2024
Annual Report
FOR THE FULL YEAR
ENDED 30 JUNE 2024
Acknowledgement of Country
IDX acknowledges the Traditional Owners of Country
throughout Australia and their continuing connection to land,
sea, and community. We pay our respects to all Aboriginal
and Torres Strait Islander peoples, and to their Elders, past
and present.
patients first
PATIENTS ARE AT THE HEART
OF EVERYTHING WE DO
deliver the best health
outcomes for our patients
a healthier world
medical leadership
IMPROVING OUTCOMES WITH
EVIDENCE BASED CARE
everyone counts
WE WORK SAFELY, INCLUSIVELY
AND RESPECT EACH OTHER
create value
DELIVER SUSTAINABLE VALUE
TO ALL STAKEHOLDERS
embrace change
STRIVE FOR EXCELLENCE,
HAVE THE COURAGE TO INNOVATE
OUR
VISION
OUR
PURPOSE
OUR
VALUES
HEAD OFFICE Wurundjeri Country
Suite 9.02 Level 9, 45 William Street,
Melbourne, Victoria 3000
T +61 5339 0704
ABN 55 130 832 816
IMAGES: Lake Imaging - St. John of God Hospital Geelong
Overview
04
Our Brands
08
Group Locations and History
10
Chair’s Letter
12
Managing Director and Chief Executive Officer’s Letter
16
Directors’ Report
24
Operating and Financial Review
33
Remuneration Report
55
Auditor’s Independence Declaration
Financial Report
58
Consolidated Statement of Profit or Loss
59
Consolidated Statement of Comprehensive Income
60
Consolidated Statement of Financial Position
61
Consolidated Statement of Changes in Equity
62
Consolidated Statement of Cash Flows
63
Notes to the Consolidated Financial Statements
109 Consolidated Entity Disclosure Statement
111 Directors’ Declaration
112 Independent Auditor’s Report to the Members of
Integral Diagnostics Limited
117 Non-IFRS Financial Information
123 Shareholder Information
126 Corporate Directory
1,977
Employees
Put our Patients First
243
Radiologists
Report on our Examinations
1.0M+
Patients
Visited our Clinics
55K+
Referrers
Trusted Us
2.5M+
Examinations
Conducted by IDX Group
02
Overview
04
Our Brands
08
Group Locations and History
10
Chair’s Letter
12
Managing Director and Chief Executive Officer’s Letter
16
Directors’ Report
24
Operating and Financial Review
33
Remuneration Report
55
Auditor’s Independence Declaration
03
Integral Diagnostics
Annual Report 2024
Integral Diagnostics Limited (ASX: IDX) is an Australian and New Zealand healthcare services
company whose main activity is providing diagnostic imaging services to referrers (general
practitioners, medical specialists, and allied health professionals) and their patients.
Diagnostic imaging is the branch of medicine that uses a range of non-invasive imaging technology to create images of bones, tissues
and organs within the human body in order to diagnose and treat illness and injury.
Images can be produced using a variety of modalities including:
• Nuclear medicine, including Positron Emission Tomography (PET);
• Magnetic Resonance Imaging (MRI);
• Computed Tomography (CT);
• Mammography;
• Interventional Radiology (IR);
• Ultrasound (US); and
• Radiography (X-ray) & EOS.
The images produced by diagnostic imaging are a critical tool for referrers in reaching a diagnosis and deciding on the most effective
and efficient form of treatment for patients. In this way, appropriate use of diagnostic imaging can significantly enhance medical
outcomes for patients while at the same time reducing the overall cost of healthcare.
Group Overview
Core Markets
Australia and New Zealand
Sites
90
Comprehensive sites1
32
MRI machines5
36
Full MRI licences
17
Partial MRI licences
6
PET scanners
7
Employed radiologists2,3
155
Number of employees4
1,822
OUR BRANDS
04
Queensland
Imaging Queensland
Established in 2011 on the Sunshine Coast, Imaging Queensland has expanded
across South East Queensland and now provides diagnostic imaging services at
15 branches. The Imaging Queensland network comprises:
• Sunshine Coast Radiology
• Central Queensland Radiology
• IQ Radiology
Core Markets
Sunshine Coast, Rockhampton and Gladstone
Sites
15
Comprehensive sites1
5
MRI machines5
5
Full MRI licences
4
Partial MRI licences
1
PET scanners
-
Employed radiologists2
26
Number of employees4
311
X-Ray & Imaging (Peloton Radiology)
A local diagnostic imaging provider based on the Sunshine Coast.
X-Ray & Imaging (Peloton Radiology) provides services at 9 sites and the
network includes:
• CitiScan Radiology
• Lime Radiology and
• Diagnostic Imaging for Women
Core Markets
Brisbane and Sunshine Coast
Sites
9
Comprehensive sites1
3
MRI machines5
3
Full MRI licences
-
Partial MRI licences
3
PET scanners
-
Employed radiologists2
6
Number of employees4
166
South Coast Radiology
Since 1967, South Coast Radiology has provided radiology services on the Gold
Coast. It provides medical imaging services to the Tweed, Gold Coast, Darling
Downs and Mackay communities.
Core Markets
Gold Coast, Toowoomba and Mackay
Sites
17
Comprehensive sites1
8
MRI machines5
9
Full MRI licences
5
Partial MRI licences
2
PET scanners
2
Employed radiologists2
38
Number of employees4
449
05
Integral Diagnostics
Annual Report 2024
Western Australia
Apex Radiology
Established in 1996, Apex Radiology provides patients in rural and regional
communities in Western Australia, access to diagnostic imaging services.
Apex Radiology has recently opened in the Perth metro area and also
provides Radiology and Teleradiology services to the Western Australia Country
Health Service.
Core Markets
South West, Western Australia
Sites
6
Comprehensive sites1
3
MRI machines5
3
Full MRI licences
2
Partial MRI licences
-
PET scanners
1
Employed Radiologists2
10
Number of Employees4
205
Victoria
Lake Imaging
Lake Imaging has been offering radiology services to patients throughout
Geelong, Central and Western Victoria for over 20 years. It currently operates 18
clinics in locations including Ballarat, Geelong, Warrnambool, North Melbourne
and outer western areas of Melbourne.
Core Markets
Ballarat, Geelong, Warrnambool and outer western areas
of Melbourne
Sites
18
Comprehensive sites1
6
MRI machines5
8
Full MRI licences
4
Partial MRI licences
-
PET scanners
2
Employed radiologists2
38
Number of employees4
392
The X-ray Group
Since 2007, the X-ray Group has delivered diagnostic medical imaging
services to the local communities of Albury, Wodonga, Wangaratta, Yarrawonga
and Lavington.
Core Markets
Albury, Wodonga, Wangaratta, Yarrawonga and Lavington
Sites
5
Comprehensive sites1
2
MRI machines5
2
Full MRI licences
2
Partial MRI licences
-
PET scanners
-
Employed radiologists2
4
Number of employees4
74
OUR BRANDS
06
New Zealand
Astra, SRG and Horizon Radiology | Trinity MRI
IDX New Zealand brands located in Auckland provide patients with radiology
services, across all diagnostic imaging modalities; MRI, CT, PET CT ultrasound,
digital breast tomosynthesis and plain x-rays.
Trinity MRI is a diagnostics imaging facility dedicated to brain, spine and
neurovascular imaging.
Core Markets
Auckland
Sites
20
Comprehensive sites1
5
MRI machines5
6
Full MRI licences
N/A
Partial MRI licences
N/A
PET scanners
2
Employed radiologists3
33
Number of employees4
225
Teleradiology
IDXt
Launched in 2020, IDXt provides urgent, routine and overflow teleradiology
services across all modalities delivered by 80 contracted radiologists. IDXt
services the IDX Group, private radiology practices and public hospitals in
Western Australia, Queensland, Victoria and New South Wales.
These tables reflect data current at 30 June 2024.
1. Comprehensive sites comprise a range of radiology equipment including MRIs and CTs, and are located with or near major
specialist referrers.
2. Relates to employed radiologists only. In addition, IDX has had 88 contractor radiologists providing services.
3. Consistent with the NZ private radiology model, all doctors work across the public and private sector and meet the criteria to be
classified as contractors, but are on terms and conditions similar to IDX employed radiologists.
4. This number represents the number of employees on employment contracts on either part-time or full-time arrangements. It does
not represent the number of full-time equivalent employees or individual casual/contract arrangements. In addition there are 155
employees in the corporate office (including IDXt), totalling 1,977 employees.
5. Of the 30 MRI machines in Australia, 18 are located in MM1 areas, including 6 partially-licenced machines, and 13 are located in
MM2-MM7 areas.
07
Integral Diagnostics
Annual Report 2024
1967
The practice that would become South
Coast Radiology is established
2002
Lake Imaging established in Ballarat, VIC
2007
Darling Downs and Mackay Radiology
Sunshine Coast Radiology practices opened
2011
Lake Imaging acquired Western Medical
Imaging
2012
Lake Imaging acquired Ballarat MRI
2019
Acquired Imaging Queensland
2021
Acquired The X-Ray Group, NSW & VIC
2014
Lake Imaging merged with South Coast
Radiology in QLD and Integral Diagnostics
was formed
Acquired 60% of Global Diagnostics in WA
2018
Acquired Geelong Medical Imaging
Acquired Specialist Radiology Group,
Trinity MRI and Cavendish Radiology
in Auckland, NZ
2015
Acquired remainder of Global Diagnostics
in WA
Integral Diagnostics successfully listed on
the ASX
2020
Acquired Ascot Radiology, NZ
IDXt established - Specialist overflow and
after-hours teleradiology provider
Integral Diagnostics included in the
S&P/ASX 300 index
2022
Acquired Horizon Radiology, NZ
Acquired Peloton Radiology Group, QLD
GROUP LOCATIONS AND HISTORY
08
09
Integral Diagnostics
Annual Report 2024
Dear Fellow Shareholders
On behalf of the Board of Directors, I am pleased
to present our 2024 Annual Report.
In the financial year ended 30 June 2024, IDX continued to
pursue its vision of a healthier world by delivering the best
health outcomes for every patient we serve. We believe that the
diagnostic imaging services we provide dramatically improve the
diagnosis and treatment of illness and injury in the communities
in which we operate.
In FY24, IDX served over one million patients, performed over
2.5 million examinations and engaged with over 55,000 referrer
doctors. IDX achieved a patient NPS of +84 in Australia and
+86 in New Zealand in FY24, a pleasing result and one we will
continue to focus on improving.
The Company believes the fundamentals of the radiology
industry are strong. Our industry benefits from being at
the confluence of major global trends. Demographically, the
ageing of the population and the increased prevalence of
chronic disease and earlier detection will drive demand for
diagnostic services together with structural shifts to higher
acuity modalities. Technological advancements, digitisation and
the growth of teleradiology and Artificial Intelligence (AI) is
expected to improve the quality and efficiency of the care
we deliver.
Financial results
Like the broader economy, the health care sector has been
impacted by prolonged cost pressures, especially higher labour
costs, driven by inflation and labour market supply constraints,
together with higher interest funding costs.
It was in this challenging economic environment that we
announced an earnings downgrade on 3 November 2023, based
on our FY24 performance to that time. Although a board never
wants to do this, it had become clear that the operating
environment was not as strong as we or the market had hoped.
In response, IDX accelerated productivity and efficiency
initiatives, which enabled IDX to deliver solid FY24
financial results:
• Operating NPAT increased 1.3% to $18.1m and revenue
increased 6.6% to $469.7m;
• Operating EBITDA increased 7.4% to $91.5m while our
Operating EBITDA margin of 19.5% improved slightly by 20
basis points; and
• Free cash flow increased 5.5% to $56.0m and net debt
to EBITDA (pre-AASB16) was 2.6x, down 0.3x from 2.9x at
30 June 2023, continuing its downward trend towards our
target ratio of 2.5x or less over time.
IDX reported a statutory Loss after Tax of $60.7m for FY24,
driven largely by an impairment loss of $71.6m recognised in the
New Zealand division in 1H FY24. Since then, the New Zealand
business has performed well.
IDX declared fully franked dividends totalling 5.8cps for FY24
(6.0cps for FY23), representing 74.4% of FY24 Operating NPAT.
Transformative merger with Capitol Health
An important development for IDX has been the announcement
in July 2024 of our proposed merger with ASX-listed
Capitol Health Limited ("Capitol") (ASX: CAJ), which operates
65 radiology clinics throughout Victoria, Tasmania, Western
Australia and South Australia.
The proposed merger will create a leader in diagnostic imaging
across Australia and New Zealand, with materially larger scale,
an enhanced clinical offering and a greater ability to invest in
growth. The combined group will have 155 clinics, supported by
more than 350 radiologists and 3,000 employees, with combined
FY23 revenue (on a pro forma basis) of approximately $651m.
Most importantly for our patients, the combined group will have
deep clinical expertise across a wider network, promoting sub-
specialty reporting and peer review opportunities to ensure the
highest service quality.
The Company believes the fundamentals of the radiology
industry are strong. Our industry benefits from being at
the confluence of major global trends – demographic and
technological. It is an exciting time to be a leader in
this industry.
CHAIR’S LETTER
10
Under the proposed merger, IDX will acquire 100% of
Capitol’s issued shares via a scheme of arrangement. If the
proposed merger is implemented, IDX shareholders will own
approximately 63% of the combined group. Significantly, the
merger is expected to deliver double-digit pro forma EPS
accretion to IDX shareholders in FY25.1
Our Managing Director and CEO, Dr Ian Kadish, will lead the
combined group and two independent directors from Capitol will
join the IDX Board as non-executive directors.
The proposed merger is subject to Capitol shareholder approval
and other customary conditions and Capitol’s Board has
unanimously recommended that Capitol shareholders vote in
favour of the proposed merger.2
We currently expect the merger to be implemented towards
the end of this year and we look forward to the significant
opportunities this transformative merger will bring to all
our stakeholders.
Regulatory and technological opportunities
Looking ahead, recent regulatory changes present a good
opportunity for IDX. In May 2024, the Federal government
announced that from 1 July 2025, all partially licensed MRI
equipment will receive licensing that provides full Medicare
eligibility. IDX has 6 partially licensed MRIs that will benefit from
this change .
From 1 July 2027, all unlicensed MRI machines will be eligible
to access all Medicare funded MRI services, at which point
all MRI licensing requirements will cease. IDX currently has 7
unlicensed MRIs.
IDX is well placed to benefit from deregulation in the short to
medium term, and our experience from the de-regulation of MRI
services in regional and rural areas in 2022 will help us develop
our strategy when unlicensed MRIs gain full Medicare eligibility.
In the coming years, IDX sees an important role for AI in
transforming diagnostic imaging in healthcare. The benefits of AI
include enhanced image analysis for X-rays, MRIs, and CT scans,
operational efficiency, predictive and personalised healthcare,
and clinical decision support.
IDX was an early adopter of AI in 2019 in selected clinics and in
2020 in IDX’s teleradiology business IDXt. AI is now utilized in
most IDX business units and currently accounts for >5% of IDX
volumes and is growing. We believe our continuing investment
in AI will generate better health outcomes for our patients.
Sustainability
IDX’s environmental, social and governance strategy has
progressed over the past year. In FY24, the Board formed
a dedicated Risk, Compliance and Sustainability Committee
(RCSC), chaired by Ingrid Player, to increase focus on
sustainability related matters. IDX also has an Environmental,
Social and Governance (ESG) Committee, comprising executive,
senior management and operational team members who will
work together to develop IDX’s ESG approach. The ESG
Committee will have oversight from the RCSC and Board.
In FY24, IDX completed a roadmap for meeting Group
1 mandatory reporting under the Australian Sustainability
Reporting Standards. IDX also submitted its fourth Modern
Slavery Report and continued to work on waste improvment.
Our ESG report, to be released in September 2024, will report
the outcomes of our team's commitment to create a healthier
world in line with our vision, purposes and values and I
encourage all shareholders to read the report.
Governance
At last year’s AGM, Helen Kurincic retired as chair after leading
IDX since its IPO in 2015. Helen brought an array of skills and
experience to the Board and her commitment and leadership
over her tenure was a large reason for IDX’s sustained
growth during that period. I would like to thank Helen for her
exceptional service. I would also like to thank Dr Jacqueline
Milne, who retired from her role as an Executive Radiologist
Director on 5 August 2024 after five years on the Board.
Jacqui has been an incredible contributor to the Company and
its Board, balancing the interests of IDX and her colleagues
exceptionally well.
In the coming year, assuming IDX’s proposed merger with
Capitol is completed, our enlarged team of over 3,000
employees, led by Dr Ian Kadish, will be working hard to realise
the opportunities presented by this transformative merger and
the regulatory and technological changes before us, and we look
forward to improved shareholder returns in the future.
For this past financial year, I would like to thank my fellow
directors, Dr Ian Kadish, our executives and managers, and in
particular our radiologists and allied health practitioners, for
their commitment and efforts that deliver the best possible
outcomes for our patients. Finally, I would like to thank our
shareholders for their ongoing support of IDX.
Sincerely
Toby Hall
Chair
27 August 2024
1.
Analysis on a pro forma basis assuming the full impact of the proposed merger and anticipated annual pre-tax net cost synergies of at least $10 million for the full FY25 year.
2.
In the absence of a superior proposal and subject to an independent expert concluding (and continuing to conclude) that the proposed scheme is in the best interests of Capitol shareholders.
11
Integral Diagnostics
Annual Report 2024
Dear Fellow Shareholders
Your company served more than a million patients in the past
financial year, performed more than 2.5 million examinations,
and assisted more than 55,000 referring doctors to reach a
diagnosis. Our 1,977 employees, including doctors and staff,
delivered exemplary patient care at 90 clinics and hospital sites
in Australia and New Zealand, diagnosing disease early and
accurately, treating patients and saving lives.
The company was challenged in the first half of the financial
year with clinical skills shortages, particularly in regional areas,
and with high inflation and high interest rates. We embarked
on company-wide productivity and efficiency initiatives which
enabled us to deliver a stronger second half of the financial
year. We exit the financial year in a materially stronger position
than we entered, with growing revenues, increased margins and
earnings, a stronger balance sheet, and a proposed merger that
will be transformative.
IDX increased its revenue by 6.6% in FY24 to $469.7m and
increased operating EBITDA by 7.4% to $91.5m, with an
increased operating EBITDA margin of 19.5%, being 20 basis
points higher than for FY23. Importantly, we increased our free
cash flow by 5.5% to $56.0m and improved our gearing position
to a net debt to EBITDA ratio of 2.6x vs 2.9x at 30 June 2023.
