Imdex Limited

IMD Details

Full Year Result expected to be as per expectation: Imdex Limited (ASX: IMD) is a small-cap company with the market capitalization of $ 445.43 Mn as of July 26, 2018. It is a provider of integrated technology services to the mineral industry and offers various services such as drilling fluids, drilling equipment, advanced downhole instrumentation, data management solution and analytical software for geological modelling via its well-known brands i.e., AMC and REFLEX. On the financial front, the company recorded NPAT of $10.63 Mn for the half-year ended 31 December 2017. Revenue from ordinary activities were $104.79 Mn, up 27.89% from last year. Diluted EPS was 2.71 cents per share compared to (3.4) cps last year. Net operating cash flow was $2.1 Mn compared to $4.34 Mn last year. No dividends were proposed or paid during the period. The company’s EBITDA has grown at a CAGR of 15.8 per cent over the 1HFY14-1HFY18. Resultantly, the management expects that the second half EBITDA would be higher than the first half. We presumed that the group has a robust balance sheet with the ability to pursue its organic and transformational growth strategy within the mining value chain in the years to come. However, there are certain risks associated with the company like intense competition, seasonal issue and rise in wages which could impact the profitability of the company.


Rising EBITDA trend from 1HFY14 to 1HFY18 (Source: Company Reports)

Wilson Asset Management Group ceased to be the substantial holder of the Group since 08 June 2018. Moreover, IOOF Holdings Limited, a substantial holder of the group decreased its holding from 7.047% of interest to 5.980% of the voting power. Meanwhile, the stock was up by 70.92 per cent in the past one year and by 15.31 per cent in the past six months as at July 25, 2018. The stock price slipped by 0.415 per cent on 26 July 2018 owing to some volatility. We maintain a “Hold” recommendation on the stock at the current market price of $ 1.200 ahead of the full-year results which are expected to be announced on August 20, 2018.
 

IMD Daily Chart (Source: Thomson Reuters)

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