LaserBond (ASX:LBL) specialist surface engineering

LaserBond Limited (ASX:LBL) CEO Wayne Hooper talks about the company's strong 1H21 results despite the impact of COVID-19, its focus on growth opportunities to expand its national footprint, and business strategy, including potential growth via acquisitions.

Rachael Jones: Hello. I'm Rachael Jones for the Finance News Network. Joining me from LaserBond is CEO Wayne Hooper. Wayne, welcome back to the network.

Wayne Hooper: Thank you, Rachael. It's a pleasure to be here.

Rachael Jones: Now LaserBond focuses on the development and application of materials, technologies, and mythologies to increase operating performance, and the wear life of capital intensive machinery components. Can you tell us more about this?

Wayne Hooper: Sure. We started the company, it's a private company, in 1992. Since we started, we've basically been targeting reducing the operating costs in a whole range of industries, by making wearing components last longer. So we use advanced surface engineering to deliver significant cost savings to our customers. We've grown considerably. We now operate on three sites in Eastern Australia, and have about 110 employees. And we're growing the business very strongly.

Rachael Jones: Now to your first half 2021 results. Could you talk us through the highlights, starting with the financials?

Wayne Hooper: Well, certainly the travel restrictions from COVID had a little bit of an effect on us, but despite that we've grown the business significantly. EBITDA was up over 13%, to $3.1 million. Net profit before tax was up by nearly 8% to $1.7 million. And net profit after tax was up to $1.2 million, which was a nearly 3% increase on the prior corresponding period. So based on that, they're good results, we've actually increased our fully franked dividends by more than 20%, to .6 cents per share.

Rachael Jones: There's some great results there, Wayne. Now, what do you believe drove these results?

Wayne Hooper: Well, we were able to increase our sales revenue by 5%. Our products division was actually up by 45%, so we had strong growth with our products exported around the world. So, our services division was down a bit because some of our customers were delaying their maintenance activities because they had their sites locked down due to COVID. However, we've seen a good return to our services division growth in the second half of this year. In other words, since the beginning of January.

Rachael Jones: And Wayne, can you tell us about the strategy and the opportunities for the company?

Wayne Hooper: Well, so as I mentioned, the services division is about maintaining equipment, large components of equipment, and returning them to service here in Australia. We're planning to expand that into states, to grow our domestic footprint. So we've got plans to put facilities in other states, including WA and Queensland. In our products division, we plan to continue the strong growth that we've just achieved through our existing customers, as well as the new products we have recently launched in the North American market in particular, and also in other markets. So we're talking steel mill rolls, which is a tremendously growing industry, as well as other products that we're launching overseas.

And we continue our R&D efforts to develop products for our other technologies, including NanoCloud and MicroCloud. In our technology division, which is involved in licensing equipment and know-how overseas, we've got some strong interests for that. We've looked at signing a technology license with a North American company. It's looking very positive right now. In addition to that, we've got our new eCloud technology, which is a hard replacement. And there's a lot of interest in that, both domestically and overseas. So we're continuing our R&D, and we'll continue to grow the business through all of those strategies.

Rachael Jones: And now to financials. Can you provide a snapshot?

Wayne Hooper: Yes. Rachael, we're in a very strong position to continue our growth. For the half year, our operating cash flow was up over 300%. We have a very low debt position, that's aside from the premises, or the leases on the premises that we occupy. The only debt we have is some small amount of equipment finance, which is secured by that equipment itself. So there's very low debt. And we're in this very strong position to continue the results.

Rachael Jones: Excellent. And to the last question now, Wayne, is there anything else you'd like to add?

Wayne Hooper: All I'd like to add is that we have a history of delivering strong growth, strong, strong growth, and returns to our shareholders, both in terms of revenue and profits, and fully franked dividends. So we'd certainly welcome any shareholders and their share register, that want to be part of our continuing growth.

Rachael Jones: Wayne Hooper, it's great to see you again, and thanks so much for the update.

Wayne Hooper: Thank you, Rachael. It's been my pleasure.

Source: Finance News Network