Your company is well positioned to capitalise on the diagnostic
imaging platform we have built, to continue to drive revenue and
margins, to be the employer of choice for doctors and staff, and
to continue our growth trajectory through our transformational
proposed merger with Capitol Health Limited (‘Capitol’). The
diagnostic imaging industry continues to grow strongly in
Australia, New Zealand and around the world, and Integral
Diagnostics is positioned well to benefit from this growth, and
to sensibly drive growth, organically and inorganically.
Global industry trends
At IDX, we are fortunate to be working in an industry that plays
a critical role in health screening, prevention, diagnosis and
treatment. Global healthcare expenditure continues to increase
above inflation, driven by the ageing population, the prevalence
of chronic disease, and the introduction of new life-enhancing
interventions. Appropriate use of diagnostic imaging reduces
costs by diagnosing disease earlier, and thereby reduces the
need for more invasive and expensive hospital admissions and
surgical procedures.
Our industry also benefits materially from technology
advances, both in clinical technology like faster CT, higher
resolution MRI and digital PET scans, and information
and communications technology, particularly in teleradiology
and artificial intelligence. These technology advances are
more available and accessible to larger providers and their
importance has driven increased industry consolidation in the
major radiology markets around the world, including the US and
Europe, and more recently in Australia and New Zealand.
Teleradiology
IDX’s teleradiology division, IDXt, has been the fastest growing
practice within the IDX Group since its inception in August
2020. Today, IDXt is one of Australia and New Zealand’s three
largest teleradiology providers, providing services to internal as
well as external clients, including public and private radiology
practices, and major hospitals and regional health services.
IDXt employs around eighty RANZCR accredited radiologists
in Australia and New Zealand and in several other countries
around the world, so it is able to provide 24/7 radiology services
to hospital and regional clients in both countries.
Our teleradiology service provides radiologists with increased
opportunities to sub-specialise and focus on services where
they have a particular interest and expertise, thereby improving
patient care and efficiency, while reducing costs. Teleradiology
currently comprises about 15% of IDX’s revenues and we expect
the service to continue to grow materially in both quantum
and importance.
Artificial Intelligence (AI)
IDX was one of the first adopters of AI into our radiology
workflow in Western Australia in February 2019. We have
Building the ANZ leader in Diagnostic Imaging, and
the premier platform for radiologists, referrers and
patients, through best in class clinical service, quality
and outcomes.
MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER’S LETTER
12
continued to steadily increase the number of AI algorithms we
use, however the technology has not evolved as quickly as was
initially expected. We expect there will be a ‘tipping point’ within
the next few years, where AI will materially improve the quality,
scope and efficiency of radiology services that the industry can
provide. At that point, radiologists will be able to provide even
better insights for our referrers, diagnosing earlier and more
efficiently, and for a larger number of patients.
Regulatory Environment – Australia Medicare
Indexation and MRI Deregulation
Medicare announced indexation of 3.5% on all diagnostic imaging
services (excluding nuclear medicine) on 1 July 2024, coupled
with a reduction of 2% in CT benefits from 1 November 2024.
From 1 July 2025, the Australian Federal Government has
announced that all radiology clinics with an MRI licence (full
or partial) will receive full Medicare eligibility for all MRIs at that
clinic. Importantly, IDX will receive full Medicare eligibility for all
MRIs at each of our 20 clinics that currently hold an MRI licence,
including full eligibility at 6 clinics that currently hold a partial
licence. This is a valuable change, particularly for clinics with
a partial licence located close to major hospitals and specialist
groups. For example, our partial MRI licence at the Citiscan
clinic in the Brisbane CBD will be upgraded to a full licence on
1 July 2025, enabling that clinic to service the large number of
specialist referrers in Brisbane.
From 1 July 2027, all MRIs at comprehensive imaging clinics
in Australia will have an ability to bill Medicare. This change
will enable IDX to bill Medicare for MRI services at clinics like
the Prostate Centre in North Melbourne and Apex Radiology’s
O’Connor clinic in Perth, but the change will also bring additional
competition for Medicare patients from competitor MRIs that are
not currently licenced.
It is important to note that Australian patients are currently
under-serviced with MRI scans, receiving fewer MRI scans per
thousand population than patients in most other developed
economies, including New Zealand, the US, the UK, Canada
and most of Western Europe. The current Medicare licensing
regime in Australia is limiting patient access to an essential
medical service. We therefore support the Federal Government’s
considered, rational and sensible approach to phased MRI
deregulation over the next few years.
Regulatory environment – New Zealand
We have received limited indexation on pricing in New Zealand
from public payors and insurers, but were able to negotiate CPI-
like increases with the majority of the private health insurers.
The regulatory authorities in New Zealand have determined
that non-arms length referral practices by referrers who own
interests in radiology practices or equipment are acceptable.
IDX is broadening its referrer base in the New Zealand general
practitioner (GP) market, a market segment that is less impacted
by non-arms length referrals. Importantly, New Zealand GPs
are able to refer for a larger and growing number of MRI
studies than they have been able to refer for in the past. The
increasing ability for GPs to refer MRI is an important change
that is underway in many healthcare markets around the world,
including New Zealand, Australia and the UK. It is a valuable
trend that we actively use our influence to promote, as GPs
are important diagnosticians and gatekeepers, and MRI is an
increasingly important modality in determining the patient’s
clinical pathway.
Alleviating the medical skills shortage
The skills shortage of radiologists, referring doctors, and skilled
clinical staff remains the limiting constraint to industry growth.
An increase in immigration of these skilled professionals into
Australia and New Zealand since the end of the pandemic has
slowly begun to alleviate the shortage, but it has taken longer
than expected, particularly in regional areas where the skills
shortages are most acute.
IDX has worked hard, with the Australian Diagnostic Imaging
Association (ADIA) and with other national healthcare bodies,
to ensure that we attract and retain the doctors and staff the
regional areas require and achieved the following:
• We were successful in ensuring that Medicare continued to
recognise the ability for dual-trained radiologists and nuclear
medicine physicians to remotely supervise the provision
of regional and remote PET-CT services. Medicare had
temporarily authorised this service during the pandemic,
and ADIA were successful in lobbying for this change to be
made permanent after the pandemic, thereby ensuring the
continued provision of this much needed service in regional
areas; and
• Importantly for our regional referrers, on 1 November
2023 Medicare trebled the Bulk Billing incentive for GPs.
This change represents a meaningful uplift, particularly for
regional GPs who will receive the higher incentive.
Living our values
At IDX, our vision is to build a healthier world, and we do
this by delivering the best health outcome for every patient we
serve. We are defined by our five values – patients first, medical
leadership, everyone counts, create value, and embrace change.
We live these shared values at IDX, on the patient care frontline
and in all the support areas. We hire based on our values, we
promote and demote based on our values, and sometimes we
part ways based on our values.
Our values define us as healthcare professionals, caregivers
and support staff. These values differentiate our company, even
amongst our healthcare peers. Our values build our culture, our
commitment to always practice good medicine, and our patient
first ethos. We know that by putting our patients first, we will
also be putting our shareholders first.
13
Integral Diagnostics
Annual Report 2024
Growth and investment
Your company invested $9.3m in growth initiatives in FY24,
investing in two new greenfield sites, and in several brownfields
where we expanded the capacity and scope of services at some
of our busiest clinics.
We installed a new PET-CT in South Auckland in February. This
is our seventh PET-CT across the Group, our second one in
Auckland, and the first PET-CT in this fast-growing part of the
city. The capital costs for the equipment and infrastructure for
a PET-CT are high, but it has been our fastest growing modality
across the Group over the past 2 years. We have generally built
or acquired one new PET-CT facility every year.
We upgraded two PET-CT’s in Queensland and New Zealand,
materially improving their efficiency and throughput. We also
upgraded MRIs, CTs, ultrasound, mammography and digital x-ray
equipment across the Group.
We did not acquire any practices in FY24. We completed the
integration of the practices we acquired in FY23, and we
announced the offer to merge with Capitol in June 2024 after a
preliminary due diligence period, and prior to a confirmatory due
diligence period, culminating in the execution and announcement
of a Merger Implementation Deed on 18 July 2024.
Proposed merger with Capitol Health Limited
On 18 July 2024, IDX entered into a Merger Implementation Deed
with Capitol. The proposed merger will be transformative in that
it brings together Australia’s only listed pure-play diagnostic
imaging providers to create a stronger, better-capitalised
combined company.
The transformational proposed merger creates significant
clinical, strategic and financial benefits for the stakeholders of
both Groups, including patients, doctors and shareholders by:
• Providing patients with increased access to more clinics in
more locations as well as enhanced clinical expertise and
sub-specialist radiologist services;
• Providing doctors and staff with increased access to leading
technologies and modalities, with increased teleradiology
opportunities for workload-balancing and flexibility, and
more opportunities for professional development including
online learning and fellowship programs;
• Generating material cost savings, administrative and
revenue synergies, including productivity improvements
as well as access to national contracts, cross-referral
of specialist radiology services, and better staffing and
rostering opportunities. The cost synergies alone are
expected to generate annualised pre-tax net savings of at
least $10 million, with the majority of the synergies to be
realised in the first year after completion; and
• Providing one of the largest diagnostic imaging providers
in Australia and New Zealand with the capacity to influence,
drive and improve quality healthcare delivery more broadly
in both countries.
The transformational proposed merger will improve coverage
for both companies in Victoria and Western Australia. In addition,
it will provide IDX shareholders with exposure to important
radiology markets in Tasmania and South Australia, and provide
Capitol shareholders with exposure to high growth markets.
IDX will expose Capitol shareholders to the fast growing PET-
CT modality, and increase access to the growing specialist
referrer market. Capitol will provide IDX with exposure to one
of the country’s leading sports imaging facilities at Melbourne’s
Olympic Park, a leading musculoskeletal practice in Adelaide,
and a comprehensive network of complementary community
practices in Victoria, Western Australia and Tasmania.
Importantly, the actual clinic overlap of the two groups is limited.
In Victoria, Capitol’s clinics are concentrated in metropolitan
Melbourne and the Southeast, whereas the majority of IDX’s
clinics are in Ballarat, Geelong and the Western parts of the
State. Similarly, the IDX practice in Western Australia is largely
targeted to the hospital and public patient markets, whereas
the Capitol clinics in Western Australia cater predominantly to
private and community practices.
The proposed merger is subject to customary conditions and
approvals for a transaction of this nature, including court,
regulatory and Capitol shareholder approvals, as well as no
material adverse changes. We expect the merger will be
implemented in the fourth quarter of calendar year 2024, subject
to satisfaction of the conditions precedent to the merger.
Our people
Our people, the 1,977 individuals employed and contracted by
IDX, are the heart of our business. These are the dedicated
doctors and staff who work every day to provide the best
possible health outcomes to every patient we serve.
We undertake an employee ‘Temperature Check’ followed by
a Full Culture Survey every year at IDX. Pleasingly, the IDX
employee NPS continued to improve in FY24 despite challenging
circumstances. This improved employee NPS was particularly
pleasing given the extensive productivity and efficiency drive we
undertook at the end of calendar year 2023 and into early 2024.
Importantly, patient and referrer NPS scores also improved
in FY24.
FY25 priorities
The Company’s focus in FY25 and beyond will be to continue to
execute the following key drivers of IDX’s growth strategy:
• Drive organic earnings growth, including through
continued focus on execution of key operational
improvement initiatives;
• Accelerate use of teleradiology, digital and AI to improve
the patient and referrer experience and doctor efficiency,
with IDX's teleradiology business (IDXt) having grown rapidly
organically, now including 88 contracted radiologists and
reporting ~15% of IDX Australian revenue;
MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER’S LETTER
14
• Drive our environmental, social and governance
(ESG) strategy;
• Lead through our Values; and
• As balance sheet capacity permits, consider accretive
mergers and acquisitions that represent a strong clinical,
cultural and strategic fit.
IDX expects to implement the transformational proposed merger
with Capitol in the fourth quarter of calendar year 2024,
subject to satisfaction of the conditions precedent to the
merger. The combination of our two highly complementary
diagnostic imaging businesses is expected to realise significant
and enduring benefits for our combined patients, doctors
and shareholders.
Going forward
I am excited about the prospects for the larger IDX Group
going forward. Your company is ideally positioned to capitalise
on the strong industry fundamentals, favourable regulatory
changes and improving economic fundamentals in Australia and
New Zealand.
In closing, I’ll ask my fellow shareholders to join me in thanking,
once again, our frontline healthcare heroes at IDX who continue
to put our patients first every day. Our doctors and staff include
some the finest healthcare professionals in the world. Their
professionalism, dedication and commitment to our patients and
referrers remains inspiring.
My thanks also to all our patients who put their trust in us, to
our loyal referrers who trust their patients to us, and to you, our
shareholders, who put your faith in us.
My sincere thanks to our Chair, Board and management team,
for their valuable counsel, insight, commitment and support.
Good medicine is still good business.
Sincerely
Dr Ian Kadish
Managing Director and Chief
Executive Officer
27 August 2024
15
Integral Diagnostics
Annual Report 2024
The Directors present their Report, together with the financial statements, on the consolidated entity the ("Group") consisting of Integral
Diagnostics Limited ("IDX" or the "Company") and the entities it controlled for the year ended 30 June 2024.
The information referred to below forms part of, and is to be read in conjunction with, this Directors’ Report:
• the Operating and Financial Review (OFR) commencing on page 24; and
• the Remuneration Report commencing on page 33.
Directors
The following persons were Directors of the Company during the whole of the financial year and up to the date of this Report, unless
otherwise stated:
Toby Hall (Independent Non-Executive Chair) appointed as a Director 28 September 2023 and Chair 29 November 2023
Dr Ian Kadish (Managing Director and Chief Executive Officer)
Raelene Murphy (Independent Non-Executive Director)
Andrew Fay (Independent Non-Executive Director)
Ingrid Player (Independent Non-Executive Director) appointed 29 August 2023
Dr Jacqueline Milne (Radiologist Executive Director) resigned 5 August 2024
Helen Kurincic (Independent Non-Executive Chair) resigned 29 November 2023
John Atkin (Independent Non-Executive Director) resigned 31 August 2023
Dr Nazar Bokani (Radiologist Executive Director) resigned 9 August 2023
Principal activities
During the financial year, the principal activity of the Group was the provision of diagnostic imaging services.
Business strategies, prospects and likely developments
The OFR, which commences on page 24 of the Annual Report, sets out information on the business strategies, prospects and likely
developments for future financial years. The expected results from those operations in future financial years have not been included
because they depend on factors such as general economic conditions, the risks outlined and the success of IDX's strategies, some of
which are outside the control of the Group.
Review and results of operations
A review of the operations of the Group during the financial year, the results of those operations and the financial position of the Group
are contained in the OFR, which commences on page 24 of the Annual Report.
Dividends paid in the year ended 30 June 2024
Dividends paid/payable during the financial year were as follows:
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Dividend paid 3.0 cents per share on 5 October 2022
-
6,885
Dividend paid 2.5 cents per share on 4 April 2023
-
5,755
Dividend paid 3.5 cents per share on 4 October 2023
8,060
-
Dividend paid 2.5 cents per share on 2 April 2024
5,762
-
13,822
12,640
DIRECTORS’ REPORT
For the year ended 30 June 2024
16
Significant changes in the state of affairs
There were no significant changes to the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
Resignation of Director
On 5 August 2024, the Company announced the resignation of Dr Jacqueline Milne from the Board of Directors, effective 5 August 2024.
Proposed acquisition of Capitol Health Limited
On 18 July 2024, the Group announced that following the completion of a two-way confirmatory due diligence process, an agreement
had been reached to enter into a binding Merger Implementation Deed to acquire 100% of Capitol Health Limited's ("Capitol") issued
shares via a scheme of arrangement.
The Merger Implementation Deed outlines the terms and conditions on which both parties can now proceed to implement the merger
via a scheme of arrangement, consistent with the terms of the merger process deed entered into by both parties as announced on
17 June 2024. Under the proposed scheme, shareholders in Capitol would receive 0.12849 shares in IDX per Capitol share.
Capitol’s Board have unanimously recommended that Capitol shareholders vote in favour of the scheme, in the absence of a superior
proposal and subject to an independent expert concluding (and continuing to conclude) that the scheme is in the best interests of
Capitol shareholders. Subject to these qualifications, each Capitol Director has confirmed they intend to vote any shares that they hold
or control in favour of the scheme. The scheme is subject to customary conditions and approvals for a transaction of this nature,
including court, regulatory and Capitol shareholder approvals, as well as no material adverse changes or prescribed occurrences.
Results of the performance conditions for the Long Term Incentive (LTI) awards
The performance condition relating to the performance rights issued as part of the FY21 Long Term Incentive (LTI) awards was tested
on 27 August 2024. The performance required for vesting was not met, and as a result 373,374 performance rights lapsed.
Dividend declaration
Subsequent to year end, a dividend of 3.3 cents per share was declared and will be paid on 3 October 2024.
Other matters or circumstances
Other than those detailed above, no other matters or circumstances have arisen since 30 June 2024 that have significantly affected, or
may significantly affect the Group’s operations, the results of those operations, or the Group’s state of affairs in future financial years.
Environmental regulations
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law. During the financial
year the Group was not convicted of any breach of environmental regulations.
Details of our Environment, Social and Governance (ESG) activities will be published in our FY24 ESG Report prior to our Annual
General Meeting and will be available on the Company's website at https://integraldiagnostics.com.au/reports/.
17
Integral Diagnostics
Annual Report 2024
Information on Directors
Toby Hall
Independent Non-Executive Chair
MBA, GAICD, CGMA
Mr Toby Hall was appointed as an independent Non-Executive Director of IDX on
28 September 2023 and became Chair on 29 November 2023.
Toby has deep healthcare executive leadership experience in Australia and New Zealand and
is an experienced Board and Committee Chair. From 2014-2022, Toby was the Group CEO of
St Vincent’s Health Australia, the second largest non-government provider of hospital and
care services in the country. He has also overseen multisite, for-profit generating businesses
at both board and executive levels in employment services, early learning services and
aged care.
Toby also has extensive involvement in policy development at a Federal level in Australia,
having served on committees established by Prime Ministers, Deputy Prime Ministers,
Health Ministers, Employment and Social Services Ministers.
He is currently Chair of Sana Health Group, Non-Executive Chair of For Purpose Aged Care,
Non-Executive Director of UNICEF Australia, a Director of Papua New Guinea Sustainable
Development Fund, a trustee of Yajilarra (a philanthropic foundation) and advisory board
member for Fujitsu Australia and New Zealand.
