Integral Diagnostics share price on watch following FY 2020 earnings release

The Integral Diagnostics Ltd (ASX: IDX) share price is on watch this morning following the release of its full year financial results.

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The Integral Diagnostics Ltd (ASX: IDX) share price is on watch this morning following the release of its full year financial results.

Integral Diagnostics is an Australian healthcare services company that provides diagnostic imaging services to medical and healthcare staff and their patients. It operates under a range of brands including: Lake Imaging, South Coast Radiology, Global Diagnostics and Western District Radiology.

Another solid year of revenue and profitability growth

The group recorded statutory net profit after tax (NPAT) for the 12 months to June 30 2019 of $23.0 million. This was a 9.5% increase on FY 2019. Operating NPAT for Integral Diagnostics came in at $31.2 million, a strong increase of 21.9% on the prior year.

Meanwhile, operating revenue for the full year was $274.1 million, an increase of 18.7%.  This compared to annual revenue growth of 22.9% during FY 2019. This was a solid result considering the impact of COVID-19.

Operating EBITDA for FY 2020 for the group was $64.1 million for FY 2020, while the EBITDA margin came in at 23.3%. This was a slight increase on the EBITDA margin recorded in FY 2019 of 22.9%.

Market update on acquisitions

Integral Diagnostics completed the acquisition of Imaging Queensland on 1 November 2020. The group noted that the integration of Imaging Queensland has been more or less in line with expectations, considering the impacts of the coronavirus pandemic.

Another recent acquisition has been Ascot Radiology in New Zealand. This acquisition was announced back in early June and includes nine diagnostic imaging clinics. Integral Diagnostics anticipates that this acquisition will be completed by the beginning of September.

Net debt increased during FY 2020 increased by $5.4 million to $124.4.0 million. However, the group still ended the year in a reasonably solid balance sheet. Free cash flow was $56.6 million at the end of June. A capital raising occurred in September last year, successfully raising an additional $72 million in funds.

Integral Diagnostics chair Helen Kurincic said despite a COVID-19 punctuated year, FY20 was another solid performance for IDX shareholders, with statutory NPAT of $23m, 9.5% higher than PY.

"IDX achieved strong organic revenue growth prior to COVID-19 impacting from March, recovery commenced in May, with June revenues largely in line with pre-COVID-19 expectations," she said.

Dividend and market outlook

Integral Diagnostics declared a fully franked final dividend of 4.0 cents per share. This brought its full year dividend to 9.5 cents per share, compared to 10 cents in FY 2019.

Management priorities for FY 2021 include driving further organic growth, while further integrating prior acquisitions and striving to achieve higher efficiency gains. Integral Diagnostics will also ramp up the use of digital and artificial intelligence technology. In addition, Integral Diagnostics will continue to manage the impacts of the pandemic.

The Integral Diagnostics Ltd (ASX: IDX) share price closed yesterday at $3.92.

Motley Fool contributor Phil Harpur 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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