Integral Diagnostics (ASX:IDX) share price on ice after trio of big announcements

Here's the latest on the ASX diagnostics company amid its half-year results.

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Key points

  • Integral Diagnostics released its half-yearly results today
  • The company also followed up with an acquisition announcement and advised on an upcoming entitlement offer 
  • In the last 12 months, the Integral Diagnostics share price has collapsed more than 20%. 

Shares in Integral Diagnostics Ltd (ASX: IDX) are in limbo today after the company released its interim report and financial results for the half-year ended 31 December 2021 and, concurrently, put its shares in a trading halt.

The halt is pending a market sensitive announcement in connection with an acquisition and capital raising to be made via an entitlement offer.

Before the halt was in place, the Integral Diagnostics share price closed the day at $3.91.

Integral Diagnostics share price halt amid earnings results

Key takeouts from the company's earnings results today include:

  • Operating EBITDA of $39.5 million (21.9% margin) on operating revenue of $180.5 million
  • Operating diluted earnings per share (EPS) of 6.4 cents on operating net profit after tax (NPAT) of $13.0 million
  • Statutory NPAT of $10.2 million after customer contract amortisation, transaction and other costs of $2.8 million
  • Free cash flow of $24.8 million with net debt of $176.8 million
  • Interim dividend (fully-franked) of 4.0 cents per share payable on 4 April 2022
  • Announcement of acquisition of Peloton Radiology and an Entitlement Offer

What else happened this half for Integral Diagnostics?

The company recognised revenue growth of $7.4 million in Australia totalling around 5% and an 18% decrease of $3.9 million in New Zealand.

Integral was also busy building out its infrastructure and operating platforms during the half. It notes that $14.6 million was spent on capital expenditures (CapEx). Of that amount, $10.4 million was allocated to "growth initiatives including the development of three new sites".

Aside from that, operating NPAT was strong at $13 million and this carried through to statutory NPAT of $10 million and free cash flow of approximately $25 million.

These results allowed Integral's board to declare a fully-franked interim dividend of 4 cents a share, a small drop on last year. This equates to a 70% payout ratio that the company notes is in line with historical levels.

"The decrease in the interim dividend on the prior corresponding period reflects the impact of COVID-19 on the performance of the business during the 6 months to 31 December 2021", the company said.

In addition to these results, Integral advised it has agreed to acquire Peloton Radiology.

"Peloton Radiology is a scale provider of diagnostic imaging services with a strategic presence from Brisbane to the Sunshine Coast in the high growth corridor of South East Queensland," Integral said.

According to the announcement, Peleton has pro forma FY22 EBITDA of $8 million and was acquired on an implied acquisition multiple of 8.8x pro forma FY22 EBITDA.

The acquisition is expected to be completed in 2022 and will be financed via an entitlement offer that was announced to the ASX today.

Management commentary

Speaking on the results today, Managing Director and CEO of Integral Diagnostics Dr Ian Kadish said:

We are delighted to incorporate Peloton Radiology into Integral Diagnostics. The group's radiologists and staff represent a strong strategic and cultural fit with IDX's doctor led operating model. The Peloton Radiology group adds real value to IDX's market leading model and it significantly extends our presence in the Queensland market. We extend a warm welcome to the Peloton Radiology doctors and staff and look forward to partnering with them to further grow our combined business.

What's next for Integral Diagnostics?

Integral is bullish on the industry. It notes, "the underlying fundamentals of the radiology industry remain strong and the company is confident that patient volumes and historical growth patterns will over time return to pre-COVID-19 levels, and that continued investment in our workforce and infrastructure has positioned the Company well."

However, it also acknowledges that, while 2H FY22 performance to date "continues to be impacted by COVID-19, there are some early signs that patient volumes are returning, especially in our Queensland operations, albeit the impact of COVID-19 on 2HFY22 results remains uncertain."

Integral Diagnostics share price summary

In the last 12 months, the Integral Diagnostics share price has collapsed more than 20% and is down 21% this year to date.

During the past month of trading, the company's shares have slipped 8%, leaving Integral's performance trailing the broad indexes this year.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Integral Diagnostics Ltd. 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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