LaserBond (ASX:LBL) reported a “strong” first half of FY2026, with management pointing to revenue growth, sharply higher profitability and continued progress commercializing its laser cladding technology. Executives also highlighted supply chain actions taken to manage tungsten volatility, an improving outlook supported by a stronger order book, and ongoing contributions from its 40%-owned Gateway Group investment in Western Australia.
H1 FY2026 financial results
Management said group revenue rose to AUD 23 million, up 13.4% from the prior corresponding period (PCP). CFO Peter outlined a lift in gross profit to AUD 12.4 million, up 22%, with a 54% group gross margin.
Peter noted profit before tax was slightly below the company’s H2 FY2025 result of AUD 3.7 million. He attributed the variance to normal December seasonality, plant equipment replacement downtime that the company “chose to absorb” in the half, and ongoing strategic investments in R&D.
Cash, balance sheet, and tungsten inventory build
Cash at the end of the period was AUD 4 million, down from AUD 5.6 million at the close of June 2025. Peter said the movement was largely driven by a deliberate AUD 1.8 million investment in tungsten carbide inventory to secure supply, citing geopolitical pressures and export dynamics affecting critical minerals, particularly from China. Operational cash flow was AUD 1.5 million.
The company described its balance sheet as strong. Total assets were AUD 62.9 million (flat on FY2025), while total liabilities fell 16% to AUD 20.3 million. Net assets rose 3.7% to AUD 42.6 million. Working capital increased 7.3% to AUD 16.2 million, which Peter attributed to improved collections and debtor management.
Segment performance: services, products, and technology
CEO Rob said the half was marked by three standout items: continued products momentum, margin expansion in services, and progress commercializing technology.
- Services: Revenue rose 10% on PCP to AUD 14.3 million. Gross margin expanded to 58.3% from 50.8%, which Rob attributed to cost controls, improved utilization across workshops, and more effective resource deployment. He acknowledged headwinds from weakness in the mining sector during the half, but said the company was positioned for an expected mining recovery as capex and replacement cycles normalize. Management also said machinery upgrades completed in H1 should lift productivity in H2.
- Products: Revenue increased 34% on PCP to AUD 8.4 million, matching what management described as the strong H2 FY2025 result. Rob said major customer orders and exports were significant contributors, supporting the company’s international growth ambitions. Gross margin was 47.1%, which management said was slightly lower due to tungsten price volatility linked to geopolitical challenges and Chinese export controls. The company said it is developing alternative formulations through R&D to reduce tungsten dependence. Rob also highlighted new oil and gas components “gaining traction” and described the products outlook as “very positive.”
- Technology: Rob emphasized commercialization progress, including the previously announced AUD 2.4 million licensing deal with Komatsu. He said LaserBond is building the system in its Smeaton Grange workshop and expects to deliver and commission it in H2, at which point it will be invoiced. He also said there is an ongoing licensing arrangement that includes technical support and updates, while noting certain commercial details were confidential. Management said other OEM deals were in advanced negotiation stages.
R&D focus and XClad development
Rob said research and development underpins the company’s competitive position and that investment increased during the half. He outlined three R&D priorities:
- Developing alternatives to tungsten carbide to reduce reliance on constrained supply chains
- Advancing projects in wind turbines and, to a lesser extent, agricultural applications
- Materials and process innovation to support products expansion into new domestic and offshore sectors
Rob also discussed XClad, described as a next-generation cladding technology designed for demanding environments and rotational wear applications. He said testing and customer trials were ongoing and that the company aimed to launch it toward the back end of the current financial year. In Q&A, Rob said XClad was not intended as a “race to the bottom” pricing move, but rather a way to be more competitive at the premium end while maintaining high performance characteristics and potentially opening markets migrating from legacy technologies.
Gateway Group contribution and outlook
LaserBond’s 40% equity stake in Gateway Group (held since March 2024) was described as performing well. Rob said Gateway revenue grew 24% on PCP to AUD 24.7 million, and LaserBond’s equity-accounted profit contribution was AUD 373,000 for the period. He cited new mining customers and supportive market conditions, including strong gold prices and improved commodities, as tailwinds.
Management said Gateway completed a transition to a larger facility in July and is building revenue through the expanded footprint, including use of LaserBond licensing technology already installed there. In Q&A, executives said Gateway operates at structurally lower margins than LaserBond, but that the laser cell should improve the mix over time.
On ownership, Rob said LaserBond has the right to increase to 51% in March or April 2027, and that discussions are beginning about longer-term aspirations, including potential options beyond 51%. He referenced a pre-agreed multiple of 4.5x EBITDA tied to options for either party, while emphasizing that no announcement was being made at this stage.
Looking ahead, Rob said the company entered H2 with a stronger order book and traditionally expects a stronger second half. He cited ongoing productivity initiatives, reduced downtime following equipment upgrades, supply chain measures to manage tungsten availability, continued export momentum in products, and the delivery of the Komatsu system as key supports for the remainder of FY2026.
About LaserBond (ASX:LBL)
LaserBond Limited, a surface engineering company, engages in the development and application of materials, technologies, and methodologies to enhance operating performance and wear life of capital-intensive machinery components in Australia. The company offers composite carbide steel mill rolls; and drilling tools comprising hammers and drill bits. It also provides laser cladding, welding, machining, heat treatment, metallurgy laboratory, surface coating, remanufacturing, and vacuum heat treatment services, as well as thermal spraying, hard facing, and polymer coating services.
