Imaging services provider Integral Diagnostics Ltd (ASX: IDX) has delivered a profit result that is making the analysts sit up and take notice.
The company, which operates healthcare imaging centres across Australia and New Zealand, said in a statement to the ASX on Tuesday morning that it had grown its first-half revenue by 55.6% to $393.5 million, while operating EBITDA was up 75.6% to $81.1 million.
Net profit came in at $9 million compared with a $400,000 loss for the same period the previous year.
Managing Director Dr Ian Kadish said of the result:
The group delivered a strong first half result with solid revenue growth at improved margins. This resulted in enhanced returns to shareholders with operating diluted earnings per share up 66% and a fully franked interim dividend of 3.3 cents per share, up 32.0%. Consistent with previous expectations, the merger with Capitol Health is providing IDX with enhanced operational scale and a broader network, a stronger platform for clinical outcomes and growth, and the opportunity to drive further margin improvement over time as evidenced by the strong results for the first half. The integration of Capitol Health has proceeded to plan, with $14.0 million-plus of annual synergies realised, significantly exceeding initial expectations of at least $10. million.
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Shares looking cheap
Analysts at Jarden and RBC Capital Markets have had a look at the results, and like what they see.
The Jarden team said it was a "very strong" result with underlying net profit beating consensus estimates by 13%.
They said the recent sell-off of the company's shares had been on fears of rising labour costs, "which has a been a theme across healthcare service companies'', but at Integral Diagnostics labour costs were actually lower as a proportion of revenue, "reflecting workforce synergies, as well as increased use of tele-radiology''.
They said the company was also off to a good start in the second half with 7.8% revenue growth for January.
Jarden has a price target of $3.35 on Integral Diagnostics shares compared with $2.41 currently, up 0.63% for the day.
RBC Capital Markets has a price target of $3.50 on the shares and also said it was a positive result for the company.
They added:
While reported net profit after tax was a miss due to higher than expected transaction, restructuring and integration costs, we expect the market will like the 1H26 EBITDA margin of 20.6% which came ahead of guidance of 20%, as well as management retaining FY26 guidance for an EBITDA margin of about 21%. The stock has been weak leading into this result, therefore we expect the stock could experience a relief rally today on the earnings achieved in 1H26 and trading in Jan 26.
Integral Diagnostics will pay a 3.3-cent dividend on April 2 to shareholders on the books on March 5. The dividend is 32% higher than the same period last year.
The company was valued at $898.8 million at the close of trade on Monday.
