Integral Diagnostics (IDX) H2 2024 earnings summary

Executive summary

• Revenue grew 6.6% to AUD 469.7 million, with operating EBITDA up 7.4% to AUD 91.5 million and operating NPAT up 1.3% to AUD 18.1 million year-over-year.

• Statutory net loss after tax of AUD 60.7 million, driven by a AUD 71.6 million impairment in New Zealand and non-operating costs.

• Declared a fully franked final dividend of 3.3 cents per share, with total FY24 dividends representing 74.4% of operating NPAT.

• Announced a transformational merger with Capitol Health, expected to close in Q4 2024, creating a leading ANZ diagnostic imaging group.

• FY24 saw a weak first half followed by a materially stronger second half, with Group EBITDA margins improving by 150bps to 20.3% in 2H FY24.

Financial highlights

• Operating EBITDA margin improved to 19.5% (up from 19.3%), with 2H FY24 margin at 20.3%.

• Free cash flow increased 5.5% to AUD 56 million, with conversion (excluding replacement capex) at 77.2%.

• Net debt reduced by AUD 11 million to AUD 183.5 million (2.6x EBITDA), with liquidity headroom of AUD 128.5 million.

• Operating diluted EPS rose 1.0% to 7.7 cents.

• Dividend payout ratio was 74.4% of FY24 operating NPAT.

Outlook and guidance

• FY25 capex (excluding Capitol) expected at AUD 40–45 million, with spend likely at the lower end due to project timing.

• Merger with Capitol Health anticipated to deliver over AUD 10 million in annual pre-tax cost synergies and double-digit pro forma FY25 EPS accretion.

• July saw mid-teens revenue growth, in line with Medicare, with similar trends expected in August after adjusting for working days.

• Focus areas for FY25 include organic earnings growth, digital and AI adoption, ESG strategy, and selective M&A.

• Fundamentals for the radiology industry remain strong, driven by demographic and technological trends.