XRF - XRF Scientific

galumay said:

Amazing run! As I have said, it made no sense to me, I had deep inside experience and knowledge and I could not see the potential. Just shows there are lots of ways to be wrong in the investing business!

I guess the thing I try to remind myself of is that sins of omission are much less of a threat than sins of commission, meaning that missing out and my analysis and research turning out to be 100% wrong in this case is much better than when I have committed capital to buying a business where it turned out my analysis and research were 100% wrong!

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if you consider XRF as a 'tech stock ' rather than a 'mining services ' stock the logic makes perfect sense , it has ridden on the coat-tails of other 'growth stocks' ( some of whom can't even make a profit,even today )

i had similar success with PME using the same logic , and avoided the 'buy now pay later ' stocks on the logic that it would be hard to make a profit given all the salesmanship needed to establish market share ( had a couple of other holdings destroyed by outrageous travel expenses racked up by sales-teams )

for example i did very nicely on minnows stocks that via reverse take-oven morphed into 'crypto ( related ) stocks ( i also took the opportunity to exit when it turned 10 or 20 bagger mainly because they had virtually no earnings )

maybe a course in salesmanship ( spin-doctoring ) would help so you can look behind the gloss , an easy start would be looks at some of Marcus Padley's views on company presentations ( in general )

the masses often get enthralled in the narrative and bamboozled by the financials

now back to XRF in particular , has the 'growth story ' reached the peak ?

although i still hold XRF i have also taken out more than double my original investment cash along the way

galumay said:

I first started talking about XRF with other investors and fund managers years ago when they were round 15c, told them all there was no real structural growth possible in this business.

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i bought my second parcel @ 16 cents as i was forecasting a mining downturn/consolidation back then,so was not expecting growth at that time and was thinking they would pour time and staff into R&D in that period , finding a better way to do what they do , but instead we had a mining 'super-cycle ' so despite my inaccurate forecast luck helped me out once again ( and realizing that reminded to rescue the investment cash in a timely manner )

I just considered as a business that was a supplier in the industry I worked in, I had intimate, inside information of what they made in terms of both hardware and consumables, and I understood the existing and potential market - but I was wrong on all of it, as were all the senior lab chemists that I talked about it with! None of us saw how it could have any meaningful growth in the sector.

I was specifically rejecting the narrative and hype, I don't read company presentations, my analysis was based on deep inside knowledge of the sector, business, customers and competitors as well as my usual attention to financials. I was the dissenting voice amongst among a group of small fund managers and professional investors who actually accepted the narrative from XRF - and in this case it turned out to be correct!

I really don't mind that I got it wrong & missed out, as I said that is much better than getting it wrong and being invested in something! I do like to try and learn from my mistakes though and note what I did wrong, in this case I don't think there is a takeaway lesson, it just worked out differently to my expectations.

better to miss out , than invest in a train-wreck , i have missed my share of rockets as well

the hardest part of investing is knowing when to buy in during terrible news and when to dump and run

to my thinking investing is a game of percentages , some will win despite predictions and some will implode despite expert forecasts ( even when backed via due diligence )

what would be interesting would be to know how many fund managers and professional investors still hold ( some ) XRF and how many took profit at say 2 or 3X

March 2024 Quarterly Trading Report

The March 2024 quarter was a positive period, with all divisions contributing to the result.

The mining industry remained the key driver of activity. Consumable sales remained strong at $4.5m for the quarter compared to $4.6m in the Previous Corresponding Period (PCP).
The mining industry continues to be the main driver of sales activity, across both production and exploration.
Selling prices and production costs were affected during the quarter by falling lithium raw chemical prices.
Capital Equipment product sales have been robust at $5.0m compared to $3.9m in the PCP.
Our machines orderbook remains strong and we expect the June 2024 quarter to be highly positive for the division.
In March we launched a next generation flux weighing system, xrWeigh‐S‐FL.
Additional new products are currently under development for launch in FY25.
Orbis laboratory crushers continue to sell well, due to a strong product reputation that is growing globally.
A majority of growth opportunities are in the gold sector, in particular the Americas.
Our current customer base consists mainly of commercial labs, and we are working towards growing sales to production mining companies.
Precious metals sales were positive at $5.6m for the quarter compared to $5.0m in the PCP.
New metal product sales were very strong, which are often bundled together with fusion machines from the Capital Equipment division. Ongoing orders for recycling of platinum products remained at higher levels, with demand being generated by sample analysis volumes in the mining industry and various industrial sectors.

We expect the June 2024 quarter to be positive for all divisions.

During this period our key growth focus areas are new product developments, international sales growth, and M&A opportunities.

