XRF Scientific builds FY27 growth platform as equipment sales, margins and cash flow strengthen

XRF Scientific has entered FY27 with a broader product suite, new international sales offices and a capital equipment division carrying considerably more momentum than it had a year ago.

The laboratory technology group delivered FY26 revenue of $64.4 million, up 8%, while adjusted profit before tax increased 10% to $16.1 million. Statutory net profit after tax edged 1% higher to $10.5 million after the company absorbed acquisition expenses and the costs of establishing new offices in India and the US.

The result was stronger beneath the statutory headline. Gross margin improved to 49.3% from 48.4%, operating cash flow rose to $11.4 million and the June quarter produced record adjusted profit before tax of $4.7 million on revenue of $17.2 million. The company declared a fully franked dividend of 4.5 cents per share.

Capital equipment becomes the growth engine

The standout performer was Capital Equipment, where revenue increased 17% to $26.3 million and profit before tax jumped 29% to $5.3 million. The division's profit margin improved to 20% from 18%.

Orbis laboratory crushers were a major contributor, with revenue rising 26% to $8.9 million. Demand came from Australia, the US and Canada, predominantly from gold sector customers.

The appeal of the Orbis range is reasonably easy to understand. The equipment can reduce 110 millimetre drill core samples to 2 millimetres in a single pass, automate sample splitting and reduce manual handling. In mining laboratories, where speed, consistency and operator safety all matter, those characteristics give the product a clear industrial use case.

The newer xrTGA thermogravimetric analyser is also beginning to gain traction. FY26 sales reached $1 million and, importantly, XRF Scientific recorded repeat sales from two large global companies. Management expects the product line to develop into a material contributor to Capital Equipment.

That makes FY27 less dependent on one product family. The company has also released next-generation xrFuse machines and says more than six additional machines are under development for release through FY27 and beyond.

CGA acquisition adds another leg

The acquisition of the CGA Elemental Analysis Instrument business from Bruker AXS SE in April is central to the next phase of growth.

XRF Scientific paid upfront consideration of US$4 million, with the acquisition funded entirely from cash. The transaction expanded inventories by around $1 million and intangible assets by $6.2 million, while adding a $1.4 million acquisition earnout liability.

The acquired technology measures carbon, sulphur, oxygen, nitrogen and hydrogen across applications ranging from iron, steel and nickel production to aerospace alloys, rare earth magnets, welding and additive manufacturing.

Manufacturing is being transferred to Perth, with revenue expected to commence in the second quarter of FY27. The company is also looking to sell related consumables into the existing CGA customer base and use newly acquired distributors to cross-sell other products, including xrTGA.

For investors, that combination is worth watching because instrument sales can potentially create follow-on demand for consumables and service, broadening the revenue opportunity beyond the initial machine purchase.

Consumables steady while precious metals lift profits

Not every division grew in FY26.

Consumables revenue fell 6% to $18.1 million and profit before tax declined 6% to $6.8 million. Even so, the margin remained a healthy 38%, and the second half improved substantially, delivering $3.8 million of profit before tax compared with $3 million in the first half.

Management pointed to strong international sales, particularly in Asia, while incoming orders were described as strong early in FY27.

Precious Metals had a stronger year, with revenue rising 14% to $24.6 million and profit before tax increasing 27% to $4.5 million. Margins expanded to 18% from 16%.

Higher precious metals prices supported recycling margins, although rising platinum prices also made some customers more cautious about new product purchases during the middle of the year. Demand subsequently improved as platinum prices eased.

Balance sheet still leaves room to move

Despite acquisition spending and dividends, XRF Scientific finished FY26 with $9.5 million in cash and a net cash position of $8.5 million.

Operating cash flow of $11.4 million exceeded statutory net profit, while investing cash outflow rose to $8.1 million, including $5.6 million associated with the CGA acquisition. The company also paid $5 million in cash for the FY25 dividend.

Inventories increased 12% to $21 million and intangible assets rose 38% to $23.9 million, largely reflecting the acquisition, while total equity increased 10% to $66.3 million.

The balance sheet therefore remains relatively lightly geared as management continues to pursue complementary laboratory product manufacturing and supply businesses.

FY27 shifts the focus from groundwork to execution

The FY27 strategy is built around integrating CGA, expanding Orbis and xrTGA sales, ramping up the new India and US offices, releasing new machines and continuing acquisition activity.

The ingredients for growth are more numerous than they were a year ago. The key question is whether those investments translate into sustained revenue growth without diluting the margins and cash conversion that have become important features of the business.

With Capital Equipment accelerating, international distribution expanding and several new products moving towards commercialisation, FY27 is shaping up as an execution year rather than simply another year of product development.