Former directorships (in
the last three years)
None
Special responsibilities
Chair of the Nomination Committee
Member of the Audit Committee
Member of the Risk, Compliance and Sustainability Committee
Member of the People, Culture and Remuneration Committee
Interests in shares
151,719 ordinary shares (indirectly)
Dr Ian Kadish
Managing Director and Chief
Executive Officer MBBCh, MBA
Dr Ian Kadish was appointed Managing Director and Chief Executive Officer of IDX on
22 May 2017.
Ian began his career as a medical doctor in Johannesburg, South Africa. He subsequently
completed an MBA at the Wharton Business School at the University of Pennsylvania
(Dean’s List) and followed this with several roles overseas including McKinsey and Company,
CSC Healthcare in New York City, and Netcare, a major hospital group in South Africa
and the United Kingdom, where he was an Executive Director from 1997 to 2006. Ian
was instrumental in growing the group from five hospitals with a market capitalisation of
$60 million, to 119 hospitals and a market capitalisation of $3 billion.
Since migrating to Australia in 2006, Ian’s roles have included CEO and MD of Healthcare
Australia, CEO and MD of Pulse Health Group (previously ASX-listed hospital group) and CEO
of Laverty Pathology.
Ian is currently a Non-Executive Director of Teaminvest Private Group Limited (ASX: TIP) and
a Director of the Australian Diagnostic Imaging Association (ADIA).
Former directorships (in
the last three years)
None
Special responsibilities
Member of the Integral Clinical Leadership Committee
Interests in shares
559,441 ordinary shares and 858,583 performance rights
(directly)
DIRECTORS’ REPORT
For the year ended 30 June 2024
18
Raelene Murphy
Independent Non-Executive
Director BBus, FCA, GAICD
Ms Raelene Murphy was appointed as an independent Non-Executive Director of IDX on
1 October 2017.
Beginning her career in audit, Raelene has over 30 years' experience in strategic, financial
and operational leadership in both industry and professional advisory. She was formerly a
Partner in a national accounting firm, Managing Director of Korda Mentha and CEO of the
Delta Group. In her professional advisory career, she specialised in operational and financial
restructuring, with a particular emphasis on merger and acquisition integration across a
range of significant public and private companies.
Raelene is a Fellow of Chartered Accountants Australia and New Zealand and has extensive
experience as Chair of Audit and Risk Committees for ASX listed companies.
She is currently a Non-Executive Director of Bega Limited (ASX: BGA), Elders Limited (ASX:
ELD) and Tabcorp Holdings Limited (ASX: TAH).
Former directorships (in
the last three years)
Altium Limited (ASX:ALU) – Non-Executive Director - (2016
to 2022)
Special responsibilities
Chair of the Audit Committee
Member of the Risk, Compliance and Sustainability Committee
Member of the People, Culture and Remuneration Committee
Member of the Nomination Committee
Interests in shares
30,945 ordinary shares (indirectly)
Andrew Fay
Independent Non-Executive
Director BAgEc (Hons), A Fin
Mr Andrew Fay was appointed as an independent Non-Executive Director of IDX on
18 July 2022.
Andrew brings to the Board over 30 years’ experience in funds and investment management,
including Chief Executive Officer and Chief Investment Officer roles at Deutsche Asset
Management (Australia) Limited. He also held a number of other senior investment roles
at Deutsche Asset Management and previously at AMP Capital. From 1998 to 2006, he was a
member of the Investment Board Committee of the Financial Services Council.
Andrew is an experienced company director across ASX listed, private and regulated
entities and accordingly brings to the Board skills in financial and risk management,
capital markets, executive remuneration frameworks, strategy, investment and corporate
governance. Specifically, he has sector experience and expertise in financial services,
including investment, funds, property and infrastructure management.
He is currently Chair of Growthpoint Properties Australia (ASX: GOZ), a Non-Executive
Director of National Cardiac Pty Ltd and Utilities of Australia Pty Ltd (Trustee of Utilities
Trust of Australia) and advises Microbiogen Pty Ltd in the area of corporate development.
Former directorships (in
the last three years)
None
Special responsibilities
Chair of the People, Culture and Remuneration Committee
Member of the Audit Committee
Member of the Nomination Committee
Interests in shares
23,000 ordinary shares (directly) and 62,000 ordinary shares
(indirectly)
19
Integral Diagnostics
Annual Report 2024
Ingrid Player
Independent Non-Executive
Director BEc, LLB(Hons), GAICD
Ms Ingrid Player was appointed as an independent Non-Executive Director of IDX on
29 August 2023.
Ingrid is an experienced former executive and non-executive director with international
commercial and regulatory experience in mergers and acquisitions, corporate governance,
capital developments, risk and sustainability that spans different markets and industries in
Australia and Europe.
Ingrid’s experience includes her senior executive roles with one of Australia’s leading
healthcare providers, where she worked closely with the Board to deliver various capital
raisings, retail listed notes, and debt finance deals. She was also instrumental in leading
the integration of more than 50 businesses into the Group, implementing the Group’s first
Reconciliation Action Plan and establishing diversity targets throughout the organisation.
Ingrid’s roles included Group Executive for Legal Governance and Sustainability as well as
General Counsel and Company Secretary between 2005 and 2019.
She is currently a Non-Executive Director of Cleanaway Waste Management Limited
(ASX: CWY) and Cogstate Limited (ASX: CGS) and is also a Non-Executive Director of
Epworth Foundation.
Former directorships (in
the last three years)
None
Special responsibilities
Chair of the Risk, Compliance and Sustainability Committee
Member of the Audit Committee
Member of the People, Culture and Remuneration Committee
Interests in shares
35,000 ordinary shares (indirectly)
Other current directorships quoted above are current directorships for listed entities only and exclude directorships of all other types
of entities, unless otherwise stated.
Former directorships (last three years) quoted above are directorships held in the last three years for listed entities only, and exclude
directorships of all other types of entities, unless otherwise stated.
Company Secretaries
Ms Nikki Dalla Valle (LLB, B.Int.St) was appointed General Counsel and Company Secretary on 14 December 2023. Nikki is an
experienced corporate lawyer holding various in-house roles in the FMCG and Healthcare industry specialising in mergers and
acquisitions and general corporate and commercial work. Nikki is currently on parental leave.
Mr John Merity (BA, LLB (Hons), GAICD) was appointed as Interim Company Secretary on 6 June 2024. John draws on a broad range
of experience gained as a corporate lawyer in Australia and the UK, as a director and company secretary of ASX-listed and substantive
private companies and as a corporate advisor.
DIRECTORS’ REPORT
For the year ended 30 June 2024
20
Meetings of Directors
The numbers of meetings of the IDX Board of Directors and of each board committee held during the year ended 30 June 2024, and the
numbers of meetings attended by each Director were:
Board
Audit, Risk and
Compliance
Committee1
Audit
Committee1
Risk,
Compliance and
Sustainability
Committee1
People, Culture
and
Remuneration
Committee
Nomination
Committee
Director
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Toby Hall
15
15
2
2
1
1
2
2
3
3
3
3
Dr Ian Kadish
18
18
-
-
-
-
-
-
-
-
-
-
Raelene Murphy
18
18
4
4
1
1
2
2
5
5
3
3
Andrew Fay
18
18
4
4
1
1
5
5
3
3
Ingrid Player
16
16
2
2
1
1
2
2
3
3
-
-
Jacqueline Milne
18
18
-
-
-
-
-
-
-
-
-
-
Helen Kurincic
7
7
2
2
-
-
-
-
2
2
1
1
John Atkin
2
2
2
2
-
-
-
-
2
1
-
-
Nazar Bokani
1
1
-
-
-
-
-
-
-
-
-
-
1. The Audit, Risk & Compliance Committee was retired on 3 April 2024 and the Audit Committee and Risk, Compliance and Sustainability Committee were respectively established on 3 April 2024.
Held: Represents the number of meetings held during the time a Director held office and was eligible to attend.
The Board also has a group-wide Clinical Leadership Committee (ICLC). Its role is to promote and support a collegiate culture across
all practices and to provide advice on all clinical governance matters including patient care, clinical standards and quality assurance.
During the year ended 30 June 2024, the ICLC consisted of Executive Directors Dr Ian Kadish, Dr Nazar Bokani and Dr Jacqueline Milne,
together with radiologist leaders from across IDX. Dr Bokani was a member of this Committee up until his resignation on 9 August
2023 and Dr Jacqueline Milne was a member of this Committee until her resignation on 5 August 2024.
The Clinical Leadership Committee met five times during the year ended 30 June 2024 and Executive Directors’ attendance is
noted below:
ICLC
Director
Held
Attended
Dr Ian Kadish
3
3
Dr Jacqueline Milne
5
5
Dr Nazar Bokani
-
-
Held: Represents the number of meetings held during the time a Director held office and was eligible to attend.
Options and performance rights
As at the date of this report, IDX had 1,721,459 performance rights outstanding relating to the LTI Plan (2023: 1,337,523), and 150,427
performance rights outstanding relating to the STI Plan (2023: nil). For further details on the performance rights, refer to Note 24 in the
Notes to the Financial Statements.
As at the date of this report, IDX had 907,990 options outstanding (2023: 923,342). For further details on the options, refer to Note 24 in
the Notes to the Financial Statements.
21
Integral Diagnostics
Annual Report 2024
Indemnity and insurance of officers
The Company’s Constitution requires the Company to indemnify any person who is, or has been, an officer of the Company, including
the Directors, Executives and the Company Secretary of the Company, on a full indemnity basis and to the full extent permitted by law,
against all losses or liabilities (including all reasonable legal costs) incurred by the officer as an officer of the Company or of a related
body corporate.
In accordance with the Company’s Constitution, the Company has entered into a deed of indemnity, insurance and access with each
of the Company’s Directors and officers. Under the deeds of indemnity, insurance and access, the Company must maintain a directors’
and officers’ insurance policy insuring a Director (among others) against liability as a director and officer of the Company and its
related bodies corporate, until seven years after a director ceases to hold office as a director or of a related body corporate (or the date
any relevant proceedings commenced during the seven-year period have been finally resolved). No Director or officer of the Company
has received benefits under an indemnity from the Company during or since the end of the financial year.
During the financial year, the Company has paid a premium in respect of a contract, insuring officers of the Company or of a related
body corporate and its related bodies corporate against all liabilities that they may incur as an officer of the Company or of a related
body corporate, including liability for costs and expenses incurred by them in defending civil or criminal proceedings involving them as
such officers, with some exceptions. Due to confidentiality obligations and undertakings of the policy, no further details in respect of the
premium or the policy can be disclosed.
Indemnity and insurance of the auditor
The Company has agreed to indemnify the auditor, PricewaterhouseCoopers, to the extent permitted by law, against any claim by a
third party arising from the Company's breach of their agreement. The indemnity stipulates that the Company will meet the full amount
of any such liabilities including a reasonable amount of legal costs. No liability has arisen or premium paid under this indemnity.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any
related entity.
Proceedings on behalf of the Company
No person has applied to the court under section 237 of the Corporations Act 2001 (Cth) (Corporations Act) for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
Audit and non-audit services
Details of the amounts paid or payable to the auditor of the Company for audit and non-audit services during the year by the auditor
are disclosed in Note 29 to the Financial Statements.
In accordance with its Policy for Non-Audit Services Provided by the External Auditor, the Company may decide to employ the auditor
on assignments additional to their statutory audit duties, where the auditor’s expertise and experience with the Company and/or the
Group are important. In the current financial year, PricewaterhouseCoopers invoiced the Group for non-audit fees totalling $95,089.
These non-audit fees remain under the threshold for non-audit services in accordance with the Policy for Non-Audit Services.
Officers of the Company who are former partners of PricewaterhouseCoopers
There are no officers of the Company who are former audit partners of PricewaterhouseCoopers.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act is set out on page 55.
Auditor
PricewaterhouseCoopers continues in office as the auditor of the Company in accordance with section 327 of the Corporations Act.
DIRECTORS’ REPORT
For the year ended 30 June 2024
22
Rounding of amounts
The Company is of a kind referred to in Australian Securities and Investments Commission Legislative Instrument 2016/191, relating
to "rounding off". Amounts in this Report and in the financial statements have been rounded off, stated in accordance with that
Instrument, to the nearest thousand dollars, or in certain cases, the nearest dollar.
This Directors’ Report is made in accordance with a resolution of Directors.
On behalf of the Directors
Toby Hall
Chair
Ian Kadish
Managing Director and Chief
Executive Officer
27 August 2024
Melbourne
23
Integral Diagnostics
Annual Report 2024
The purpose of this Operating and Financial Review is to provide shareholders with additional information regarding the Company’s
operations, financial position, business strategies and prospects. The review complements the Financial Report, which commences on
page 57, and the ASX announcement and full year results presentation dated 27 August 2024.
The Group prepares the Financial Report in accordance with the Australian equivalents of International Financial Reporting Standards
(IFRS) as issued by Australian Accounting Standards Board. Certain parts of this review contain financial measures that have not
been prepared in accordance with IFRS (non-IFRS financial measures) however, have been included as the Group believes that these
non-IFRS financial measures provide a useful means through which to examine the underlying performance of its business. These
non-IFRS financial measures form part of how management reviews the underlying performance of the Group and its communications
with key stakeholders. Refer to page 117-121 for a reconciliation to statutory financial information.
Integral Diagnostics Limited (ASX: IDX) is an Australian and New Zealand healthcare services company whose main activity is providing
diagnostic imaging services to referrers (general practitioners, medical specialists, and allied health professionals) and their patients.
IDX has a diversified revenue mix and focuses on providing a full range of diagnostic imaging modalities. IDX has 90 sites of which 32
are comprehensive sites that are located close to specialist referrers who require higher complexity imaging and make greater use
of CT, MRI, PET and interventional procedures throughout our business. During the year under review IDX operated in Queensland,
Victoria, Western Australia and New Zealand. Refer to page 4 to view 'Our Brands'.
Year in Review
Financial performance overview
A summary income statement providing details of non-operating transactions and reconciling to the statutory income statement is
outlined in the following table:
Summary income statement1
30 June 2024
Actual
$m
30 June 2023
Actual
$m
Revenue
469.7
440.8
Other revenue
0.9
0.4
Total revenue and other income
470.6
441.2
Operating EBITDA
91.5
85.2
Operating EBITA
46.1
43.8
Operating NPAT
18.1
17.9
Non-operating transactions net of tax
Remeasurement of contingent consideration liabilities
1.3
15.8
Transaction, restructuring and integration costs
(3.4)
(4.9)
Share based expenses
(1.0)
(1.9)
Share of net profit of joint ventures
(0.1)
(0.3)
Amortisation of customer contracts
(1.0)
(1.6)
Impairment Expense
(74.6)
-
Statutory NPAT
(60.7)
25.0
Operating EBITDA as a % of revenue
19.5%
19.3%
Operating NPAT as a % of revenue
3.9%
4.1%
Operating diluted EPS (earnings per share)
7.7
7.6
Statutory diluted EPS (earnings per share)
(26.0)
10.6
Return on invested capital (based on Operating EBIT)
7.0%
7.3%
Declared dividend pay-out ratio on Operating NPAT
74.4%
77.9%
1. The operating and financial review includes references to pro forma results to exclude the impact of the adjustments detailed above. The Directors believe the presentation of non-IFRS financial
measures are useful for the users of this financial report as they provide additional and relevant information that reflect the underlying financial performance of the business. Non-IFRS financial
measures contained within this report are not subject to audit or review. For further information on non-IFRS measures used in this report, including a reconciliation to statutory financial information,
refer to the 'Non-IFRS Financial Information' section on pages 122 to 126 of this report.
OPERATING AND FINANCIAL REVIEW
For the year ended 30 June 2024
24
IDX’s results for FY24 reflect the combination of a relatively weak first half (1H FY24) performance together with a materially stronger
second half (2H FY24) profit result, demonstrated by an improvement in Group Operating EBITDA margins by 150bps to 20.3% for 2H
FY24, following a focus on key operational improvement initiatives. In addition, leverage reduced by 0.3x to 2.6x as at 30 June 2024,
compared to 2.9x as at 30 June 2023. The materially stronger second half result is consistent with the outlook provided at the time of
the 1H FY24 results release on 20 February 2024.
IDX’s operating results for FY24 are consistent with the guidance provided at the time of the 1H FY24 results announced on
20 February 2024:
• Solid revenue growth of 6.6% driven by Medicare indexation (3.6% increase effective 1 July 2023 and an additional 0.5% increase
effective 1 November 2023, both increases exclude nuclear medicine), annualisation of FY24 out of pocket fee increases and
continued favourable mix impact.
• Prolonged cost pressures, especially higher labour costs, driven by inflation and labour market supply constraints, together with
higher interest funding costs. Management has focused on various key operational improvement initiatives to contain and reduce
costs wherever possible.
• Operating EBITDA margin of 19.5%, being an increase of 20 bps compared to 19.3% in the prior corresponding period
• An impairment loss announced in 1H FY24 of $71.6m recognised in the New Zealand division, reflecting the impact of changes in
patient referral patterns.
• Statutory Loss after Tax of ($60.7m) after impairment losses, transaction, restructuring and integration costs, amortisation of
customer contracts and other costs, net of tax, of $78.8m.
• Free cash flow reflects the increase in Operating EBITDA, changes in the working capital profile driven by timing of payments as
well as lower replacement capital expenditure in FY24.
• Net debt to EBITDA (pre-AASB 16) of 2.6x at 30 June 2024, being lower than 2.9x at 30 June 2023 and 3.0x at 31 December 2023,
and projected to continue to trend down to the Group’s target ratio of 2.5x or less over time.
Operating NPAT increased by $0.2m or 1.3% to $18.1m and operating diluted earnings per share increased by 0.1 cents per share or
1.2% to 7.7 cents per share.
Statutory NPAT decreased to ($60.7m), with the decrease relative to Operating NPAT being due to non-operating
transactions, including:
• Impairment losses of $74.6m, relating to New Zealand operations ($71.6m) and brand intangibles ($3.0m); and
• Transaction, restructuring and integration costs of $3.4m, consisting of $1.0m relating to acquisitions and integration activities,
$1.2m of restructuring costs, and $1.2m of one-off systems implementation costs, on a post-tax basis.
As some of these non-operating transactions are on the capital account, they are not tax deductible, creating a greater impact on
statutory earnings after tax.
Financial overview
• In FY24 the Group achieved revenue growth of $28.9m.
• Organic operating revenue from all sources (including reporting contracts, some of which are fixed rate) in Australia grew 7.2%
adjusted for working days.
• In Australia IDX recorded a 0.6% gain in revenue market share over the two years ended 30 June 2024 adjusted for working days.
This was evidenced by a 7.3% annual revenue increase in its organic business in comparison to Medicare benefits for the States
in which IDX operates, which have seen a 6.7% annual revenue increase in weighted average benefits paid. For the year ended
30 June 2024, IDX achieved a 7.2% revenue increase in its organic business in comparison to Medicare benefits for the States in
which IDX operates which have seen a 9.7% revenue increase in weighted average benefits paid, reflecting IDX’s growth off a higher
base in the prior year compared to Medicare.
