The announcement for the last big contract win read:
SYDNEY — 30 JULY 2019 — Australian medical imaging company IMEXHS Limited [ASX: IME] (“IMEXHS” or “the Company” is pleased to announce a new contract with RIMAB S.A.S. (RIMAB) to provide services to CAJA COLOMBIANA DE SUBSIDIO FAMILIAR COLSUBSIDIO (Colsubsidio). RIMAB is a Radiology services entity 100% owned by IME’s CEO, co-founder and Director Dr German Arango.
So the numbers were big @ approximately $3.9m pa for a 1 year term, and with 2 x 1 year extension options from memory. Adding a large $3.9m to IME's ARR.
I can only (maybe) put the muted SP response down to:
1. The term was only for a starting period of 1 year. Not sure why it was structured like this - as surely Dr Arango knows the IME product inside and out? This probably leads into my second point below.
2. Does the market feel that IME only received this large contract due to Dr Arango being the CEO of IME (and owning 100% of RIMAB)?
And therefore did Dr Arango only want to put in place a shorter term contract to show the market that IME would definitely need to perform well to keep this contract?
Probably grasping at straws here, but having been a long term holder of PME, this does feel like it should have re-rated a bit more after the RIMAB contract win announcement.
Have a great weekend everyone
IME Price at posting:
6.2¢ Sentiment: Buy Disclosure: Held
