VIDEO: Tim Knapton reviews mining tech IMDEX’s result
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Global mining equipment, technology and services provider Imdex has reported 24 per cent growth in full-year revenue to more than $218 million — and 35 per cent growth in EBITDA earnings to more than $42 million for fiscal 2018.
That translated into almost a six-fold increase in profit to just over $21 million.
The stock, however, fell 18 per cent to an intraday low of $1.015 on Monday — with more than $4.5 million shares changing hands. It recovered to $1.165 by the close, for a market cap of about $460 million.
Over the course of the year, Imdex enjoyed a 10 per cent increase in the total number of rentals across its Reflex range of drilling instruments.
The company has been reconfiguring its equipment to newer technologies which command higher charge-out rates due to the higher value-add for customers.
Last year its investment in technology and systems delivered significant efficiency improvements — as was reflected in an increase in EBITD earnings margin from 17.9 per cent to 19.4 per cent.
Imdex operates a truly global business — and revenue grew significantly across all three of its footprint areas, the Americas, Europe and Middle East and Asia Pacific.
The outlook is for continued strong revenue growth as global minerals exploration activity appears to be mid-cycle at only about half the 2012 peak.
The fastest growth region remains the Americas where Imdex, by strategic design, has the strongest presence.
The company’s fleet use rate is only just reaching 50 per cent and its earnings will be sensitive to further rises in that key metric.
There should be continued margin accretion from internal sources as last year more than $3 million was invested in a continuation of the company’s digital transformation program.
Astutely, the company has an option to acquire Flexidrill, an NZ player that owns new drilling technologies about which Imdex has been received strong interest from its client base.
CoreVIBE — which reduces drill-hole deviation, increases penetration rates and extends drill bit life — could improve drilling productivity by as much as 30 per cent.
MagHAMMER allows an entire drill hole to be completed by a single rig along with enhance drilling fluid circulation and faster drill case setting.
In the year ahead, Imdex will be investing $3 million to further commercialise both products, which integrate directly with elements of its own technology suite such as its gyrocompass, core removal tool and solids removal units.
The company also has a potentially very disruptive co-development project with Orica, the world’s biggest provider of commercial explosives and innovative blasting systems, which is using digital and automated technologies to create safer and more productive blast outcomes for clients.
It’s also investing in proprietary drill and blast technologies such as bore-hole stabilisers to reduce collar and hole collapsing and hence also drill misfires and the need for re-drilling.
Data from all these technologies will ultimately feed into IMDEX HUB-IQ, the company’s core technology platform.
It provides secure access to validated data which is seamlessly transmitted from a range of sub-surface instrumentation, from analytical instruments and from mobile data inputs.
HUB-IQ operates across downhole navigation, structural geology, in-field geo-analysis, drilling optimisation and driller operable geophysics.
It therefore provides a comprehensive and reliable live analysis of exploration or development activity delivered in dashboard formats to allow drilling contractors to make faster, safer and more effective decisions and hence boost their own productivity.
Critically, the Imdex balance sheet remains sound enough to drive further significant growth investment with a net cash position of about $8 million and a surplus of debtors over creditors of almost $23 million.
So the upshot is that Imdex is likely to remain at the global industry’s technological vanguard and continue to generate solid revenue growth, along with margin improvements from internal efficiency and product innovation.