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HRL Holdings grows revenues to $14.1 million, shares flat

The company continues to combat declining methamphetamine screening revenues.

bull and bear
Shares remain flat as the half year result seems to be as expected

HRL Holdings Ltd (ASX:HRL) has posted revenue of $14.1 million and an underlying loss after tax of $138,806 for its Australian and New Zealand lab operations.

The company has 10 lab locations and splits its revenue across HAZMAT services, geotechnical services, food and environmental lab services, and software service revenue.

HRL is recovering from a speed bump it hit in its methamphetamine screening work in New Zealand due to a government change to the guidelines on testing standards.

Late in November 2018, HRL noted that methamphetamine-related revenues were expected to decline to A$1.9 million in FY19, from A$4.6 million in FY18.

H1 FY2019 Segment performance

In a letter to shareholders today, CEO Steve Dabelstein wrote: “The first 6 months trading of the FY2019 year has been a mixed success.

“While the financial results reported for the period were impacted in some sectors by difficult trading conditions, the Directors and I hold a positive view for the future.

“The underlying EBITDA of $711,000 was down by $718,000 on the prior year period.

“The largest notable impact to the results came from the change in methamphetamine contamination testing standards in NZ.

HRL acquired  Analytica Laboratories in November 2017

“We are working hard to replace the sales and earnings through growth in other testing with Analytica achieving revenue of $6.051 million (+21% vs PCP $4.986 million) and EBITDA of $1.556 million (vs PCP $1.577 million) on a pro-forma basis.”

Quick facts: HRL Holdings Ltd

Price: 0.12 AUD

ASX:HRL
Market: ASX
Market Cap: $59.21 m
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