Imdex (IMD) H2 2024 earnings summary

Executive summary

• Achieved record FY24 revenue of AUD 445.3 million, up 8% year-over-year, despite a 24% decline in global exploration drilling activity and budgets.

• Normalized EBITDA reached AUD 131 million, up 7%, with a stable margin of 29.4% despite increased R&D and digital investment.

• Devico integration completed ahead of schedule, exceeding synergy targets and contributing AUD 70 million in revenue, up 14% year-over-year.

• Strong operating cash conversion at 96% enabled accelerated debt repayment, reducing net debt by 46% to AUD 35 million and maintaining a robust balance sheet with net leverage at 0.3x.

• Expanded digital and integrated solutions, with 48% of top 250 customers using more than three products.

Financial highlights

• Group revenue increased 8% to AUD 445.3 million; normalized EBITDA up 7% to AUD 131 million, margin at 29.4%.

• Normalized NPAT-A at AUD 55.6 million, down 2% year-over-year; normalized EPSA down 16% to 10.9c.

• Net debt at AUD 35 million, reduced from AUD 64.9 million; cash conversion at 96%.

• Fully franked final dividend of AUD 0.013 per share, maintaining a 30% normalized NPAT payout ratio; full-year dividend of 2.8cps.

• Sensors and SaaS revenue grew to 64% of total revenue, up from 60% in FY23.

Outlook and guidance

• No further decline in market activity expected for 1H 2025; steady activity anticipated.

• Long-term fundamentals for exploration remain strong, with significant headroom for growth as exploration budgets are well below 2012 peak.

• Exploration budgets and capital raisings show early signs of recovery, especially in base metals.

• Growth expected from market share gains, margin expansion, and digital/IMT business units.

• S&P forecasts a 5% contraction in exploration spend for CY24, but a market upturn is expected as new funds are deployed.