• Average fees per exam (including reporting contracts) in Australia increased by 7.7% in FY24. This reflected Medicare indexation of
3.6% applied to all Diagnostic Imaging Services, including MRI items however excluding Nuclear Medicine items, from 1 July 2023.
Further indexation of 0.5% applied from 1 November 2023, selective price increases and an on-going move to the higher end CT,
MRI and PET scan modalities.
• Organic operating revenue in New Zealand grew 5.3% on a constant currency basis adjusted for working days. New Zealand
revenues continued to be impacted by referrer-owned radiology practices in Auckland. The company is responding by diversifying
our New Zealand referrer base to include more General Practitioners (GPs), and working with our GP referrers to more
comprehensively work up their patients prior to specialist referral.
• Operating EBITDA margin of 19.5%, being an increase of 20 bps compared to 19.3% in the prior corresponding period.
• Operating NPAT of $18.1m.
• Statutory NPAT of ($60.7m) including non-operating transactions, in particular impairment losses of $74.6m and FY24 transaction,
restructuring and integration costs (net of tax) of $3.4m as described above.
25
Integral Diagnostics
Annual Report 2024
Operating performance overview
During FY24 we focused on key operational improvement initiatives as follows:
Improved patient and referrer experience
• Continued roll out of integrated patient booking system to minimise patient wait times and patient waiting lists;
• Strengthened referrer relationships through priority service lines and enhanced e-referral platforms; and
• Educated patients and referrers on selected radiology tests for early diagnosis, e.g. high resolution Chest CT for all smokers and
Cardiac CT’s for patients at risk of heart disease.
Workforce development
• Enhanced clinical productivity, including sub-specialty reporting, through use of technology, such as integrated worklists and AI;
• Grew our Sonographer training program to address workforce shortages;
• More closely aligned staffing levels to match patient demand; and
• Increased regional radiologist registrar training positions at IDX sites.
Increased productivity and efficiency
• Simplified and reduced management layers in organisation structures so that decisions can be made closer to the frontline;
• Continued to drive non-labour cost efficiencies; and
• Grew teleradiology service to assist in cost-effectively balancing the workload.
Lifted asset utilisation
• Focused on improving utilisation of existing installed machine base;
• Selected investment in higher end modalities within FY24 budgeted growth capex; and
• Targeted more capital-light teleradiology tenders, e.g. secured our first NSW teleradiology tender.
Capital expenditure
Total capital expenditure on tangible assets was $23.9m (FY23: $45.2m), of which $14.6m related to equipment replacement and $9.3m
related to growth opportunities, including: in Australia, the Smith Street expansion at South Coast Radiology ($1.0m); phased payments
for Lake Imaging’s Ocean Grove expansion ($0.5m); Imaging Queensland’s PET-CT greenfield in Noosa ($0.5m); in New Zealand, PET
building works for the Cavendish site ($1.3m) which opened in February 2024; and across the business, IT software, infrastructure and
cyber security investment (4.7m).
Acquisitions
There were no acquisitions by the Group during FY24.
During FY23 the contingent consideration provision for the Earn Out A liability for the Imaging Queensland Group was adjusted from
$12.4m to $2.2m, based on the valuation provided by an Independent Expert. This was sought as part of the dispute resolution
process provided for in the Share Sale Contract, as disclosed in Note 20 of the Group's Consolidated Financial Statements for the year
ended 30 June 2023. The Group has made efforts to settle the $2.2m liability for Earn Out A, based on the valuation provided by the
independent expert, however the vendors have declined settlement, and the matter remains in dispute at the date of this report. The
provision for Earn Out B liability remains unchanged at $5.5m and has been classified as a current liability.
Taxation
The effective tax rate on operating earnings is 25.8% (FY23: 31.3%), driven by the recognition of tax losses booked from the acquisition
of Peloton Radiology, as well as deductions taken for transaction advisory fees previously treated as non-deductible.
The effective tax rate on statutory earnings of (6.2%) (FY23: 18.3%) is driven by statutory earnings containing impairment expenses as
well as adjustments to contingent consideration provisions, which are on capital account.
Cash flows
Free cash flows of $56.0m (FY23: $53.1m) increased by 5.5%. Free cash flow conversion before replacement capex was 77.2% (FY23:
92.9%). The increase in free cash flows is due to the increase in Operating EBITDA, changes in the working capital profile driven by
timing of payments, as well as lower replacement capital expenditure in FY24.
OPERATING AND FINANCIAL REVIEW
For the year ended 30 June 2024
26
Capital management
Net debt decreased by $11.0m to $183.5m (FY23: $194.5m). This reflects a combination of operational cash flows, capital expenditure
and dividend payments made throughout the financial year. The Net Debt/EBITDA ratio was 2.6x at 30 June 2024 (FY23: 2.9x).
At 30 June 2024, IDX had cash reserves of $42.4m and committed facilities of $353.7m, of which $128.5m remained undrawn. The
Group’s debt facilities have a five-year term to February 2026 and IDX is in compliance with all the covenants under the debt facility.
Earnings per share
On a statutory basis, basic earnings per share decreased to (26.0) cents per share (FY23: 10.8 cents per share). Diluted earnings per
share in FY24 considering the FY21, FY22, FY23 and FY24 performance rights and options issues was (26.0) cents per share (FY23: 10.6
cents per share). The decreased earnings per share at a statutory level is reflective of the decrease in statutory NPAT to ($60.7m).
On an Operating NPAT basis, Diluted Earnings per Share were 7.7 cents per share (FY23: 7.6 cents per share).
Dividend
Fully franked dividends of 5.8 cents per share (FY23: 6.0 cents per share) totalling $13.5m have been paid or declared for FY24. A fully
franked final dividend of 3.3 cents per share will be paid on 3 October 2024 to shareholders on the register as at 2 September 2024.
This represents 74.4% of Operating NPAT (FY23: 77.9%).
In accordance with the Merger Implementation Deed signed between Integral Diagnostics Limited and Capitol on 18 July 2024, the
Group is permitted to pay a fully franked dividend in connection with the financial year ended 30 June 2024 of between 65.0% and
75.0% of the Operating NPAT of the Group. Under the terms of this agreement, both parties have agreed to suspend the dividend
reinvestment plan until the successful completion of the transaction.
Regulatory outlook
Australia:
MRI Licences
On 1 November 2022, the Federal Government deregulated MRI services in regional and rural areas, defined as Modified Monash
Model 2-7.
On 14 May 2024, the Federal government announced that:
• From 1 July 2025, any practice location that holds a current license (partial or full) will receive a ‘practice-based’ license that
provides full Medicare eligibility to all MRI equipment located at the practice; and
• From 1 July 2027, all comprehensive diagnostic imaging practices will have their ineligible MRI machines upgraded to access all
Medicare funded MRI services, at which point all MRI licensing requirements will cease.
Key Medicare Changes
1 July 2024:
• Indexation of 3.5% on all diagnostic imaging services (excluding nuclear imaging services).
1 November 2024:
• Nuclear medicine subgroup for non-PET imaging services will receive a one-off fee increase of 3.5%, followed by annual indexation
from 1 July 2025 onwards; and
• Reduction by 2% in benefits for all CT services.
27
Integral Diagnostics
Annual Report 2024
New Zealand:
There is limited indexation of pricing in New Zealand, however we have received CPI-like increases commencing in December 2023
from the majority of private health insurers and continue to negotiate with other funders.
The regulatory authorities in New Zealand have determined that non-arms length referral practices by referrers who own interests
in radiology practices or equipment are acceptable. IDX is pursuing various strategic initiatives as a result of this situation, including
diversifying our New Zealand referrer base to include more General Practitioners (GPs), and working with our GP referrers to more
comprehensively work up their patients prior to specialist referral.
Australia and New Zealand:
International medical graduates (radiologists and referring doctors) and other clinicians (including sonographers and nuclear medicine
technologists) are slowly returning to New Zealand and regional Australia, helping to alleviate the skills shortage.
Company outlook
The Company believes the fundamentals of the essential radiology industry are strong. Our industry benefits from being at the
confluence of major global trends – demographic and technological:
• Demographically, the ageing of the population and the increased prevalence of chronic disease and earlier detection will drive
demand for diagnostic services;
• Technological advancements, digitisation and the growth of teleradiology and AI is expected to improve the quality and efficiency of
the care we deliver; and
• Structural shifts to higher acuity modalities.
IDX as a specialist, regionally focused, high-quality provider of diagnostic services is strategically well positioned to benefit from these
important trends and to grow services strongly going forward.
The Company’s focus in FY25 and beyond will be to execute the following key drivers of IDX’s growth strategy:
• Drive organic earnings growth, including through continued focus on execution of key operational improvement initiatives;
• Accelerate use of teleradiology, digital and AI to improve the patient and referrer experience and doctor efficiency, with IDX's
teleradiology business (IDXt) having grown rapidly organically, now including 80 contracted radiologists, and reporting ~15% of IDX
Australian revenue;
• Drive our environmental, social and governance (ESG) strategy;
• Lead through our Values; and
• As balance sheet capacity permits, consider accretive mergers and acquisitions that represent a strong clinical, cultural and
strategic fit.
IDX expects to implement the transformational proposed merger with Capitol in the fourth quarter of calendar year 2024, subject
to satisfaction of the conditions precedent to the merger. The combination of our two highly complementary diagnostic imaging
businesses is expected to realise significant and enduring benefits for all of our combined patients, doctors and shareholders.
OPERATING AND FINANCIAL REVIEW
For the year ended 30 June 2024
28
Balance Sheet
A summary of the balance sheet as at 30 June 2024 and a comparison to the prior year is outlined in the following table:
Balance sheet
30 June 2024
Actual
$m
30 June 2023
Actual
$m
Cash and cash equivalents
42.4
33.9
Trade and other receivables
24.5
21.7
Other current assets
7.9
7.1
Total current assets
74.8
62.7
Property, plant and equipment
148.8
153.1
Right of use assets
121.6
129.4
Intangible assets
399.1
474.8
Deferred tax assets
-
19.0
Investments accounted for using the equity method
-
-
Total non-current assets
669.5
776.3
Total assets
744.3
839.0
Trade and other payables
32.8
31.1
Borrowings
2.2
2.5
Lease liabilities
14.0
14.2
Contingent consideration
9.2
7.5
Provisions
27.5
27.4
Total current liabilities
85.7
82.7
Contingent consideration
0.7
7.8
Borrowings
219.8
221.1
Provisions
10.7
9.5
Lease liabilities
121.9
127.3
Deferred tax liability
3.8
17.6
Total non-current liabilities
356.9
383.3
Total liabilities
442.6
466.0
Net assets
301.7
373.0
• Working capital of ($0.4m) increased slightly by $1.9m, driven by the timing of receivables.
• Provisions (excluding tax) have increased slightly by $1.3m.
• Contingent consideration of $9.9m includes Imaging Queensland ($7.7m) and Horizon Radiology ($0.5m), deferred consideration for
Peloton Radiology ($0.9m) and the X-Ray Group ($0.4m), and deferred income ($0.4m).
• Net debt (including off balance sheet bank guarantees of $3.2m and excluding capitalised borrowing costs of $0.7m) decreased
by $11.0m to $183.5m (FY23: $194.5m). This reflects a combination of operational cash flows, capital expenditure and dividend
payments made throughout the financial year.
29
Integral Diagnostics
Annual Report 2024
Cash flow
A summary of net cash flows as at 30 June 2024 are presented below:
Summary of cash flow
30 June 2024
Actual
$m
30 June 2023
Actual
$m
Free cash flow
56.0
53.1
Growth capital expenditure
(9.3)
(19.1)
Net cash flow before financing, acquisitions and taxation
46.7
34.0
Tax refunded/(paid)
2.0
(2.0)
Interest and other costs paid on borrowings excluding leases
(15.7)
(13.2)
Net change in borrowings
(2.4)
(2.2)
Payments for acquisitions
-
(85.9)
Working capital acquired
-
(0.3)
Proceeds from the issue of equity
1.7
2.2
Contingent consideration paid
(4.0)
(0.2)
Dividends paid
(13.8)
(12.6)
Transaction costs
(2.1)
(4.0)
Integration costs
(3.6)
(2.8)
Capital raising costs
-
-
Other
-
(2.4)
Net cash flows
8.8
(89.4)
• Free cash flows of $56.0m were $2.9m or 5.5% higher than FY23, which was driven by the increase in Operating EBITDA, changes in
the working capital profile driven by timing of payments as well as lower replacement capital expenditure in FY24.
• Growth capital expenditure was $9.3m.
• Dividends of $13.8m (6.0 cents per share fully franked) were paid in FY24.
Risk management
The Company’s Risk Management Framework is now overseen by the Risk, Compliance & Sustainability Committee (RCSC), following
the restructure of the Audit, Risk & Compliance Committee into two Committees during FY24; the Audit Committee (AC) and the RCSC.
The Framework, which is actively managed by members of Senior Management and the Legal and Risk Team, is consistent with ISO
31000:2018 Risk Management – Guidelines, and is subject to an annual review. A copy of the Company’s RCSC Charter can be found on
the Company’s website: www.integraldiagnostics.com.au/corporate-governance.
This Framework, along with the Company's Risk Management Policy and Appetite Statement, is used to implement a consistent
approach to identifying, analysing and evaluating risks to support the Company's business activities and strategies. It also assists in
creating a culture of risk awareness and accountability throughout the business at all levels.
IDX continually reviews, assesses and strengthens its policies and procedures in all areas including clinical governance, regulatory,
occupational health and safety, IT, finance, business continuity and operations. This risk management process is aided by an
independent internal audit program to ensure the effectiveness and compliance of our practices.
Clinical governance is a key component of the Company's risk management and is managed through the Integral Clinical Leadership
Committee (ICLC) and Business Unit Clinical Leadership Committees under the ICLC Charter. A copy of the ICLC Charter can be found
on the Company’s website: www.integraldiagnostics.com.au/corporate-governance.
OPERATING AND FINANCIAL REVIEW
For the year ended 30 June 2024
30
Business risks
A list of IDX’s core risks are described below. These risks are continuously assessed by the business and reported on a regular basis
to the RCSC. Please note that this is not a comprehensive list of all actual and potential risks that may impact IDX’s financial and
operating results in future periods.
Risk Area
Risk Management Strategy
Regulatory changes
Changes to funding and government policies and
regulations may have a material adverse impact
on the financial and operational performance of the
Company, including the deregulation of MRIs which
may remove significant barriers to entry into the
diagnostic imaging market.
• Regular monitoring of funding and regulatory changes and
industry developments.
• Membership of, and participation in, the Australian Diagnostic
Imaging Association.
• Membership of, and participation in, the Royal Australian New Zealand
College of Radiologists.
Maintaining strong referrer relationships
A material loss of, or lack of growth in, referrals
to IDX would impact financial and operational
performance of the Company.
• Maintenance of existing relationships across IDX’s referrer network through
a process of continuous engagement.
• Continuous investment in new technology to enhance access and service
for referrers and patients.
• Clinical Leadership Committees in each business unit, supported by local
management to drive clinical governance.
Mergers and acquisitions
It is IDX’s strategy to drive growth organically
and through mergers and acquisitions (M&A).
This strategy may place significant demands
on management, resources, internal controls
and systems, resulting in the failure to
realise anticipated benefits or effectively
integrate acquisitions.
• Program of oversight for M&A activity, due diligence and integration.
• Detailed due diligence processes and procedures, including the
development of integration and resourcing plans.
• Engagement of external advisors to assist in identifying risks, challenges
and opportunities of acquisitions.
Contracts and service agreements
Contracts and service agreements may be
breached, terminated or not renewed resulting in
loss of revenue and operating profit.
• Regular review of all IDX contracts for completeness of information,
renewal dates, contract owners and performance against SLA’s.
• Maintenance of a digital contract database which sends automatic
reminders to contract owners about contract milestones including
expiry dates.
Clinical risk management
The risk of patient harm due to human error or a
lack of effective clinical governance and processes.
• ICLC manages and advises on clinical governance matters, including patient
care, clinical standards and quality assurance.
• Consistent clinical risk and incident reporting processes in place across
the Company and business units, to review incident data and resulting
recommendations at all management levels, through to the ARCC and
the Board.
• Chief Medical Officer (CMO) further strengthens focus on clinical
governance within IDX.
• Maintenance of appropriate insurance arrangements, including in relation
to medical malpractice.
• Radiologist peer review systems in place.
Privacy and confidentiality
The Company relies on secure processing,
transmission and storage of confidential, proprietary
and other information in its IT infrastructure.
The loss or misuse of personal information, or
inadequate and insecure data protection and privacy
protocols, may result in a breach of a patient or
referrer privacy and confidentiality.
• Consistent privacy policies and practices in place across the Company that
have been reviewed by external privacy experts for compliance with the
required laws in Australia and New Zealand.
• Provision of training for staff.
• Cyber security and IT infrastructure controls in place and
continually reviewed.
31
Integral Diagnostics
Annual Report 2024
Risk Area
Risk Management Strategy
Cyber security
A material cyber security event, data breach
or attack on IDX, or the inability of IDX
to respond to the continually evolving threats
affecting its operations and involving significant
remediation resources.
• Provision of cyber security training including phishing training and
simulations for staff.
• Ongoing penetration testing by an external party to review protections
against increasing threats.
• Regular meetings of Cyber Security Steering Committee.
• Alignment of the Company’s cyber security framework and controls to
industry standards, including annual cyber maturity assessments.
• Business continuity and disaster recovery plans in place, including data
breach simulations held with senior leaders and the Board.
Attraction and retention of talent
The risk of an inability to attract and retain
quality radiologists, management and staff due
to competition across the market, geographical
location of some sites or other factors.
• Investment in employee engagement, professional development and culture
building activities across IDX.
• Implementation of a Leadership Capability Framework and a Performance
and Development Framework.
• Targeted recruitment campaigns both locally and overseas.
• Provision of People and Culture support across the Company for all staff,
including an Employee Assistance Program.
Competitive market dynamics
Changing competitive trends in the radiology
market including the emergence of medical
specialist groups purchasing their own diagnostic
equipment, new market entrants or increasing
competition from radiologists setting up
independent practices.
• Proactive monitoring of changes in the market, to stay abreast of and
respond to identified changes.
• Focus on maintaining and growing referrer relationships.
• Participation in industry group forums.
Climate change
The risk of events resulting from climate change
adversely impacting IDX’s operations, including
providing clinical care to our patients, and having
a negative impact on the financial performance and
position of the Company.
• Maintenance of business continuity plans for both clinical and
corporate operations.
• Development and implementation of IDX’s ESG strategy aligned to its
values and with a view to complying with the proposed climate-related
disclosure standards in Australia.
