Ann: Equity Raise - Institutional Component Result, page-3

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Monday, 23 January 2023

IMD - IMDEX LIMITED

Macquarie rates IMD as Outperform (1) - Imdex has announced the purchase of Devico for $324m, to be funded by a $120m senior secured loan and a $224m equity raising.

Macquarie advises the company will be 3% accretive in FY24 and 5% accretive in FY25, expecting $2m in recurring cost synergies, and the broker spies upside risk.

From a strategic perspective, the broker says the acquisition increases Imdex's global market (Devico is strong in Europe, where Imdex's position is less so) and strengthens Imdex's mining production position given more than 50% of Devico's revenues derive from resources companies.

EPS forecasts fall -1% in FY23; rise 8% in FY24; and 8% in FY25.

Outperform rating retained. Target price eases 5% to $2.70 to reflection increased debt.

Target price is $2.42 Current Price is $2.47 Difference: minus $0.05 (current price is over target). If IMD meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss). Current consensus price target is $2.54, suggesting upside of 2.8%(ex-dividends)The company's fiscal year ends in June.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 4.40 cents and EPS of 15.00 cents . At the last closing share price the estimated dividend yield is 1.78%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.47. How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.4, implying annual growth of 27.7%. Current consensus DPS estimate is 4.2, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 17.2.

Forecast for FY24:

Macquarie forecasts a full year FY24 dividend of 4.70 cents and EPS of 15.80 cents . At the last closing share price the estimated dividend yield is 1.90%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.63. How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.2, implying annual growth of 5.6%. Current consensus DPS estimate is 4.9, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 16.3.

Market Sentiment: 0.7All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources