I have been quite cautious on IMB since the acquisition of...

I have been quite cautious on IMB since the acquisition of ADT.
Obviously too cautious initially (cf my first post in July 23 when the stock was at 21 c).

I like their business which looks quite stable (cf large level of recurring revenue).
But there were 2 issues so far :
- they struggled to deliver on their promise to get a large free cash flow which would enable them to reduce the high level of debt (at a high cost) they took to buy ADT,
- unlike initial expectations, they continued to do more acquisitions, which made difficult to see if they were reaching their initial forecasts.
Another concern was that their main shareholder (Black Crane) has been reducing its position significantly by selling shares during their last capital increase (in Nov 24).

Obviously, the company has made significant progress via 2 elements in FY 25:
- major refinancing of their debt which has reduced the cost of their debt (Q4 financial charges were only 1.8 m$ vs 17 m$ for FY 25),
- the company has, at last, been able to show a large cash flow from operation for Q4 25 (and no more a CFO pre non-recurring items like the previous quarters).

There has been a clear improvement for their cash flow from operation (corrected from non recurring items) which went from 7.9 m$ during H1 25 to 6.7 m$ in Q3 25 and 14.7 m$ in Q4 25.
However, it remains difficult to estimate the level of recurring cash flow from operation.
Q4 25 cash flow from operation of 14.7 m$ looks high when we compare it to H2 25 EBITDA* (21.1 m$).
So, I wonder if there is some seasonality effect in this Q4 figure which makes it difficult to annualise it.

Like for every stock, I try to estimate a level of recurring free cash flow (using maintenance Capex) and before impact of working capital.
It remains difficult for the reason given above.

At this stage, it is probably easier to look at a range of free cash flow : 24 m$ to 28 m$ :
- the low end corresponds to EBITDA 25 (38.6 m$), after financial charges, Capex and leases,
- the high end corresponds to EBITDA 26e, including the impact of FY 25 acquisitions on a full year basis (2 m$+) and some organic growth (around 10 %, after 8 % in FY 25).
The company expects a "strong growth results in FY 26", but with no more details at this stage

So, the free cash flow yield can be estimated between 8.2 % and 9.7 % (using share price of 0.64 $).
Rather good level for a business which is expected to be quite stable.
However, we have also to take into account that this level of free cash flow is before tax, as the company considers to be "tax shielded for the next 3 to 5 years" thanks to tax losses of 23 m$.

* there was a significant increase for EBITDA in Q4 vs Q3 based on their past comment, as they said that they needed a large increase of EBITDA during Q4 25 to reach full year target.