There doesn’t seem to be much current interest on SM regarding this company, which seems a little odd.

On the back of the FY25 results, I took a position in IMD, viewing it as a true “picks and shovels” of the entire mining sector, regardless of the commodity mined. IMD reported this morning, and through the day, the SP got a nice kick on of 2.6% on the result., and FWIW, from @Jimmy's report from Dow Newswires, Citi analyst William Park gave IMD a solid tick. Over the past year, the SP is up 31%.

For those not familiar with IMD, the company is in the drilling optimization, downhole intelligence, and AI-enabled geoscience interpretation technologies. To let their presentation do the talking:

I found what the slide above says of Exploration Budgets interesting, in terms of insight into the overall mining sector.

As for the actual financials, top line numbers are:

IMD have steadily grown over the years via strategic acquisitions, and so far, they seem to have integrated these into the ever-expanding business well. That said, there’s always risk when an originally small company is growing via multiple and frequent acquisitions - for example, they have recently completed the acquisition of Earth Science Analytics, have acquired Datarock, and just announced the acquisitions of Advanced Logic Technology and the associated Mount Sopris Instruments, and are finalizing the integration of previously acquired Krux Analytics. All the above acquisitions make good corporate and strategic sense, and the debt is still well-contained. In terms of capital allocation, I’m not sure anyone could fault them, but still, there’s a lot of M&A here. 

Seems to me that IMD has solid potential, but is not for the faint hearted.

Held IRL.

The CEO of Imdex has now made 3 separate purchases of Imdex at prices between $1.58-1.59. The recent low was $1.39. He now owns a total of 1,271,553 shares.

31/8-1/9 - bougth 100000 shares at $1.59

11-15/9 - bought 80000 shares at $1.58

23-27/10- bought 80000 shares at $1.59

Fairly positive sign that the Devico aquisition is being assimilated well and that he sees a positive turnaround happening in the drilling and sensors market.

Worth a listen for overview - The journey to being a leader in global Mining Tech: Paul House CEO of IMDEX - Euroz Hartleys Ltd | Livewire (livewiremarkets.com)

Interestingly also highlights the shortage in copper as well.

slight miss to consensus and the blastdog contract seems a bit light... im sure initially they were talking multiples of what the tools are on hire for and I think thats around $10k!? Long term I think its a good bet, would take advantage of weakness

Hi @mbry9625 - I don't follow $IMD, but from a quick look I think the reaction might be explained by:

1. Slight miss vs. consensus (NPAT of $44.7m vs. $48.6m (n=6, marketscreener.com); EPS of 11.3cps vs 11.9cps on FN Arena (n=2)
2. No forward guidance that I can see on the the presentation

These pullbacks on minor undershoot v. consensus are great buying opportunities for long term holders if you think its overdone.

Disc: I am not bullish on mining services and not following.

@ endean, good write up of the H1 report. I also think it was a good one and they are clearly progressing their strategy well. My valuation is pretty similiar to yours.

I'm curious why you think EPS in FY21 will be 13c but will drop back to 12.8c next year. I am thinking that H2 FY22 will be less than H1. From the outlook statement-

During 2H22 IMDEX anticipates some additional expenses due to the inflationary environment, together with

increased travel and marketing costs as mobility restrictions ease.

This make me think we will get less than 6.15eps in H2 FY22, and I will be happy with EPS of >12c (FY22), but would hope that FY 23 will be >13c as we start to get some of the earnings benefits from the recent Mineportal aquisition etc. and the Covid slowdowns will hopefully be less of a problem. Eitherway the outlook looks good for continued growth by Imdex

Cracking result from Imdex as they recover from the covid period. Some highlights....

Revenue $264.4m up 11.2% on 2020 (18% constant currency basis) 

EBITDA $75.5m up 38.8% on pcp 

EBITDA margin was 28.5% up on 22.5% in 2020 (2h 30%) - demonstrating strong operating leverage 

Strong net cash position of $47m

Div + special declared 

Organic growth evident as avg products per customer grew from 2.25 to 3.25, and sensors on rent up 35% from pre-covid peak. Some headway with the new tools - 3 new joint developments signed although this is still proving a much longer process than anticipated pre covid

Outlook strong with tool hire up 6% to date and continued focus on new production tools + solution selling. Supportive operating environment as global reserves continue to diminish.

Happy holder for the long term as they continue to demonstrate decent organic growth and we wait to see the impact of the new production tools on the bottom line.

@ Rhin20 - I am also a big fan of Imdex. Ticks a lot of boxes and I think management are excellent (although I would really like to see a higher level of ownership from them). I was also fortunate enough to take advantage of the sell down last year and will likely be a long term holder. 

The company is able to demonstrate organic revenue growth as their tool fleet transitions to the cloud (more expensive vs traditional fleet). Pricing has not changed so there is a lever they can pull here. Customer feedback is very good, and the product is exceptionally sticky - once the tools are imbedded in your workflow its very hard to transition to something else. They are also one of the only competitors to offer a full suite of products.

On top of all this, their "new tools" have yet to come to market and expect once covid has passed and testing can resume in a meaningful way these will add another chunk of earnings to the bottom line. A free option at this stage