OPERATING AND FINANCIAL REVIEW
For the year ended 30 June 2024
32
Introduction from the People, Culture and Remuneration Committee Chair
Dear Shareholders
On behalf of the Board, I am pleased to present the Remuneration Report for the 2024 financial year. We will seek your approval of the
report at our 2024 Annual General Meeting.
Our Executive Remuneration Framework has always sought to achieve the key objectives of being:
• competitive, fair and equitable;
• linked to performance and consistent with the Group's values and strategy;
• aligned with the interests of shareholders and other stakeholders; and
• applied with appropriate transparency, particularly in relation to KMP.
Consistent with FY23, the Company included a risk, compliance and conduct gateway to the granting of any STI award in FY24. While
the FY24 gateway was satisfied, the financial KPI threshold representing 50% of the potential STI was not achieved and therefore no
award was made for the financial component.
In FY24 the non-financial award portion of the STI included sustainability goals to support the Group's ongoing achievements of its ESG
strategy. This recognises that our patients, people, culture and risk management are integral to our ongoing success and ability to
differentiate in an increasingly competitive market. Sustainability goals include measures related to patient and referrer satisfaction,
employee engagement, safety and injury prevention, employee turnover and environmental impact. The majority of quantifiable
outcomes were achieved in the non-financial KPls by the Executive KMP in FY24.
Details of the Managing Director's achievements against the FY24 STI KPls are provided on page 46. For all other executive KMP a
summary of key individual and common KPls and the STls awarded in FY24 are shown on page 47. In total the STI awards ranged
from 13% to 40% of the STI opportunity in FY24. The STI maximum opportunity was again set at 50% of the KMP’s Total Fixed
Remuneration (TFR).
The testing of the FY21 LTI grant at the end of FY24 failed to meet the threshold Diluted Operating EPS growth rates over the period
and as such those rights have lapsed.
For FY25, with the transformative potential Capitol Health Limited ("Capitol") merger, the STI KPI framework has been designed to
provide for two alternatives depending on whether the Capitol merger proceeds and considers distinct measurement periods and
adjusted KPIs. Given the opportunity for shareholders of the Capitol merger, the Board has also determined a one-off performance
measured remuneration opportunity for Executive KMP for FY25 should the merger proceed. Details of the adjusted STI framework
and the performance measured opportunity are provided on page 50. With these exceptions the Executive Remuneration Framework in
FY25 remains essentially the same as in FY24.
The Board also proposes to seek shareholder approval for an increase to the Non-Executive Director (NED) fee pool at our 2024 Annual
General Meeting. The NED fee pool has not been changed since it was set in 2015. Details of this proposal are provided at page 51.
We look forward to your support and welcome your feedback on our Remuneration Report.
Sincerely
Andrew Fay
People, Culture
and Remuneration
Committee Chair
27 August 2024
REMUNERATION REPORT
For year ended 30 June 2024
33
Integral Diagnostics
Annual Report 2024
What's inside
The Remuneration Report is set out under the following main headings:
a.
The role of the People, Culture and Remuneration Committee
35
b.
Overview of FY24 Executive Remuneration Framework
36
c.
Executive KMP Remuneration outcomes for FY24
41
d.
Cumulative interest of Executives under the LTI program
47
e.
Executive service agreements
48
f.
Non-Executive Director and Radiologist Executive Director Remuneration
49
g.
KMP minimum shareholding policy and shareholdings
52
h.
Other transactions with KMP and their related parties
54
About the Remuneration Report
The Remuneration Report, which has been audited, outlines the Director and Executive KMP remuneration arrangements for the Group
in accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key Management Personnel (KMP) of the Group are those persons having authority and responsibility for planning, directing and
controlling the activities of the entity, directly or indirectly, including all Directors. The table below lists KMP for the year ended
30 June 2024 (FY24). All KMP held their position for the duration of FY24, unless otherwise noted.
Name
Position
Executive KMP
Dr Ian Kadish
Craig White
Paul McCrow
Managing Director and Chief Executive Officer
Chief Financial Officer
Chief Operating Officer (employment ceased 23 October 2023)
Non-Executive Directors
Toby Hall
Raelene Murphy
Andrew Fay
Ingrid Player
Helen Kurincic
John Atkin
Independent, Non-Executive Director (appointed 28 September 2023)
Independent, Non-Executive Director
Independent, Non-Executive Director
Independent, Non-Executive Director (appointed 29 August 2023)
Independent, Non-Executive Director (resigned 29 November 2023)
Independent, Non-Executive Director (resigned 31 August 2023)
Radiologist Executive Directors
Dr Jacqueline Milne
Dr Nazar Bokani
Radiologist Executive Director (resigned 5 August 2024)
Radiologist Executive Director (resigned 9 August 2023)
REMUNERATION REPORT
For year ended 30 June 2024
34
a. The role of the People, Culture and Remuneration Committee
The People, Culture and Remuneration Committee (PCRC) is governed by the PCRC Charter. It is responsible for reviewing and
recommending to the Board, compensation arrangements for the Non-Executive Directors (NEDs), Executive Directors, other KMP and
Senior Management including:
1.
contract terms, annual remuneration and participation in any short and long term incentive plans;
2.
major changes and developments in the Company's remuneration, superannuation, talent attraction, retention and
termination policies;
3.
setting, monitoring and assessing the Company's culture;
4.
remuneration strategy, performance targets and incentive payments for the CEO and the Executives that report to the CEO; and
5.
remuneration arrangements for the Chair, NEDs and Executive Directors of the Board.
The PCRC also reviews and makes recommendations to the Board regarding 'people' by monitoring and reviewing the Senior
Leadership performance assessment process, reviewing major changes and developments in the personnel practices and industrial
relations strategies of the Group, senior leadership succession planning, and overseeing the effectiveness of the Inclusion and
Diversity Policy.
The following NEDs, all of whom are regarded as independent, were members of the PCRC for the full FY24 financial year, unless
otherwise stated:
Andrew Fay — Chair
Independent, Non-Executive Director
Toby Hall
Independent, Non-Executive Director (appointed 29 September 2023)
Raelene Murphy
Independent, Non-Executive Director
Ingrid Player
Independent, Non-Executive Director (appointed 29 August 2023)
Helen Kurincic
Independent, Non-Executive Director (resigned 29 November 2023)
John Atkin
Independent, Non-Executive Director (resigned 31 August 2023)
Use of remuneration consultants
The Board ensures that any recommendations made by consultants in relation to remuneration arrangements of KMP must be made
directly to the Board without any influence from management. These arrangements ensure any advice is independent of management
and management are not able to attend Board or Committee meetings where recommendations relating to their remuneration
are discussed.
The Board did not engage any remuneration consultants during the financial year.
35
Integral Diagnostics
Annual Report 2024
b. Overview of FY24 Executive Remuneration Framework
The Board of Directors (Board) works to ensure that the Executive Remuneration Framework satisfies the following key criteria:
• being competitive, fair and equitable;
• linked to performance and consistent with the Group's values and strategy;
• aligned with the interests of shareholders and other stakeholders; and
• having appropriate transparency in application, particularly to KMP.
Remuneration Framework
The objective of the Group’s Executive Remuneration Framework is to align executive remuneration with the achievement of strategic
and sustainability objectives, the creation of value for shareholders, and to ensure the reward for performance is competitive and
appropriate for the results delivered.
Figure 1 outlines the components of Executive KMP remuneration and their purpose.
Figure 1:
FY24 KMP Remuneration Framework
Fixed Remuneration
Cash, superannuation,
non-monetary awards
STI
50% delivered as cash
STI
50% delivered as deferred equity
LTI
Performance rights converted to shares after 3 years
Year 1
Year 2
Year 3
Fixed
Variable 'at risk'
Fixed Remuneration
Short Term Incentive
Long Term Incentive
Purpose and Alignment
Market competitive to attract and
retain talent.
To drive achievement of short term
financial, strategic and sustainability
priorities as agreed by the Board.
To reward and incentivise Executive
KMP to drive sustained creation of
shareholder value.
Value to Individual
• Fixed market remuneration is
comparable to market. The market
is defined around similar companies
based on revenue, comparable
industries and business size.
• Fixed remuneration may deviate from
the market depending on individual
alignment to capabilities, experience
and performance.
• A risk, compliance and conduct
gateway must be met to qualify for
a STI.
• Awards are based on financial
performance, individual performance
of strategic KPIs and organisational
performance of sustainability KPIs.
• Performance measures are aligned to
long term shareholder returns and
value creation.
• Vesting is based on achievement of
aggregate earnings per share (EPS),
relative total shareholder returns (rTSR)
and target average return on invested
capital (ROIC).
REMUNERATION REPORT
For year ended 30 June 2024
36
Executive KMP remuneration arrangements
The Executive Remuneration Framework for the FY24 financial year had three components:
• fixed remuneration (including base salary and superannuation) and non-monetary benefits;
• short-term performance incentives; and
• long-term performance incentives.
The combination of these comprises the Executives' total remuneration.
An Executive's remuneration arrangement is reviewed annually by the PCRC, based on individual and business performance, the
overall performance of the Group and comparable market data. At risk remuneration consists of the short-term (STI) and long-term
(LTI) incentive programs, which have been designed to align Executive remuneration with the creation of shareholder value through
achievement of financial and non-financial objectives.
Remuneration mix
The stretch remuneration mix is shown below. It reflects the STI opportunity that will be available if the performance conditions are
satisfied at stretch, and the face value of the LTI performance rights granted during the year, as determined at grant date. The stretch
remuneration mix has a deliberate weighting to the LTI consistent with the Company’s strategy of delivering increased shareholder
value over the longer term.
Executive KMP
Fixed remuneration
(%)
STI
(%)
LTI
(%)
Total remuneration
(%)
Dr Ian Kadish
40%
20%
40%
100%
Craig White
45%
22%
33%
100%
Paul McCrow
50%
25%
25%
100%
With 60% of the CEO’s salary at risk, assuming the performance stretch is achieved in FY24, this will result in 50% of remuneration
comprising of deferred equity vesting over one to three years.
Fixed remuneration
Delivery mechanism
• 100% cash payment including base salary, allowances, other non monetary and fringe benefits and
employer superannuation contributions.
Considerations
• Role scope and complexity.
• The Executive’s skills and experience.
Strategic objective
• Attract and retain suitably qualified and experienced talent.
Governance
• Fixed remuneration is reviewed and benchmarked annually by the PCRC with regard to market
rates and individual performance and is approved by the Board.
• There are no guaranteed increases to fixed remuneration in employment contracts.
37
Integral Diagnostics
Annual Report 2024
Short term incentive (STI)
Delivery mechanism
• 50% delivered as cash and 50% delivered as deferred equity.
Performance period
• The STI targets were set at the commencement of FY24 and assessed by the PCRC at the end of the
financial year, based on the Company’s annual financial targets and individual performance against
non-financial targets.
Gateway and
performance measures1
Gateway
• A risk, compliance and conduct gateway is in place for all Executives, which must be met before the
grant of any STI award can be made.
Financial performance target
• 50% of STI is available based on achievement of year-on-year Operating NPAT growth. Operating
NPAT growth was selected because it is linked to the creation of shareholder returns.
Should a decision be made during the year that significantly changes the number of shares on
issue (e.g. acquisition, buyback) the original NPAT hurdle will be adjusted to a diluted Operating
EPS measure.
Non-financial performance targets
• 50% of STI is available on achievement of non-financial objectives, which are made up of a mix of
strategic and sustainability goals and priorities identified by the Board, with measures to assess
performance against those objectives set at that time. Sustainability goals include measures related
to patient satisfaction, employee engagement, safety and injury prevention, employee turnover and
environmental impact.
STI opportunity
Maximum STI opportunities are outlined below:
Executive
Maximum opportunity
Dr Ian Kadish
50% of fixed remuneration
Craig White
50% of fixed remuneration
Paul McCrow
50% of fixed remuneration
Strategic objective
• The financial performance targets were chosen because they are aligned with the short-term
objectives of the business, while being consistent with the long-term strategy of the Company.
• The non-financial performance targets ensure Executives consider non-financial objectives when
making strategic decisions. All are essential to positive outcomes for the Company and its
stakeholders, and recognise that our patients, people, culture and risk management are integral
to the Company's sustainability, ongoing success and ability to differentiate in an increasingly
competitive market.
Governance
• Performance measures and objectives are clearly defined and measurable.
• Targets are recommended by the PCRC and approved by the Board.
• Any incentive payment is not an entitlement and provided at the discretion of the Board.
1. The remuneration report includes references to non-IFRS financial information. The Directors believe the presentation of non-IFRS financial measures are useful for the users of this remuneration
report as they provide additional and relevant information that reflect the underlying financial performance of the business and measurement against performance criteria. For further information on
non-IFRS measures used in this report, including a reconciliation to statutory financial information, refer to the 'Non-IFRS Financial Information' section on pages 117-121 of this report.
REMUNERATION REPORT
For year ended 30 June 2024
38
Long term incentive (LTI)
Delivery mechanism
• The LTI award is delivered in the form of performance rights.
• The number of performance rights granted to participants is determined by use of a face value
methodology. In the absence of special circumstances warranting another pricing method, a
participant's LTI award is divided by the 30-day VWAP for the period up to and including 30 June in
the prior financial year and rounded up to the nearest whole number to determine the number of
performance rights granted.
• Each Performance Right entitles the holder to one ordinary share in the Company (or an equivalent
cash payment in lieu of an allocation of shares) subject to the satisfaction of performance
conditions. performance rights are granted by the Company at no cost to the participant and no
payment is required to be made on vesting and exercise of the performance rights.
• Performance rights will automatically be exercised on vesting.
• Performance rights do not carry any voting or dividend entitlements prior to vesting and exercise.
Performance Period
The LTI performance rights are tested based on performance over a three-year period commencing on
1 July in the year they are granted.
Performance conditions
and measures1
The performance rights are subject to measurement against hurdles set for the following three KPIs:
• aggregate diluted Operating Earnings Per Share (EPS) (50% weighting);
• relative Total Shareholder Return (TSR) (25% weighting); and
• Return on Invested Capital (ROIC) (25% weighting).
The diluted Operating EPS performance condition will be measured by reference to the cumulative
Company EPS over a period of three financial years, commencing on 1 July in the year of the grant.
EPS measures the earnings generated by the Company attributable to each share on issue on a fully
diluted basis. The EPS performance condition was selected because of its correlation with long-term
shareholder return and its lower susceptibility to short-term share price volatility. Calculation of EPS
and achievement against the performance condition will be determined by the Board in its absolute
discretion, having regard to any matters that it considers relevant (including any adjustments for
unusual or non-recurring items that the Board consider appropriate).
The FY24 LTI EPS performance condition is detailed on page 46.
The TSR performance condition measures the growth in the Company's share price, together with the
value of any cash dividends and any other shareholder benefits paid during the three-year performance
period (and assuming those dividends and other shareholder benefits were reinvested in additional
shares in the Company). Relative TSR provides a direct link between executive remuneration and
shareholder return relative to the Company's peers.
The FY24 TSR performance condition is detailed on page 46.
The ROIC performance condition is based on internal targets related to return on invested capital. ROIC
has been chosen as a performance condition as the Board believes that a primary focus in coming
years should be an improvement in the return from the substantial investments the Company has made
into its business. The Board has set ROIC target ranges at the start of the performance period, taking
into account the market conditions and company specific factors at the time.
At the end of the Performance Period, actual average ROIC will be calculated by taking the total of the
actual ROIC achieved for each year of the Performance Period, divided by three. Measurement of the
average actual ROIC would exclude any significant one-off events, and the initial impact of business
development initiatives, as approved by the Board.
In the ordinary course, if there is an asset impairment, the calculation for the Invested Capital will add
back the value of the impairment for testing the relevant LTI grants.
The FY24 ROIC performance condition is detailed on page 46.
Assessment of
performance conditions
• Aggregate EPS is to be calculated with reference to underlying earnings (operating NPAT2).
• TSR will be measured against the Company's relevant peer group of S&P ASX300 Accumulation
Index, excluding Banks3 and Resource companies.
• ROIC is to be calculated as earnings before interest and tax (Operating EBIT) divided by invested
capital. Invested capital is defined as net debt, plus lease liabilities plus contributed share capital.
39
Integral Diagnostics
Annual Report 2024
Long term incentive (LTI)
Testing of
performance conditions
• Testing of the performance conditions is expected to occur shortly after the end of the
Performance Period.
• Any performance rights that vest will be automatically exercised, and participants are not required
to pay an exercise price. Any remaining performance rights that do not vest will lapse.
LTI opportunity
Maximum LTI opportunities are outlined below:
Executive
Maximum opportunity
Dr Ian Kadish
100% of fixed remuneration
Craig White
75% of fixed remuneration
Paul McCrow
50% of fixed remuneration
Additional restrictions
• Participants in the LTI Plan may elect to place an additional dealing restriction, by way of a holding
lock, foregoing the right to trade on any shares they may receive on vesting and exercise of the
performance rights.
• The minimum additional restriction periods that may be chosen range from one to eight years
after vesting.
Treatment of cessation
• Where a participant ceases employment for cause or due to resignation (other than due to death,
permanent disability or serious illness), all unvested performance rights will be forfeited unless the
Board determines otherwise.
• In all other circumstances, a pro-rata portion of performance rights (based on the portion of
the Performance Period that has elapsed) will remain on foot and be subject to the original
performance conditions, as though the participant had not ceased employment, unless the Board
determines otherwise.
Change of control4
• Where there is a takeover bid or other transaction, event or state of affairs that, in the Board's
opinion, is likely to result in a change of control of the Company, the Board has the discretion
to accelerate vesting of some or all of the performance rights (but not less than a pro-rata
portion calculated based on the portion of the Performance Period that has elapsed and tested
based on performance against the performance condition to that date). Where only some of the
performance rights are vested on a change of control, the remainder of the performance rights will
immediately lapse.
• If an actual change of control occurs before the Board exercises its discretion, a pro-rata portion of
the performance rights (equal to the portion of the relevant Performance Period that has elapsed up
to the change of control) will be tested based on performance against the performance
condition to that date. The Board retains a discretion to determine whether the remaining unvested
performance rights will vest or lapse.
Forfeiture and clawback
• The Board has broad ‘clawback’ powers to determine that any performance rights granted
under the LTI Plan may lapse, shares allocated on vesting and exercise be forfeited, or cash
payments or dividends be repaid in certain circumstances (e.g. in the case of fraud or gross
misconduct). This protects the Company against the payment of benefits where participants have
acted inappropriately.
Strategic objective
• The LTI Plan is designed to encourage Executives to focus on the key performance drivers
that underpin sustainable growth in shareholder value within the boundaries of the Company’s
risk management framework. It is also designed to align the interests of Executives with the
interests of shareholders, by providing an opportunity for Executives to receive an equity interest in
the Company.
