Rock and roll: Why the Imdex (ASX:IMD) share price slid downhill today

Here's how the company performed over the 6 months ended 31 December.

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Key points

  • The Imdex share price slipped 2% lower today to close at $2.89
  • That's despite the release of its earnings for the first half of financial year 2022
  • Within its results, the company reported 35% more revenue, 55% higher EBITDA, and an 81% boost to its profits after tax than the prior comparable period

The share price of mining technology provider Imdex Limited (ASX: IMD) suffered today following the release of the company's results for the first half of financial year 2022.

As of Monday's close, the Imdex share price is $2.89, 2.36% lower than it was at the end of last week.

However, earlier in the day the company's stock reached $3.15, representing a 6.4% gain.

Imdex share price slips despite record revenue and profits

Over the course of the 6 months ended 31 December, the company saw its activity increase in all regions, particularly Australia and the Americas.  

Further, 35% more of the company's sensors were on hire during the half compared to the prior comparable period.

However, its pace of growth was hampered by labour restrictions and wider industry pressures.

Due to said pressures, the company increased its manufacturing capabilities and inventory levels to ensure it can continue supporting its clients.

Finally, IMDEX HUB-IQ's connected revenue increased by 46% last half.

The fully franked 1.5 cent interim dividend declared today represents a 24% payout ratio. It's also 50% more than the company handed out through its previous interim dividend.

What else happened during the first half?

Over the half just gone, Imdex acquired the MinePortal software from DataCloud International for around $20 million. It expects the acquisition will boost its growth within the mining production market.

It also acquired a 30% interest in Datarock Holdings for $5.5 million. The purchase will allow Imdex to offer image analysis software, artificial intelligence (AI) capabilities, and additional answer products.

The number of client sites trialling IMDEX BLAST DOG including integration with both IMDEX HUB-IQ and MinePortal software was expanded last half.

Imdex also released an IMDEX HUB-IQ software-as-a-service (SaaS) module for quality assurance survey data and next generation aiSIRIS software.

The company also released its first sustainability report.

What did management say?

Imdex CEO Paul House commented on the company's results for the first half, saying:

The combination of 35% revenue growth, 55% EBITDA growth, and 81% NPAT growth, is the strongest possible statement of the underlying quality of the Imdex business and the Imdex business model.

Our significant uplift in earnings reflected strong demand across all regions, particularly for our higher margin sensors and software.

What's next?

Those interested in the Imdex share price might be excited to learn the company's plan to grow in the future.

To achieve sustainable earnings growth, it will be growing its core business in resources-focussed exploration and development and expanding its technologies within the adjacent mining production market.

It will also be investing further into research and development and leveraging its capabilities in the mining production market.

Finally, it will be looking for more acquisition or collaboration opportunities to build on its geoscience analytics, AI, and computer visualisation capabilities.

It expects drivers of growth will include new innovations, discoveries, decarbonisation, and strong commodity prices.

Looking to the remainder of financial year 2022, Imdex expects additional expenses to come from the inflationary environment.

It also anticipates that COVID-19-induced challenges will remain in some form for another year or two. Though, it states it's in "its strongest position" to face the risks front on.

Imdex share price snapshot

The Imdex share price has slipped 0.6% year to date.

However, over the 6 months ended 31 December, it has gained 44%.

It is also currently 56% higher than it was this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Imdex Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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