Please direct any inquiries to: Vance Stazzonelli Managing Director

i hold XRF ( 'free-carried' )

realistically it probably just beat real inflation ( so, OK without being jaw-dropping )

From the article:
7 consecutive years of NPAT growth. Robust demand for its services and equipment. Expanding to non domestic markets.

Looks like monthly momentum is fading a bit from the chart? One to add to the crash list of possibles for me.

Not held
Not on current buy list

XRF Exercises Orbis Call Option

XRF Scientific Ltd (“XRF” or “The Company”) is pleased to advise that it has exercised a Call Option to acquire the remaining 50% of Orbis Mining Pty Ltd (“Orbis”).
Settlement of the Call Option shares is conditional on the satisfaction or waiver by 31 December 2024 (or such other date which is agreed) of various conditions precedent, which include the Company obtaining third‐party approvals.

Orbis is a manufacturer of laboratory jaw crushers, primarily used in the mining sector.
Since September 2021, when XRF acquired its initial 50% shareholding for $800,000, Orbis has grown significantly and continues to gain market share.
In FY21, Orbis produced unaudited revenue of $2.3m and profit before tax of $0.34m.
For FY24, Orbis has generated unaudited revenue of $5.8m and profit before tax of $1.7m.
Orbis is fully integrated into XRF’s operating structure, and the business will continue to be led by co‐founder and General Manager, Brad Hunting.

Key Acquisition Benefits
 Achieving 100% ownership of a low risk, bolt‐on acquisition with highly complementary products:the majority of XRF’s existing customers require jaw crushers
 Orbis has significant addressable markets covering a wide range of mined commodities.
Current sales are predominately to commercial labs, and XRF intends to further develop sales to mining companies for their on‐site labs
 Further diversification of revenue into the gold mining sector:
Orbis’s products are used in gold assaying processes such as fire assay and photon assay

Acquisition Price of Call Option Shares

 $3.91m for the 50% shares in Orbis.
The price is based on a 5x multiple of average FY23 and FY24EBIT of $1.57m, at a rate of 50%.
XRF may elect to pay up to 50% of the consideration in XRF shares, which will be calculated on a 10‐day Volume Weighted Average Price ending three business days prior to settlement and will be issued using XRF’s available placement capacity under ASXListing Rule 7.1. The cash consideration will be funded from XRF's cash reserves.
 The acquisition is subject to the conditions precedent mentioned above and provided all conditions are satisfied, the sale is expected to settle by 31 July 2024.

Earnout Payment An earn‐out will be payable, equivalent to 50% of the profits after tax for the 2025 financial year.

Up to 50% of the earn‐out can be paid in XRF shares (at XRF’s election), at the 10‐day Volume Weighted Average Price prior to issue of the shares.
The cash and/or shares should be paid by 31 October 2025.

FY24 Financials

XRF confirms that sales conditions during the June 2024 quarter were positive as expected.

The FY24 full‐year statutory accounts are scheduled for release on 20 August 2024.

Please direct any inquiries to:Vance Stazzonelli Managing Director vance.stazzonelli@xrfscientific.com +61 8 9244 0600

i hold XRF ( 'free-carried' )

XRF announces record full-year result

XRF Scientific Ltd (“XRF” or “The Company”) today announced its results for the June 2024 full-year:

Key Highlights
• Revenue up 9% to $60.1m from $55.3m
• Net Profit After Tax up 16% to $8.9m from $7.7m
• June Q4 Profit Before Tax of $3.3m and Sales Revenue of $16.2m
• June Q4 Profit Before Tax and Non-Controlling Interests (Orbis) of $3.9m
• Final fully franked dividend of 3.9 cents per share

References to profit above are net of profit attributable to non-controlling interests unless specified.
XRF’s Managing Director, Vance Stazzonelli, commented on the full-year result:
“During the year we saw strong levels of activity, which was mainly driven by the mining industry.International sales growth continued in key markets across Europe, Asia and the Americas.
The June 2024 quarter was a strong trading period with revenue of $16.2m and profit before tax of $3.3m.
Including 100% of Orbis, which we now fully own effective July 2024, profit before tax for the quarter was$3.9m.
The Consumables division had another strong year, generating a profit before tax of $5.7m from revenue of$18.8m.
The mining sector remained the key driver of activity, in which our products are consumed for sample testing processes across production and exploration.
Lithium chemicals are a key production input and began reducing in price during the year.