Governance
• The performance conditions are clearly defined and measurable.
• Any grant is not an entitlement and is provided at the discretion of the Board.
1. The remuneration report includes references to non-IFRS financial information. The Directors believe the presentation of non-IFRS financial measures are useful for the users of this remuneration
report as they provide additional and relevant information that reflect the underlying financial performance of the business and measurement against performance criteria. For further information on
non-IFRS measures used in this report, including a reconciliation to statutory financial information, refer to the 'Non-IFRS Financial Information' section on pages 117-121 of this report.
2. Operating NPAT is defined as NPAT before non-operating transactions as included in the Operating and Financial Review.
3. Banks are defined as entities included in the official S&P/ASX 300 Banks index including NAB, Virgin Money Ltd, Judo Capital Holdings Ltd, CBA, ANZ, Westpac, BOQ, Bendigo & Adelaide Bank Ltd and
Mystate Limited..
4. The Board has determined that, absent of malus, if there is a change of control it would exercise discretion to fully accelerate vesting of the CFO FY22 performance rights.
REMUNERATION REPORT
For year ended 30 June 2024
40
c. Executive KMP remuneration outcomes for FY24
Statutory remuneration outcomes for FY24
Details of the remuneration received by the Group’s Executive KMP for FY24 and the prior financial year are set out in the
following tables.
Short term benefits
Post
employment
benefits
Termination
payments
Long term benefits
Cash salary
and fees
$
Short-term
incentive
(cash
settled)
$
Super
$
Termination
payments
$
Share based
payments
(equity
settled)
$
Leave
entitlements
$
Total
remuneration
$
Proportion
of
remuneration
tied to
performance
%1
Dr Ian Kadish - Managing Director and Chief Executive Officer
FY24
824,764
72,917
27,399
-
310,0632
8,609
1,243,752
30.8%
FY23
794,135
85,913
25,292
-
167,228
25,155
1,097,723
23.1%
Craig White - Chief Financial Officer
FY24
617,414
65,286
27,399
-
200,4813
13,249
923,829
28.8%
FY23
594,720
67,425
25,292
-
106,860
7,410
801,707
21.7%
Paul McCrow - Chief Operating Officer4
FY24
119,532
12,910
24,106
272,862
110,4825
(8,026)
531,866
23.2%
FY23
418,631
32,977
25,292
-
47,458
12,782
537,140
15.0%
Total Statutory Remuneration for Executive KMP
FY24
1,561,710
151,113
78,904
272,862
621,026
13,832
2,699,447
28.6%
FY23
1,807,486
186,315
75,876
-
321,546
45,347
2,436,570
20.8%
1. There were no non-monetary benefits for KMP's in FY24.
2. Dr Ian Kadish's FY24 share based payments is comprised of $71,085 of equity settled STI awards and $238,978 of LTI awards.
3. Craig White's FY24 share based payments is comprised of $59,818 in equity settled STI awards and $140,663 in LTI awards.
4. Paul McCrow left the Group on 23 October 2023 and ceased as a KMP on this date. Mr McCrow was deemed a good leaver by the Board, and as a result, the remaining expense relating to the FY23 LTI
grant on foot has been recognised in the income statement in the current year, as the service condition is deemed to have been met. The termination payments include $192,033 of gardening leave and
$80,829 of lump sum termination payments made to Mr McCrow upon cessation.
5. Paul McCrow's FY24 share based payments is comprised of $26,200 of equity settled STI awards and $84,282 of LTI awards.
41
Integral Diagnostics
Annual Report 2024
Realised remuneration for FY24 (non-IFRS information)
The following table shows the actual remuneration paid to, and the equity which vested for, each Executive KMP in the FY24 and
FY23 financial years. Realised remuneration differs from statutory remuneration presented in the previous table, which is prepared
in accordance with the Corporations Act 2001 (Cth) and Accounting Standards, and require share-based payments to be reported as
remuneration from the time of grant, even though the actual value ultimately may not be realised from these share based payments.
Realised remuneration only reports remuneration and awards vested by the participants in any given financial year. The Directors
believe this information provides clarity as to the relationship between the statutory remuneration reported in the table above to actual
remuneration realised.
Fixed
remuneration
$
STI
$1
Super
$
Annual leave
entitlements
$
Vesting of prior
LTI grants
$2
Total
remuneration
$
Dr Ian Kadish - Managing Director and Chief Executive Officer
FY24
824,764
72,917
27,399
(1,420)
-
923,660
FY23
794,135
85,913
25,292
(12,077)
-
893,263
Craig White - Chief Financial Officer
FY24
617,414
65,286
27,399
14,298
-
724,397
FY23
594,720
67,425
25,292
(5,088)
-
682,349
Paul McCrow - Chief Operating Officer3
FY24
392,394
12,910
24,106
11,167
-
440,577
FY23
418,630
32,977
25,292
(2,978)
-
473,921
Total Realised Remuneration for Executive KMP
FY24
1,834,572
151,113
78,904
24,045
-
2,088,634
FY23
1,807,485
186,315
75,876
(20,143)
-
2,049,533
1. Of the total STI realised for FY24, only 50% will be settled in cash. The remaining 50% of the STI award (totalling $151,113) will be settled in deferred equity provided the participant is employed by the
Group at 30 June 2025.
2. Valued on the five day VWAP of IDX ordinary shares up to vesting date.
3. Paul McCrow left the Group on 23 October 2023 and ceased as a KMP on this date. Realised fixed remuneration includes the payment of outstanding annual leave balances totalling $47,915.
REMUNERATION REPORT
For year ended 30 June 2024
42
Alignment of remuneration with Group performance
The Company aims to align its Executive remuneration with its strategic and business objectives and the creation of shareholder value.
The table below shows measures of the Group’s financial performance over the past four years. Consistent with Company strategy, the
table shows the Group's performance over that period.
The link between the Company’s performance and STI and LTI outcomes is considered in the sections below.
Key measures of the Group1,2
FY24
FY23
FY22
FY21
FY20
Operating EBITDA as a % of revenue
19.5%
19.3%
20.8%
26.8%
27.6%
Operating NPAT as a % of revenue
3.9%
4.0%
6.0%
10.9%
11.4%
Diluted Operating EPS
7.7 cps
7.6 cps
10.2 cps
19.0 cps
16.6 cps
Return on invested capital
7.0%
7.3%
8.2%
14.1%
16.2%
Closing share price
2.67
3.28
3.03
5.20
3.90
Dividends paid or declared per share
5.8 cps
6.0 cps
7.0 cps
12.2 cps
9.5 cps
Declared operating dividend payout ratio
74.4%
77.9%
84.9%
68.8%
80.0%
1. Key measures for the period are measured on a pre-AASB 16 basis.
2. The remuneration report includes references to non-IFRS financial information. The Directors believe the presentation of non-IFRS financial measures are useful for the users of this remuneration
report as they provide additional and relevant information that reflect the underlying financial performance of the business and measurement against performance criteria. For further information on
non-IFRS measures used in this report, including a reconciliation to statutory financial information, refer to the 'Non-IFRS Financial Information' section on pages 117-121 to 126 of this report.
Fixed Executive Remuneration
Fixed remuneration in FY24 increased by 4% for all Executive KMP, to $821,600 for the CEO, $644,800 for the CFO and $409,500 for
the COO.
STI Outcomes and Payments
The Committee undertakes a quarterly and end of financial year performance review of the Executive KMP achievements against the
financial and non-financial criteria to recommend the STI award payable. Any award of a STI to Executive KMP requires Board approval.
Cash STI payments are made the financial year following the year in which they were earned.
The Board has ultimate discretion to apply judgement or make adjustments when approving the final performance outcomes. The
Board did not exercise any discretions or make any adjustments in determining the outcome of the Executive KMP's STI award
for FY24.
For each strategic and sustainability goal the Board established criteria by which achievement of that goal could be assessed. This was
designed to ensure that as far as possible the achievement was capable of objective determination.
A summary of the CEO’s performance criteria, achievements and outcomes for the FY24 STI opportunity is provided on page 43. A
summary table providing the aggregate STI results for Executive KMP is shown on page 45.
43
Integral Diagnostics
Annual Report 2024
CEO's FY24 STI Scorecard
Criteria
Weighting
Strategic objectives
Result
Performance detail
Financial
50%
Operating NPAT targets set by
the Board:
• < $22.8m = 0%
• $22.8m (threshold) = 50%
• $24.0m (target) = 75%
• ≥ $26.7m (stretch) = 100%
0%
• Operating NPAT of $18.1m below threshold.
• Material improvement in second half results (1H
FY24: $7.4m, 2H FY24: $10.7m). Operating EPS +1.2%
year on year, (1H FY24: -6.1% versus 1H FY23; 2H
FY24: +7.4% versus 2H FY23).
Non
Financial
30%
Execution of projects critical for long term performance and growth of the business
• Execute on value accretive
organic or inorganic
growth opportunities with
the potential to deliver
>$20m EBITDA
10%
• The Capitol merger opportunity will result in over
$20m additional EBITDA with forecast pro forma
double digit EPS accretion for IDX shareholders.
• Integration plan agreed as part of the merger.
Integration teams and Steering Committee in place,
completed all key deliverables in accordance with
the plan.
• Assessment of deliverables
relating to market growth
and key strategic and
commercial projects
including digital and AI
technologies for patient care,
service or efficiency
10%
• IDX like for like Australian revenue growth rate of
slightly below Medicare growth rate.
• Mixed Radiologist recruitment and retention results.
• Increased usage of AI algorithms, voice recognition
reporting, digital patient apps across the
wider group aiding in efficiencies and better
patient outcomes.
• Third party Teleradiology contract wins to grow
IDXT revenues.
• Expanded gap pricing where appropriate due to
Medicare's significantly lower than inflation
price increases.
20%
Sustainability, leadership and culture
• Patient satisfaction
• Employee engagement
• Safety and injury prevention
• Employee turnover
• Environmental impact
15.5% • Patient satisfaction levels were consistently high
achieving an average NPS score of 84.
• Improvement in employee engagement score which
was above stretch for FY24.
• Safety and injury prevention met the threshold
requirement for FY24.
• The target for reduction in unplanned staff turnover
was partially achieved in FY24.
• IDX Carbon Emissions Reduction Strategy was not
fully implemented and did not reach target.
Total
Financial
50%
0.0%
Total Non-
Financial
50%
35.5%
Total of STI
opportunity
100%
35.5%
The Executive KMP achieved many aspects of their strategic and sustainability goals, which was a meaningful achievement under
the circumstances, given the challenging trading conditions of FY24. However, the financial goal was not achieved as per the
CEO’s outcome.
REMUNERATION REPORT
For year ended 30 June 2024
44
The table below shows the STI awarded for each KMP for the current and preceding financial years:
FY24
FY23
Executive KMP
STI foregone
(%)
STI awarded
(%)
STI awarded
$1
STI foregone
(%)
STI awarded
(%)
STI awarded
$
Dr Ian Kadish
64%
36%
145,834
55%
44%
171,825
Craig White
60%
40%
130,572
55%
44%
134,850
Paul McCrow2
87%
13%
25,819
66%
34%
65,953
1. Includes both cash and equity settled STI awards.
2. Paul McCrow's FY24 STI award has been prorated to 23 April 24, the date that his gardening leave ended.
The CFO and the COO were also set non-financial measurable targets comprising of strategic and sustainability objectives. These are
outlined below:
Strategic Objectives
CFO
COO
• Business development through organic and inorganic
growth opportunities
• Acquisition integration
• Reduce ongoing business cost structures primarily in
central functions
• Implementation of group-wide Operational Dashboard to aid
business efficiency
• Improving operational performance
• Growth initiatives and supporting local greenfield and
brownfield strategies
• Acquisition integration
• Radiologist and referrer engagement
Sustainability Objectives
Applicable to both
• Patient satisfaction
• Employee engagement
• Safety and injury prevention
• Employee turnover
• Environmental impact
LTI Outcomes and Payments
The FY21 LTI was tested over four years to the results for the year ended 30 June 2024. Diluted Operating Earnings per Share declined
from 16.2 to 7.7 cents per share, representing a negative compound annual growth rate of (17.0%). This did not meet the threshold
target of 5% growth set for the FY21 LTI performance rights and therefore all FY21 LTI Rights have lapsed.
45
Integral Diagnostics
Annual Report 2024
LTI performance rights granted in FY24
For FY24, the LTI performance conditions have been determined as follows:
Performance conditions and measures
EPS performance condition
The percentage of LTI Rights subject to the EPS performance condition that will be eligible for vesting
(if any) at the end of the performance period of three years will be determined as follows:
Aggregate diluted Operating EPS (cents per
share) over the performance period
% of LTI Rights that vest
Less than 35cps
Nil
Equal to 35cps
20%
Between 35 and 45cps
Straight line pro rata vesting between 20%
and 100%
Equal to, or above, 45cps
100%
TSR performance condition
The percentage of LTI Rights subject to the TSR performance condition that will be eligible for Vesting
(if any) at the end of the performance period of three years will be determined as follows:
TSR ranking achieved
% of LTI Rights that vest
Below the 51st percentile
Nil
51st percentile
50%
Greater than 51st and less than 75th percentile
Straight line pro rata vesting between 50%
and 100%
75th percentile and above
100%
ROIC performance condition The percentage of LTI Rights subject to the ROIC performance condition that will be eligible for Vesting
(if any) at the end of the performance period of three years will be determined as follows:
Average ROIC over 3 years
% of LTI Rights that vest
Less than 8.5% Average ROIC
Nil
Equal to 8.5% Average ROIC
20%
Greater than 8.5% Average ROIC and less than 11%
Average ROIC
Straight line pro rata vesting between 20%
and 100%
11% of Average ROIC or greater
100%
The threshold targets are set at a level that the Board regards as attainable. The stretch targets are
set at a level that the Board regards as demonstrating clear outperformance. Full vesting occurs when
performance equals or exceeds stretch.
The Board also determined the number of FY24 LTI performance rights awarded was by use of the 30-day VWAP prior to 30 June,
consistent with the FY23 grant.
The table below shows the LTI details for each Executive for the financial year ended 30 June 2024:
Executive KMP
Grant date
Number of
performance
rights granted
Fair value on
grant date
Aggregate fair
value
Vesting and
exercise date
Performance
rights expiry
date
Dr Ian Kadish
29-Nov-23
248,970
1.25
310,652
30-Jun-26
30-Jun-27
Craig White
29-Nov-23
146,546
1.25
182,853
30-Jun-26
30-Jun-27
REMUNERATION REPORT
For year ended 30 June 2024
46
d. Cumulative interest of Executives under the LTI program
The LTI program is the key element of the ‘at risk component’ of the Executives’ remuneration. None of the performance rights vested
or lapsed during the reporting period, however following testing after financial year end, the FY21 performance rights lapsed.
Movements in performance rights held by Executives
The following table sets out the movement of performance rights held by each Executive and their related parties for each
respective grant.
Grant
Year
Grant Date
Opening
balance
Granted
during year
Vested
Lapsed
Balance at
end of year
(unvested)
Value yet
to be
expensed
Number
Number
Number
%
Number
%
Number
$
Dr Ian Kadish
FY24
29-Nov-23
-
248,970
-
0.0%
-
0.0%
248,970
109,879
FY23
4-Nov-22
241,591
-
-
0.0%
-
0.0%
241,591
154,155
FY22
5-Nov-21
157,371
-
-
0.0%
-
0.0%
157,371
-
FY21
31-Oct-20
184,616
-
-
0.0%
184,616
100.0%
-
-
Craig White
FY24
29-Nov-23
-
146,546
-
0.0%
-
0.0%
146,546
64,676
FY23
3-Nov-22
142,202
-
-
0.0%
-
0.0%
142,202
90,737
FY22
24-Jan-22
48,550
-
-
0.0%
-
0.0%
48,550
-
Paul McCrow
FY23
3-Nov-22
60,207
-
-
0.0%
-
0.0%
60,207
-
FY22
26-Aug-21
39,219
-
-
0.0%
-
0.0%
39,219
-
FY21
17-Aug-20
23,270
-
-
0.0%
23,270
100.0%
-
-
LTI Plan Target Summary
Diluted Operating earnings per share (diluted Operating EPS) tranche
LTI Plan
FY24
FY23
FY22
FY21
Beginning of period
01-Jul-23
01-Jul-22
01-Jul-21
01-Jul-20
End of period
30-Jun-26
30-Jun-25
30-Jun-25
30-Jun-24
Diluted operating EPS of at beginning of period
n/a
n/a
19.0
16.6
Threshold 5% CAGR
n/a
n/a
23.07
20.18
Stretch 12% CAGR
n/a
n/a
29.87
26.12
20% vesting hurdle (cumulative 3 year)1
35.00
35.00
n/a
n/a
100% vesting hurdle (cumulative 3 year)2
45.00
45.00
n/a
n/a
1. Nil LTI rights will vest if this threshold is not achieved.
2. LTI rights will vest on a straight-line pro rata basis between the 20% and 100% vesting hurdles.
Relative total shareholder return (TSR) tranche
LTI Plan
FY24
FY23
FY22
FY21
Beginning of period
01-Jul-23
01-Jul-22
01-Jul-21
01-Jul-20
End of period
30-Jun-26
30-Jun-25
30-Jun-25
30-Jun-24
20% LTI rights vesting hurdle1
50.0%
50.0%
n/a
n/a
100% LTI rights vesting hurdle2
100.0%
100.0%
n/a
n/a
1. Nil LTI rights will vest if this threshold is not achieved.
2. LTI rights will vest on a straight-line pro rata basis between the 20% and 100% vesting hurdles.
47
Integral Diagnostics
Annual Report 2024
Return on invested capital (ROIC) tranche
LTI Plan
FY24
FY23
FY22
FY21
Beginning of period
01-Jul-23
01-Jul-22
01-Jul-21
01-Jul-20
End of period
30-Jun-26
30-Jun-25
30-Jun-25
30-Jun-24
20% LTI rights vesting hurdle1
8.5%
8.5%
n/a
n/a
100% LTI rights vesting hurdle2
11.0%
11.0%
n/a
n/a
1. Nil LTI rights will vest if this threshold is not achieved.
2. LTI rights will vest on a straight-line pro rata basis between the 20% and 100% vesting hurdles.
FY25 remuneration
For FY25, the Board has determined an initial set of STI KPIs based on IDX’s budget and business on a standalone basis. However,
as disclosed in the Directors’ Report on 18 July 2024, the Company has announced an agreement to enter into a binding Merger
Implementation Deed to acquire 100% of Capitol Health Limited's ("Capitol") issued shares via a scheme of arrangement. The Board
has determined that should the Capitol merger proceed, performance against the year-to-date STI KPIs at the time of the merger
implementation will be measured to determine a pro rata STI outcome for this period. At this time, relevant adjusted STI KPIs will be
set for the balance of the year and will be measured at year end to determine performance for the second pro rata period. Should the
Capitol merger not proceed, then the STI will be determined on the initial STI KPIs set for the entire year.
