XRF Scientific Delivers Record Half-Year Profit Amid Strategic Acquisitions

Strong Financial Performance Amid Global Mining Demand

XRF Scientific Limited has reported a solid half-year result for the six months ending 31 December 2024, underscoring its resilience and growth in the analytical instruments sector. Revenue from ordinary activities increased marginally by 0.3% to $28.7 million, while net profit after tax climbed a notable 11.8% to $5.0 million. This performance was buoyed by a record quarterly profit before tax of $3.8 million in the December quarter, reflecting strong operational momentum.

The company’s growth was largely driven by sustained demand from the global mining industry, with international sales expanding across Asia, the Americas, and Europe. The Consumables division stood out, delivering a record profit before tax of $3.6 million on revenues of $9.6 million. This segment benefited from record product volumes and a growing installed base of machines, which in turn generated recurring revenue streams through consumable sales and platinum labware recycling.

Strategic Acquisitions Bolster Market Position and Diversification

During the half, XRF Scientific completed two key acquisitions that are expected to enhance its product offerings and diversify revenue sources. The acquisition of Labfit Pty Ltd, a manufacturer of carbon sulphur analysers, pH analysers, and laboratory weighing systems, expands the company’s footprint into new sectors including water, beverage, environmental, and agriculture, alongside its established mining markets.

Additionally, the company exercised its call option to acquire the remaining 50% of Orbis Mining Pty Ltd, consolidating full ownership of a business that contributed $2.3 million in revenue and $697,000 in profit before tax during the period. Orbis Mining’s international sales growth and new distributor partnerships, particularly in the Americas, position it well for continued expansion.

Capital Equipment and Precious Metals Divisions Show Steady Progress

The Capital Equipment division recorded a profit before tax of $1.8 million from $10.1 million in revenue, supported by strong sales in key global markets, primarily mining. While profit was slightly lower than the previous half due to timing of Orbis sales, the division anticipates growth in spare parts and service revenue from its expanding installed machine base. The introduction of the xrTGA instrument is highlighted as a promising future growth driver.

The Precious Metals division generated $10.3 million in revenue and $1.7 million in profit before tax, with recurring orders from mining customers sustaining demand. Notably, the Germany office returned to profitability, signaling improved operational efficiency and market penetration in Europe.

Balance Sheet and Cash Flow Remain Healthy

XRF Scientific’s balance sheet remains robust with $8.1 million in cash and $1.2 million in short-term debt related to its Melbourne platinum factory, with negotiations underway for more favourable long-term terms. Operating cash inflow doubled to $4.4 million compared to the prior half, despite increased investing and financing outflows driven by acquisitions.

The Board has maintained its policy of paying one dividend per year, to be determined after the full-year results, reflecting a cautious but shareholder-friendly approach amid ongoing investments.

Outlook and Strategic Focus

Looking ahead, XRF Scientific is focused on integrating its recent acquisitions, expanding its international footprint, and leveraging its diversified product portfolio to capture growth opportunities. The company’s cross-selling strategy is gaining traction, with customers increasingly purchasing multiple products across divisions, enhancing revenue resilience.

While lithium chemical prices stabilised after a period of decline, the company managed to maintain steady profit per unit sold by adjusting selling prices and production costs accordingly. The ongoing development of new machines slated for release in 2025 signals a commitment to innovation and market leadership.