As a result, selling prices and production costs are affected,with profit per unit sold remaining steady.
We continue to see strong sales of consumable products into the first part of FY25.
The Precious Metals division delivered revenue of $21.5m and a profit before tax of $3.6m.
We experienced high levels of reoccurring orders from mining customers, as increased sample testing requires regular recycling of spent platinum labware products.
The Capital Equipment division delivered an increased profit before tax of $4.6m from revenue of $21.8m.
International sales gained momentum, particularly in the Americas and Asia, where significant sales have been achieved.
Included in the result, Orbis Mining generated revenue of $5.8m and total profit before tax of $1.7m (50% of PBT allocated to non-controlling interest).
We expect Orbis to continue to grow strongly in the years ahead, as it increases market share and expands the product range.
The Capital Equipment division has a number of new products under development, which are expected to release through FY25.”
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Dividend

The Board has declared a final fully franked dividend of 3.9 cents per share which is up by 18% on last year.

This represents a payout ratio of 61% of net profit after tax.
The dividend reinvestment plan (DRP) is available for shareholders by registering participation at the share registry, Automic Group.
A 2.5%discount will be applicable to the DRP.

Please direct any inquiries to:
Vance Stazzonelli
Managing Directorvance.stazzonelli@xrfscientific.com+61 8 9244 0600

i hold XRF ( 'free-carried' )

nice , but expect capex reductions from customers in the coming few years , i think easy exploration funding will dry up

XRF Scientific Ltd (“XRF” or “The Company”) provides an update on the September 2024 quarterly financial results (unaudited):

Quarter results for period ended 30 September September 2024 Quarter September 2023 Quarter Change%
Revenue $13.1m $13.6m (3%)
Profit Before Tax $3.2m $2.8m 15%

The September 2024 quarter was a positive period, with the Consumables and Precious Metals divisions being the main driver of results.
Revenue was down on the Previous Corresponding Period (PCP) due to reduced lithium prices and timing issues on machine sales.
Consumable sales were strong at $4.6m for the quarter compared to $4.4m in the PCP.
The main driver was sample analysis activity across mining production and exploration, which generated increased volumes of product sales.
Our selling prices reduced from falling lithium prices, with profit per unit sold remaining steady.
Sales to production mines have been increasing, as a result of new customer wins in Australia and internationally.
Sales of capital equipment products were $4.3m compared to $5.1m in the PCP. $0.8m sales of fully manufactured machines were delayed for invoicing until the December quarter, which impacted group profit before tax by ~$0.4m.
Demand for Orbis crushers remains strong, with most of the sales growth occurring internationally.
Orbis have captured a large share of the photon assay market, where our OM100smart systems are widely used for gold sample crushing and splitting.
The Capital Equipment division is currently developing a number of new machines, of which three are expected to be released during FY25.
Precious metals sales were $4.3m for the quarter compared to $4.0m in the PCP.
We experienced good levels of both new product and recycling sales from the mining and industrial markets.
Conditions in our Germany office have improved in the first quarter as expected.
We expect the December 2024 quarter to be positive for all divisions.
During this period our key focus areas are increasing Orbis crusher sales, new product developments, xrTGA sales and M&A opportunities.


Please direct any inquiries to:Vance Stazzonelli
Managing Director

vance.stazzonelli@xrfscientific.com +61 8 9244 0600

i hold XRF ( 'free-carried' )

further to the ASX announcement made on 22 November 2024, the acquisition of 100% of Labfit Pty Ltd has completed.

Labfit is a manufacturer of Carbon Sulphur Analysers, pH Analysers and laboratory weighing systems. Carbon Sulphur Analysers perform elemental analysis of Carbon and Sulphur in samples for mining andindustrial production applications. pH Analysers are used to determine how acidic, neutral or alkaline samples are. They can be used to test samples such as drinking water or soils for agriculture, for productivity, quality control or safety purposes..

The business is currently based in Bayswater, Western Australia, and post Completion will become fully integrated into our existing capital equipment factory in Balcatta, WA

Key Acquisition Benefits
- A low risk, bolt‐on acquisition with highly complementary products
- Labfit’s revenue and profits have the potential to grow strongly with the addition of XRF’s
distribution network, manufacturing capacity and technical resources
- Labfit has significant addressable markets and will expand XRF’s product portfolio into existing
markets such as gold mining, copper mining and cement manufacturing
- Further diversification of revenue into the water, beverage, environmental and agricultural sectors

Update on Upfront Consideration Paid
:: Total upfront consideration: $1,160,000
:: Cash component: $986,000 ... Funded from XRF’s cash reserves
:: XRF shares component: $174,000 .... 94,094 shares issued at (a 10‐day VWAP prior to settlement of) $1.8492.

MC of $260million:
..... three year chart ..

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Growth Strategy for 2025
- Ramp-up sales strategy on xrTGA
- Grow Orbis laboratory crusher sales
-Integration of Labfit into our sales network
- Continue with geographical expansion initiatives
- New product releases
- Continue to pursue M&A opportunities. Our targets are complementary manufacturing companies, in the laboratory supply or precious metals sectors