Given the transformative opportunity for shareholders of the Capitol acquisition, the Board has also determined a one-off performance
measured remuneration opportunity for Executive KMP for FY25 should the merger proceed. The opportunity has specific KPIs focused
on achieving the financial and cultural integration of the Capitol business case, which forms the basis of the stated pro forma
double-digit EPS accretion for IDX shareholders. The maximum opportunity will not exceed 50% of the Executive KMP’s FY25 total fixed
remuneration (TFR) and any achievement will be a mix of cash and deferred equity. It has also been determined that the Executive
KMP’s FY25 TFR remains unchanged from FY24 levels.
With these exceptions the Executive Remuneration Framework in FY25 remains essentially the same as in FY24.
e. Executive Service Agreements
Remuneration arrangements for Executive KMP are formalised in employment agreements. Key conditions for Executive KMP are
outlined below:
Name
Agreement
Commenced
Agreement Expiry
Notice of Termination by Group
Employee Notice
Dr Ian Kadish
22 May 2017
No fixed date
Six months, or 12 months if change of control event
Six months
Craig White
24 January 2022
No fixed date
Six months
Six months
Other than those set out in this remuneration report, there are no further termination benefits offered to Executive KMP.
REMUNERATION REPORT
For year ended 30 June 2024
48
f. Non-Executive Director and Radiologist Executive Director Remuneration
Purusant to the Constitution, the Board determines the remuneration each Director is entitled to for his or her service as a Director.
However, the total aggregate amount provided to all NEDs for their services as Directors must not exceed in any financial year the
amount fixed by the Company in general meeting. This amount has been fixed at $1,000,000 since the Company's IPO in 2015. At our
2024 Annual General Meeting, the Company will proposes an increase to the NED fee pool to $1,300,000.
The Company's remuneration policy for NEDs aims to ensure that the Company can attract and retain suitably qualified and
experienced NEDs, and recognises the specific governance of this medical specialist company and the higher workload with four
independent NEDs.
Fees to NEDs reflect the demands and responsibilities of their role, the specialist nature of a diagnostic imaging business, and the
deliberate structure of our Board, which includes four independent NEDs. Two Radiologist Executive Directors employed as radiologists
also served on the Board during the financial year. All NEDs' fees are reviewed periodically by the PCRC. The PCRC may, from time to
time, receive advice from independent remuneration consultants to ensure NEDs' fees are appropriate and in line with the market.
The Chair's fees are determined independently from the fees of other NEDs, based on comparative roles in the external market
and the specific nature of the expertise and role for the Company. NEDs do not receive share options or other incentives and their
remuneration must not include a commission on, or a percentage of, operating revenue.
Radiologist Executive Directors’ remuneration arrangements
Dr Jacqueline Milne and Dr Nazar Bokani are deemed to be Radiologist Executive Directors as they are engaged as radiologists by the
Group. However, it is important to note that they do not report to the Chief Executive or the other Executives. The key terms of their
contracts are consistent with other radiologists and include remuneration at market rates plus allowances where appropriate. During
FY23 and until his resignation on 9 August 2023, Dr Bokani provided some of his radiology services through a related party Tele-Rad
Consultancy L.L.C-FZ, on terms consistent with other radiologists. Details of the related party transaction are detailed in Note 32 to the
financial statements.
In addition, they receive a Radiologist Executive Director Board fee, which is set by reference to the fees paid to the NEDs.
Non-Executive Director and Radiologist Executive Director Board fees for FY24
The following annual fees were paid to Radiologist Executive Directors, NEDs and the Chair for their services in FY24:
• for Radiologist Executive Directors (excluding the MD/CEO), $68,750;
• for NEDs, a base fee of $100,000;
• for committee members, a fee of $12,500 per committee, excluding the Nomination Committee;
• for committee chairs, a fee of $25,000; excluding the Nomination Committee;
and
• for the Chair, $250,000 (inclusive of all Committee Chair and Committee member roles).
All NEDs’ fees include superannuation where applicable.
49
Integral Diagnostics
Annual Report 2024
FY24 Non-Executive and Radiologist Executive Director statutory remuneration
Details of the statutory remuneration received by the Group’s NEDs and Radiologist Executive Directors for FY24 and the prior financial
year are set out in the following table.
Short-term benefits
Post employment
benefits
Long-term benefits
Cash salary and fees
$1
Super
$
Leave entitlements
$
Share based payments
$
Total remuneration
$
Non-Executive Directors
Toby Hall2
FY24
152,027
16,347
n/a
n/a
168,374
FY23
-
-
n/a
n/a
-
Raelene Murphy
FY24
126,604
13,926
n/a
n/a
140,530
FY23
124,434
13,066
n/a
n/a
137,500
Andrew Fay
FY24
123,874
13,626
n/a
n/a
137,500
FY23
119,250
12,521
n/a
n/a
131,771
Ingrid Player3
FY24
100,194
11,021
n/a
n/a
111,215
FY23
-
-
n/a
n/a
-
Helen Kurincic4
FY24
106,673
11,442
n/a
n/a
118,115
FY23
259,708
25,292
n/a
n/a
285,000
John Atkin5
FY24
19,806
2,292
n/a
n/a
22,098
FY23
130,967
6,533
n/a
n/a
137,500
Radiologist Executive Directors6,7
Dr Jacqueline Milne
FY24
1,094,731
27,399
27,009
n/a
1,149,139
FY23
987,060
25,292
37,685
n/a
1,050,037
Dr Nazar Bokani8
FY24
126,342
7,916
21,004
-
155,262
FY23
963,970
25,292
(70,637)
28,929
947,554
Total Director Fees and Remuneration for Non-Executive and Radiologist Executive Directors
FY24
1,850,251
103,969
48,013
-
2,002,233
FY23
2,585,389
107,996
(32,952)
28,929
2,689,362
1. Includes Executive Director fees and normal pay for the Company’s radiologist directors.
2. Toby Hall commenced KMP position on 28 September 2023.
3. Ingrid Player commenced KMP position on 29 August 2023.
4. Helen Kurincic ceased KMP position on 29 November 2023.
5. John Atkin ceased KMP position on 31 August 2023.
6. In FY24, Dr Bokani received director fees of $7,897 (FY23: $68,750) and Dr Milne received $68,750 (FY23: $68,750). With the exception of these director fees, all other remuneration received by Dr Bokani
and Dr Milne is consideration for their respective roles as radiologists and are on commercial terms commensurate with other radiologists within the Group.
7. Share based payments relate to reflect movements due to the Radiologist Loan Funded Share Plan for Executive Radiologist Directors.
8. Dr Nazar Bokani ceased KMP position on 09 August 2023.
REMUNERATION REPORT
For year ended 30 June 2024
50
FY24 Director Fees
Director Fees
$1
FY24
774,479
FY23
829,271
1. Director fees inclusive of superannuation.
FY24 Non-Executive Director and Radiologist Executive Director realised remuneration
Fixed remuneration
$
Super
$
Annual
leave entitlements
$
Total remuneration
$
Non-Executive Directors
Toby Hall1
FY24
152,027
16,347
-
168,374
FY23
-
-
-
-
Raelene Murphy
FY24
126,604
13,926
-
140,530
FY23
124,434
13,066
-
137,500
Andrew Fay
FY24
123,874
13,626
-
137,500
FY23
119,250
12,521
-
131,771
Ingrid Player2
FY24
100,194
11,021
-
111,215
FY23
-
-
-
-
Helen Kurincic3
FY24
106,673
11,442
-
118,115
FY23
259,708
25,292
-
285,000
John Atkin4
FY24
19,806
2,292
-
22,098
FY23
130,967
6,533
-
137,500
Radiologist Executive Directors
Dr Jacqueline Milne
FY24
1,094,731
27,399
15,913
1,138,043
FY23
987,060
25,292
10,187
1,022,539
Dr Nazar Bokani5
FY24
200,896
7,916
(6,567)
202,245
FY23
963,970
25,292
(85,204)
904,058
Total Director Fees and Realised Remuneration for Non-Executive and Radiologist Executive Directors
FY24
1,924,805
103,969
9,346
2,038,120
FY23
2,585,389
107,996
(75,017)
2,618,368
1. Toby Hall commenced KMP position on 28 September 2023.
2. Ingrid Player commenced KMP position on 29 August 2023.
3. Helen Kurincic ceased KMP position on 29 November 2023.
4. John Atkin ceased KMP position on 31 August 2023.
5. Dr Nazar Bokani ceased KMP position on 09 August 2023. Dr Bokani's realised fixed remuneration includes the cash payment of long service leave of $74,554.
51
Integral Diagnostics
Annual Report 2024
g. KMP Minimum Shareholding Policy and Shareholdings
Minimum shareholding policy
To ensure Board members and KMP are aligned with the interests of shareholders, from 1 July 2018 the Board introduced a Minimum
Shareholding Policy. It requires NEDs, Radiologist Executive Directors and other KMP to build and maintain a minimum shareholding
by the later of the fifth anniversary of the policy, or the fifth anniversary of the KMP's appointment. During the year this Policy was
reviewed, and amended to confirm the minimum shareholding can be satisfied either by the total actual amount invested, or by the
number of shares multiplied by the current share price.
KMP and Directors are required to meet a minimum shareholding equivalent as per the prescribed percentage of their total fixed
remuneration or annual director fees as outlined below:
• Managing Director and CEO
100%
• CFO
75%
• Other Executive KMP
50%
• Non-Executive Directors
100%
• Radiologist Executive Directors
100%
All KMP currently comply with the Minimum Shareholding Policy with the exception of Raelene Murphy. Ms Murphy is aiming to be
in compliance with this policy as soon as practicable, taking into account the provisions of related policies such as the Securities
Dealing Policy.
KMP shareholding
The number of shares in the Company held during the financial year, by each Director and other members of the KMP, including their
personal related parties, is set out below:
Balance at
1 July 2023
Additions
Disposals/other
Number of
shares held
upon ceasing to
be KMP
Balance at
30 June 2024
Non-Executive Directors
Toby Hall1
n/a.
151,719
-
-
151,719
Raelene Murphy
30,945
-
-
-
30,945
Andrew Fay
40,000
45,000
-
-
85,000
Ingrid Player2
n/a.
35,000
-
-
35,000
Helen Kurincic3
555,579
-
-
555,579
-
John Atkin4
187,526
-
-
187,526
-
Radiologist Executive Directors
Dr Jacqueline Milne
25,200
-
-
-
25,200
Dr Nazar Bokani5
277,716
-
-
277,716
-
Executive KMP
Dr Ian Kadish
539,441
20,000
-
-
559,441
Craig White
-
-
-
-
-
Paul McCrow
-
-
-
-
-
1. Toby Hall commenced KMP position on 28 September 2023.
2. Ingrid Player commenced KMP position on 29 August 2023.
3. Helen Kurincic ceased KMP position on 29 November 2023.
4. John Atkin ceased KMP position on 31 August 2023.
5. Dr Nazar Bokani ceased KMP position on 09 August 2023. Dr Bokani is a participant in the Radiologist Loan Share Scheme, under which 185,144 shares are subject to a limited recourse loan.
REMUNERATION REPORT
For year ended 30 June 2024
52
Minimum shareholding
100%
100%
55%
55%
100%
100%
62%
62%
98%
98%
100%
100%
0%
0%
Toby Hall
Raelene Murphy
Andrew Fay
Ingrid Player
Jacqueline Milne
Dr Ian Kadish
Craig White
0
10
20
30
40
50
60
70
80
90
100
110
Mr White and Ms Player do not currently have the required minimum shareholdings under the Minimum Shareholding Policy but are
not required to attain the minimum until, respectively, January 2027 and August 2028.
53
Integral Diagnostics
Annual Report 2024
h. Other Transactions with KMP and their Related Parties
The following transactions occurred with related parties to KMP:
Consolidated
$
%
interest
KMP interest
$
30 June 2024
Payment for teleradiology services to Tele-Rad Consultancy L.L.C-FZ of which
Dr Nazar Bokani is related
54,377
100%
54,377
The above FY24 related party transactions relate to teleradiology services provided to the Group by Dr Bokani and are on commercial
terms consistent with other teleradiology providers to the Group.
Financial Accommodation
Balance
9 August 2023
Balance
30 June 2023
Interest paid
and payable
Dr Nazar Bokani
446,614
446,614
-
The above loan relates to Dr Bokani’s participation in the Radiologist Loan Funded Share Plan (Loan Plan) in 2019, prior to his
appointment as a Director. The loan was made on an interest free basis to enable the purchase of shares in the Company. Shares
issued attaching to the loan are subject to a continued employment condition of four years. The loan can be repaid after the
employment condition is satisfied and any time up to 1 March 2029. The shares are subject to a holding lock until the loan is repaid.
The dividend streams relating to the loan-funded shares are allocated, net of tax, to the repayment of the loan. These terms and
conditions are consistent with those offered to other radiologists under the rules governing the Loan Plan.
Loans
No Executive KMP has entered into a loan made, guaranteed or secured, directly or indirectly, with or by the Company or any of its
subsidiaries during the reporting period.
The Remuneration Report has been audited.
REMUNERATION REPORT
For year ended 30 June 2024
54
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Auditor’s Independence Declaration
As lead auditor for the audit of Integral Diagnostics Limited for the year ended 30 June 2024, I declare
that to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Integral Diagnostics Limited and the entities it controlled during the
period.
Niamh Hussey
Melbourne
Partner
PricewaterhouseCoopers
27 August 2024
AUDITOR’S INDEPENDENCE DECLARATION
For year ended 30 June 2024
55
Integral Diagnostics
Annual Report 2024
$56.0M
Free Cash Flow
↑ 5.5% increase
$9.3M
Capex Invested
In growth initiatives
5.8 cents
Per Share
Fully Franked FY24 Dividend
$91.5M
Operating EBITDA
↑ 7.4% increase
$18.1M
Operating NPAT
↑ 1.3% increase
$469.7M
Revenue
↑ 6.6% increase
56
Financial Report
58
Consolidated Statement of Profit or Loss
59
Consolidated Statement of Comprehensive Income
60
Consolidated Statement of Financial Position
61
Consolidated Statement of Changes in Equity
62
Consolidated Statement of Cash Flows
63
Notes to the Consolidated Financial Statements
109 Consolidated Entity Disclosure Statement
111 Directors’ Declaration
112 Independent Auditor’s Report to the Members of
Integral Diagnostics Limited
117 Non-IFRS Financial Information
123 Shareholder Information
126 Corporate Directory
Note
30 June 2024
$’000
30 June 2023
$’000
Revenue
Revenue
5
469,697
440,762
Interest and other income
5
861
448
Total revenue and other income
470,558
441,210
Expenses
Consumables
6
(22,920)
(21,040)
Employee benefits expense
6
(294,289)
(276,607)
Depreciation expense
6
(27,888)
(25,459)
Amortisation expense
6
(18,974)
(18,027)
Transaction, restructuring and integration benefits/(expenses)
6
(2,918)
10,412
Share based payment expense
24
(1,589)
(2,540)
Equipment related expenses
(15,819)
(15,616)
Occupancy expenses
(9,926)
(7,769)
Technology expenses
(15,421)
(12,936)
Other general expenses
(20,703)
(22,302)
Impairment expense
(74,639)
-
Finance costs
6
(22,547)
(18,365)
Share of net losses of joint ventures accounted for using the equity method
16
(60)
(328)
Total expenses
(527,693)
(410,577)
(Loss)/profit before income tax expense
(57,135)
30,633
Income tax expense
7
(3,564)
(5,593)
(Loss)/profit for the year from continuing operations
(60,699)
25,040
(Loss)/profit is attributable to:
Owners of Integral Diagnostics Limited
(60,699)
25,040
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the year ended 30 June 2024
58
Note
30 June 2024
$’000
30 June 2023
$’000
(Loss)/profit for the year
(60,699)
25,040
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
87
1,017
Net (loss)/gain on cash flow hedges
-
-
Other comprehensive (loss)/income for the year, net of tax
(60,612)
26,057
Total comprehensive (loss)/income for the year
(60,612)
26,057
Total comprehensive income is attributable to:
Owners of Integral Diagnostics Limited
(60,612)
26,057
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2024
59
Integral Diagnostics
Annual Report 2024
Note
30 June 2024
$’000
30 June 2023
$’000
Assets
Current assets
Cash and cash equivalents
8
42,438
33,855
Trade and other receivables
9
24,491
21,690
Income tax receivable
328
96
Other assets
10
5,912
5,251
Inventory
11
1,651
1,848
Total current assets
74,820
62,740
Non-current assets
Property, plant and equipment
12
148,734
153,059
Right-of-use assets
13
121,648
129,397
Intangible assets
14
399,069
474,772
Deferred tax asset
15
-
3,806
Investments accounted for using the equity method
16
5
15
Total non-current assets
669,456
761,049
Total assets
744,276
823,789
Liabilities
Current liabilities
Trade and other payables
17
32,823
31,145
Borrowings
18
2,210
2,454
Lease liabilities
13
13,960
14,214
Contingent consideration
20
9,189
7,479
Provisions
19
27,501
27,375
Total current liabilities
85,683
82,667
Non-current liabilities
Contingent consideration
20
673
7,778
Borrowings
21
219,756
221,142
Lease liabilities
13
121,871
127,266
Deferred tax liability
15
3,834
2,367
Provisions
22
10,752
9,521
Total non-current liabilities
356,886
368,074
Total liabilities
442,569
450,741
Net assets
301,707
373,048
Equity
Contributed capital
23
335,001
333,280
Reserves
24
(8,329)
(9,788)
Retained profits
25
(24,965)
49,556
Total equity
301,707
373,048
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the year ended 30 June 2024
60
Contributed
capital
$’000
Reserves
$’000
Retained
profits
$’000
Total equity
$’000
Balance at 1 July 2022
322,543
(12,455)
37,156
347,244
Profit after income tax expense
-
-
25,040
25,040
Movement in translation of foreign operations
-
1,017
-
1,017
Total comprehensive income
-
1,017
25,040
26,057
Transactions with owners in their capacity as owners:
Issue of ordinary shares as consideration for a business combination, net
of transaction costs and tax (Note 23)
1,322
-
-
1,322
Issue of ordinary shares under Radiologist Incentive Scheme (Note 23)
9,023
-
-
9,023
Share based payments (Note 24)
-
1,650
-
1,650
Dividends paid and reinvested in equity (Note 26)
392
-
(12,640)
(12,248)
Balance at 30 June 2023
333,280
(9,788)
49,556
373,048
Contributed
capital
$’000
Reserves
$’000
Retained
profits
$’000
Total equity
$’000
Balance at 1 July 2023
333,280
(9,788)
49,556
373,048
(Loss)/profit after income tax expense
-
-
(60,699)
(60,698)
Movement in translation of foreign operations
-
87
-
87
Total comprehensive income
-
87
(60,699)
(60,611)
Transactions with owners in their capacity as owners:
Issue of ordinary shares under Radiologist Incentive Scheme (Note 23)
291
-
-
291
Issue of ordinary shares as consideration for a business combination, net
of transaction costs and tax (Note 23)
-
-
-
-
Share based payments (Note 24)
-
1,372
-
1,372
Acquisition of treasury shares by IDX Equity Trust
(87)
-
-
(87)
Dividends paid and reinvested in equity (Note 26)
1,517
-
(13,822)
(12,305)
Balance at 30 June 2024
335,001
(8,329)
(24,965)
301,708
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2024
61
Integral Diagnostics
Annual Report 2024
Note
30 June 2024
$’000
30 June 2023
$’000
Cash flows from operating activities
Receipts from customers
465,880
440,367
Payments to suppliers and employees
(378,077)
(349,757)
Transaction and integration costs relating to acquisition of subsidiaries
(2,102)
(3,976)
Interest and other finance costs paid
(22,115)
(17,814)
Interest received
861
448
Income taxes received/(paid)
1,712
(1,992)
Net cash from operating activities
36
66,159
67,276
Cash flows from investing activities
Payments for purchase of subsidiary, net of cash acquired
-
(84,813)
Payments in settlement of contingent consideration
20
(4,025)
(150)
Payments for property, plant and equipment
(23,878)
(43,995)
Net cash used in investing activities
(27,903)
(128,958)
Cash flows from financing activities
Proceeds from issue of share capital
23
1,721
2,203
Proceeds from borrowings drawn
-
43,049
Repayment of borrowings
(2,424)
(45,209)
Repayment of the principal element of lease liabilities
(14,929)
(14,978)
Dividends paid to Company shareholders
(13,822)
(12,640)
Net cash from financing activities
(29,454)
(27,575)
Net (decrease)/increase in cash and cash equivalents
8,802
(89,389)
Cash and cash equivalents at the beginning of the financial year
33,855
123,193
Effects of exchange rate changes on cash and cash equivalents
(219)
51
Cash and cash equivalents at the end of the financial year
8
42,438
33,855
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2024
62
Note 1. General information
The Financial Report covers Integral Diagnostics Limited as a Group consisting of Integral Diagnostics Limited (‘Company’ or ‘parent
entity’) and the entities it controlled at the end of, or during, the year (collectively referred to as the ‘Group’). The financial statements
are presented in Australian dollars, which is Integral Diagnostics Limited’s functional and presentation currency and are rounded to the
nearest thousand dollars ($‘000) unless otherwise stated.
