Integral Diagnostics (IDX) is an Australian healthcare services company whose main activity is providing diagnostic imaging services to general practitioners, medical specialists and allied health professionals (Referrers) and their patients. Integral’s FY23 revenue grew 22% to $441 million, in line with our forecast, while EBITDA was up 14% to $85 million. It was a tale of two halves for IDX, with Australian organic revenue growth accelerating to +10% in the second-half (+4% in the first-half). Its EBITDA margin recovered to 20.2% in the second-half from 18.5% in the first-half – a sign of positive operating leverage emerging.
. A stronger second-half, ongoing market share gains, accelerating indexation and moderating operating expenses has IDX well positioned in the new financial year. We lifted our FY24 EBITDA forecast slightly to $104m, reflecting 9% organic revenue growth in Australia and further margin improvements. We are positive on IDX’s risk-reward skew with a $3.35 price target.