XRF is a new IPO that I invested in. It listed on Tuesday with the 20c shares closing 21.5c. Today they put on 21% to close at 26c.

XRF is a manufacturer and distributor of scientific equipment servicing the mining industry. Some of the equipment they make includes Laser Spectrometers, Fusion machines and Analytical Fluxes. This equipment is used to analyse samples of minerals and chemicals etc

The IPO raised $4.6m after setting out to raise a minimum of $2m and maximum of $5m. There are 69m shares on issue with a further 7m to be issued soon in consideration for an acquisition set out in the prospectus. So there will soon be 76m shares on issue, giving a fully diluted market cap of $20m based on today’s closing price of 26c.

XRF is forecasting NPAT of $2.28m for FY07 and intend to pay a dividend. XRF is trading at around 8.7x its forecast earnings.

For those wanting more detail I suggest you read the prospectus.

I’ve also copied a couple of articles below that give a bit more explanation.

From today’s Australian:
XRF Scientific (XRF) 21c
OR why bother digging at all? The bourse's latest two newcomers are the latter-day equivalent of the 1880s goldfields shopkeeper or publican, in that they hope to get rich by providing equipment and services to the miners.

As a purveyor of high falutin' equipment such as laser plasma spectrometers, fusion machines and chemical fluxes, XRF offers miners more effective ways to analyse what's been extracted.
Every shipment of iron ore has to be accurately checked for ferrous content, or else the unhappy Chinese/Japanese buyers at the other end will reject the cargo.

There are various ways of doing this, but XRF claims to have the better mousetrap.

XRF's core gig is patented fusion machines, which sound like a 25th century energy source, but in fact convert mineral samples into glass discs at high temperatures. X-ray analysis then determines the purity of the sample.

XRF's backers took their time to find the dough, but managed to raise $4.56 million, higher than the minimum $2 million but shy of the maximum $5 million.

While there's plenty of work locally given the extent of mining expansion, XRF is eyeing offshore expansion. "We have big plans and the market will hear much more from XRF in the years ahead," promises chairman Paul Rengel.

XRF forecasts a profit of $2.28 million in 2006-07 on revenues of $12.6 million.

Criterion is easily blinded by science but rates XRF a solid BUY. The stock is trading on a PE of around seven times and directors are "committed" to paying a dividend next April.


Analyse this: XRF Scientific in $5m IPO
Andrew Trounson
September 13, 2006

LASER spectrometers and complex chemical solutions may have little in common with picks and shovels, but the global boom in minerals is also boosting demand for the analytical equipment that miners need to assess what they dig out of the ground.

Melbourne and Perth-based materials analysis group XRF Scientific is aiming to capitalise on rising commodity demand to accelerate its expansion into the Chinese, Indian and eastern Europe growth markets.

XRF Scientific, which manufactures analytical instruments and chemical solutions, yesterday launched an initial public offering to raise $5 million to fund its offshore expansion.

The strategy to develop new markets also includes the possibility of acquiring global competitors that are predominantly small family-owned businesses.

The patented fusion machines, which are not unique to XRF Scientific, convert mineral samples into glass discs at temperatures of over 1000 degrees Celsius. These discs, when subjected to X-ray analysis, provide a complete elemental breakdown.

The machines are manufactured in Victoria while the various chemical solutions that the samples must first be dissolved in are manufactured in Perth.

Also in Victoria, XRF manufactures laser spectrometers that produce bright sparks of light which can be beamed on to substances to analyse and give an elemental breakdown.

"There are