%) and a $340m profit (a >30% hike from the year before). For FY27, up $3.6bn (up 9%) and a $436m profit. This derives multiples of 16.1x EV/EBITDA, 31.2x P/E and 1.4x PEG for the latter year. Management has linked its expansion to targets of pushing revenue toward around A$3.3bn and underlying EBIT to about A$600m by FY27, with a margin floor target of around 19%.

Overall, there is a lot more good than bad at the moment, although it is not risk-free. he company remains exposed to cyclical dynamics, especially in its commodities testing business: exploration activity can vary with commodity prices and capital budgets of mining companies, leading to volatile sample flows and revenue. When exploration testing softens, it can compress margins and overall earnings, even if other divisions are solid. In some recent periods commodities conditions weighed on parts of ALS’s results.

Foreign exchange effects and higher interest costs linked to acquisitions have also dampened net profit in past reporting periods (yes, there was only a 1.4% decline in profit but it happened in the same year there was double-digit EBITDA growth), and that sort of financial pressure can bite if growth slows. Integrating acquisitions and realising synergy targets is another execution risk; if expected improvements in margins or revenue do not materialise, the return on capital could be lower than hoped. Finally, while the raise bolsters liquidity, timing and scale of future M&A and how value accretive such deals are will be key — missteps could erode investor confidence and put pressure on valuation.

Conclusion

For investors who learned about ALS and invested months of years ago, they have reaped significant rewards. There is every chance these could be repeated in the years to come, but of course it is not risk-free. Catalysts for future growth include continued execution on growth targets, integration success, and favourable long-term testing demand. Risks revolve around cyclical end markets, execution of capital deployment, and some near-term earnings pressure from costs and margin dynamics.