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Integral Diagnostics Ltd (ASX:IDX) announces profit upgrade and new acquisitions

The Integral Diagnostics Ltd (ASX: IDX) share price was 2% up to $2.85 on Friday, following a market update from the company which specialises in medical imaging services, before falling back to $2.79 in today afternoon’s trade.

Integral Diagnostics confirmed its guidance for FY18. Normalised net profit after tax is expected to grow 20% from the $15 million reported in the previous year, with EBITDA in the range of $38 million to $39 million.

In February, the company rejected a $312 million scrip bid from rival Capitol Health Ltd (ASX: CAJ). Since then, the Integral Diagnostics share price has gained 30%, and now the current market capitalisation of the company amounts to $411 million.

Integral Diagnostics has transformed from being a takeover target to making acquisitions. A few days ago, the company announced the purchase of three radiology practices in Auckland for $98 million. Today it’s the turn of Victoria-based Geelong Medical Imaging, for $5 million.

The transactions had an expected FY19 EBITDA contribution of between $13 million and $14 million, and will increase the company’s presence in Australia and New Zealand to 53 radiology clinics, including 13 hospital sites.

Based on the company’s forecast, the stock trades at 22x FY18 earnings.

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Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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