Integral Diagnostics Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office
and principal place of business is:
Suite 9.02, Level 9, 45 William Street MELBOURNE VIC 3000
A description of the nature of the consolidated entity’s operations and its principal activities are included in the Directors’ Report, which
is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 27 August 2024. The Directors have
the power to amend and reissue the financial statements.
Note 2. Material accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective notes
or below.
Basis of preparation
These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001, as appropriate for
for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards (IFRSs) as issued
by the International Accounting Standards Board (IASB).
The financial report has been prepared on a going concern basis. While the Group is in a net current asset deficit position at 30 June
2024, the Group has sufficient operating cash flows and available debt facilities to pay its debts as and when they fall due for 12 months
from the date of signing these financial statements.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for derivative financial instruments which
have been measured at fair value.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary
information about the parent entity is disclosed in Note 33.
New, revised or amending accounting standards and interpretations adopted
The Group has adopted all new, revised or amended accounting standards and interpretations issued by the Australian Accounting
Standards Board (AASB) that are mandatory for the current reporting period. There is no material impact from the adoption of these
new standards.
Any new, revised or amending accounting standards or interpretations that are not yet mandatory have not been early adopted.
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Integral Diagnostics Limited as at
30 June 2024 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and can affect those returns through its power to direct the activities of
the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from
the date that control ceases.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
63
Integral Diagnostics
Annual Report 2024
Inter-Group transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Unrealised
losses are also eliminated, unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
Where the Group loses control over a subsidiary, it derecognises the assets (including goodwill), liabilities and non-controlling interest
in the subsidiary, together with any cumulative translation differences recognised in equity. The Group recognises the fair value of the
consideration received and the fair value of any investment retained, together with any gain or loss in profit or loss.
Joint arrangements
The Group’s interests in joint ventures are accounted for using the equity method, after initially being recognised at cost in the
consolidated balance sheet.
Current and non-current classification
Assets and liabilities are presented in the Consolidated Statement of Financial Position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in a normal operating
cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the
asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the
reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is expected to be settled in a normal operating cycle; it is held primarily for the purpose of
trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of
the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.
Foreign currencies
The Group’s consolidated financial statements are presented in Australian dollars, which is also the parent Company’s functional
currency. For each entity, the Group determines the functional currency and items included in the financial statements of each entity
are measured using that functional currency. The Group uses the direct method of consolidation and on disposal of a foreign operation,
the gain or loss that is reclassified to profit or loss reflects the amount that arises from using this method.
Transactions and balances
Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at the
date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at
the reporting date. Differences arising on settlement or translation of monetary items are recognised in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the
dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair
value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on
items whose fair value gain or loss is recognised in other comprehensive income (“OCI”) or profit or loss are also recognised in OCI or
profit or loss, respectively).
Group companies
On consolidation, the assets and liabilities of foreign operations are translated into Australian dollars at the rate of exchange prevailing
at the reporting date, and their statements of profit or loss are translated at average exchange rates for the period. The exchange
differences arising on translation for consolidation are recognised in OCI. On disposal of a foreign operation, the component of OCI
relating to that particular foreign operation is reclassified to profit or loss. Any goodwill arising on the acquisition of a foreign operation,
and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition, are treated as assets and
liabilities of the foreign operation and translated at the spot rate of exchange at the reporting date.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
64
Impairment of non-financial assets
Goodwill and other intangible assets that have indefinite useful lives are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-financial assets
are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s fair value, less costs of disposal and value-in-use. The value-in-use is the present value
of the estimated future cash flows relating to the asset, using a pre-tax discount rate specific to the asset or cash-generating unit to
which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.
Share-based payments
Employees of the Group (including senior management and radiologists), receive remuneration and benefits in the form of share-based
payments. These employees render services as consideration for equity instruments (equity-settled transactions).
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made, using an appropriate
valuation model.
That cost is recognised in expense, together with a corresponding increase in equity (share based payment reserves), over the period
in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense
recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period
has expired, and the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the
statement of profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of
that period.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards,
but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of equity instruments
that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached
to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions
are reflected in the fair value of an award and lead to an immediate expensing of an award, unless there are also service and/or
performance conditions.
No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have not
been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the
market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognised is the grant date fair value of the
unmodified award, provided the original vesting terms of the award are met. An additional expense, measured as at the date of
modification, is recognised for any modification that increases the total fair value of the share-based payment transaction, or is
otherwise beneficial to the employee. Where an award is cancelled by the entity or by the counterparty, any remaining element of the
fair value of the award is expensed immediately through profit or loss.
The dilutive effect of outstanding performance rights is reflected as additional share dilution in the computation of diluted earnings
per share.
The loan associated with loan-funded shares is non-recourse in nature and it is held off balance sheet and no corresponding amounts
held in equity for the issued shares. The cost of the loan is recorded in the income statement over the service period, with the
corresponding amount charged to equity. This equity value is recorded as share capital when the holder of the loan-funded shares
repays the loan in full, which is at their election in years 5 to 10 from grant date.
Investments and other financial assets
Classification
The Group classifies its financial assets at amortised cost.
65
Integral Diagnostics
Annual Report 2024
Financial assets at amortised cost
Loans and receivables are initially recognised at fair value and subsequently at amortised cost, using the effective interest rate method
less any allowance under the expected credit loss (ECL) model.
All loans and receivables with maturities greater than 12 months after the balance date are classified as non-current assets.
The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The Group uses
judgement when determining whether the credit risk of a financial asset has increased significantly since initial recognition and
when estimating ECL. The Group considers reasonable and supportable information that is relevant and available. This includes both
quantitative and qualitative information and analysis based on the Group’s historical experience and current market conditions, as well
as forward-looking estimates at the end of each reporting period.
Debts that are known to be uncollectable are written off when identified.
Revenue
Revenue from diagnostic imaging services is recognised on completion and reporting of imaging to the referring doctor. For diagnostic
imaging services provided under contract, revenue is recognised based on the actual service provided to the end of the reporting
period. This is determined based on the actual volume of exams reported.
Refer to note 5 for further details in relation to the point of revenue recognition for the Group’s specific revenue streams.
Property leases
Property leases are recognised as a right-of-use asset and a corresponding liability at the date at which the property is available for
use by the Group. Lease payments are allocated between the liability and finance cost. The finance cost is charged to profit or loss
over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The
corresponding right-of-use assets are depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Assets and liabilities arising from property leases are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
• fixed payments, less any lease incentives receivable;
• variable lease payments that are based on an index or a rate; and
• payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the Group’s incremental borrowing rate, being the rate that would be paid to borrow the
funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date less any lease incentives received;
• any initial direct costs, and
• restoration costs.
Payments associated with short-term leases are recognised on a straight-line basis as an expense in profit or loss. Short-term leases
are those with a lease term of 12 months or less.
Extension and termination options are included in most property leases across the group. These terms are used to maximise
operational flexibility in terms of managing contracts. Most extension and termination options held are exercisable only by the Group
and thus it has been assumed that these are to be exercised in the measurement of lease liabilities and right of use assets, as is
expected to be the case with future lease renewals.
Rounding of amounts
The Group is of a kind referred to in Legislative Instrument 2016/191, issued by the Australian Securities and Investments Commission,
relating to the ‘rounding off’. Amounts in this Report have been rounded off in accordance with this Instrument to the nearest thousand
dollars, or in certain cases, the nearest dollar.
New accounting standards and interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not
been early adopted by the Group for the annual reporting period ended 30 June 2024. None of these new standards and interpretations
are expected to have a material impact on the Group’s financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
66
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the
reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets,
liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical
experience and on other various factors, including expectations of future events, that are believed to be reasonable under the
circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements,
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities (refer to the respective notes) within the next financial year are discussed below.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and
equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some
other event.
The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically
obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.
Goodwill and other indefinite life intangible assets
The Group tests annually, or more frequently, if events or changes in circumstances indicate impairment, whether goodwill and other
indefinite life intangible assets have suffered any impairment, in accordance with the accounting policy stated in Note 14.
The recoverable amounts of cash-generating units have been determined based on value-in-use (VIU) calculations. These calculations
require the use of assumptions, including anticipated sales growth, long-term growth rate and the post-tax discount rate.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Group assessed impairment of non-financial assets, other than goodwill and other indefinite life intangible assets at, each
reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment. If an impairment
trigger exists, the recoverable amount of the asset is determined. This involves ViU calculations, in conjunction with the goodwill
impairment testing, which incorporates a number of key estimates and assumptions, including the continuation of the stable regulatory
environment and current competitive practices for healthcare services in both Australia and New Zealand.
Provision for make good
The Group records a provision for make good costs of lease properties. Make good costs are provided for at the present value of
expected costs to settle the obligation using estimated cash flows and are recognised as part of the cost of the relevant asset. The cash
flows are discounted at a current pre-tax rate that reflects the risks specific to the make good liability. The unwinding of the make good
is expensed as incurred and recognised in the statement of profit or loss. The estimated future costs of the make good are reviewed
annually and adjusted as appropriate. Changes in the estimated future costs, or in the discount rate applied, are added to or deducted
from the cost of the asset.
Business combination accounting
In applying business combination accounting to its acquisitions, the Group makes estimations of future cash flows and applies an
appropriate discount rate to measure identified assets, including brand names and customer contracts. The Group is also required
to estimate contingent considerations, involving the estimation of future earnings to be generated by the acquired business for a
defined period.
67
Integral Diagnostics
Annual Report 2024
Note 4. Operating segments
Identification of reportable operating segments
The Group comprises the single reportable operating segment of the operation of diagnostic imaging facilities.
Major customers
During the year ended 30 June 2024, there was no external revenue greater than 10% to any one customer (2023: nil).
Accounting policy for operating segments
Operating segments are presented using the ‘management approach’, where the information presented is on the same basis as the
internal reports provided to the Chief Operating Decision Makers (CODM), which includes the KMP of the Company. The CODM are
responsible for the allocation of resources to operating segments and assessing their performance.
Operating segment information
Revenue is attributable to the country where the service was transacted. The consolidated entity operates in two main geographical
areas, Australia and New Zealand.
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Total revenue and other income from continuing operations
Australia
412,652
386,287
New Zealand
57,906
54,923
470,558
441,210
Total non-current assets
Australia
588,039
590,610
New Zealand
81,417
185,661
669,456
776,271
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
68
Note 5. Revenue
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Sales revenue
Services revenue
469,697
440,099
Other revenue
Other revenue
-
663
Revenue
469,697
440,762
Interest and other income
Interest income
861
423
Other income
-
25
861
448
Total revenue and other income
470,558
441,210
Timing of revenue recognition
At a point in time
450,745
422,793
Over time
18,952
17,969
469,697
440,762
Accounting policy for revenue recognition
Revenue is recognised when the Group has fulfilled its contractual performance obligations to its customers. Revenue is measured
at the fair value of the consideration received or receivable, and except for specific customer contracts where service revenues are
recognised over time, revenue recognised is at a point in time.
Rendering of services
Rendering of services revenue is recognised when the service is rendered for the provision of medical imaging services. For some
specific customer contracts, service revenues are recognised over time on a straight-line basis, which reflects the contract requirement
for services to be delivered evenly over the term. All other service revenues are recognised at the time the images are read and
reported on.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established. Other revenue largely
includes compensation payments received under equipment and leasehold contracts, as well as labour cost charges to hospitals
and Government (trainees and paid parental leave).
69
Integral Diagnostics
Annual Report 2024
Note 6. Expenses
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Profit before income tax includes the following specific expenses:
Depreciation expense
Leasehold improvements
4,093
3,701
Plant and equipment
17,769
16,899
Motor vehicles
69
70
Office furniture and equipment
5,957
4,789
Total depreciation
27,888
25,459
Amortisation expense
Customer contracts
1,489
2,153
Right-of-use assets
17,485
15,874
Total amortisation
18,974
18,027
Total depreciation and amortisation
46,862
43,486
Net (gain)/loss on disposal of property, plant and equipment
(20)
17
Transaction, restructuring and integration costs relating to acquisition of subsidiaries
Remeasurement of contingent consideration liabilities
(1,337)
(15,839)
Professional fees, labour and other costs
4,255
5,427
Total transaction and integration costs
2,918
(10,412)
Finance costs
Interest and finance charges paid/payable
16,772
12,904
Interest and finances charges paid/payable - leases
5,541
5,391
Unwinding of the effect of discounting provisions
234
70
Finance costs expensed
22,547
18,365
Employee benefits expense
Employee benefits
237,075
228,905
Superannuation contributions
17,096
15,362
Labour supply
40,118
32,340
Total employee benefits expense
294,289
276,607
Costs of inventories recognised as expense were $22.9 million (2023: $21.0 million).
Accounting policy for finance costs
Borrowing costs are expensed in the period in which they are incurred. Amounts relating to the unwinding of discounting are classified
as finance costs.
Government grants
No amounts relating to government grants were recognised during the year (2023: nil).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
70
Note 7. Income tax expense
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Income tax expense
Current tax (benefit)/expense
(1,735)
5,464
Deferred tax – origination and reversal of temporary differences
5,273
129
Total income tax expense
3,538
5,593
Deferred tax included in income tax expense comprises:
Increase/(decrease) in deferred tax (Note 15)
5,273
129
5,273
129
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
(57,134)
30,633
Tax at the Australian statutory rate of 30% (2023: 30%)
(17,140)
9,190
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Entertainment costs
60
37
Transaction costs, including remeasurement of contingent consideration liabilities
56
(4,830)
Share based payments
275
664
Share of profits of joint ventures
18
122
Impairment
19,837
-
Other
195
-
3,301
5,183
Adjustment recognised for prior periods
(1,176)
457
Impact of lower corporate tax rate in New Zealand
1,439
(47)
Income tax expense
3,564
5,593
Accounting policy for income tax
The income tax expense or benefit for the period is the tax payable on that period’s taxable income, based on the applicable income tax
rate for each jurisdiction, adjusted for the changes in deferred tax assets and liabilities attributable to temporary differences, unused
tax losses and the adjustment recognised for prior periods, where applicable.
71
Integral Diagnostics
Annual Report 2024
Note 8. Current assets – cash and cash equivalents
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Cash on hand
25
22
Cash at bank
42,413
33,833
42,438
33,855
Accounting policy for cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts of cash, and that are
subject to an insignificant risk of changes in value.
Note 9. Current assets – trade and other receivables
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Trade receivables
25,160
21,998
Less: loss allowance
(683)
(499)
24,477
21,499
Other receivables
14
191
24,491
21,690
Impairment of receivables
Movements in the loss allowance for trade receivables are as follows:
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Opening balance
499
303
Additional allowance recognised
639
357
Receivables written off during the year as uncollectable
(455)
(161)
Closing balance
683
499
The ageing of receivables past due is as follows:
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Past due 31 to 60 days
4,977
2,858
Past due 61 to 90 days
2,452
932
Past due more than 91 days
4,037
3,052
11,466
6,842
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
72
Ageing of trade receivables has deteriorated during the financial year, however the Group has assessed the likelihood of recovery and
determined that the provision for impairment is appropriate and no further provision is required.
Accounting policy for trade and other receivables
Trade receivables are amounts due from customers for services rendered. They are generally due for settlement within 30 to 60
days and are therefore all classified as current. Trade receivables are initially recognised at the amount of consideration that is
unconditional. None of the Group’s trade receivables have a significant financing component. The Group holds these receivables to
collect the contractual cash flows and thus subsequently measures these at amortised cost, less any loss allowance. Due to the
short-term nature of these receivables, their carrying amount is assumed to approximate fair value. Cash flows relating to short-term
receivables are not discounted if the effect of discounting is immaterial.
The Group applies the simplified approach to measuring expected credit losses using a lifetime expected credit losses (ECL) allowance
for all trade receivables. The expected credit loss rates are based on the payment profile of sales in recent periods and historical
loss rates. The historical loss rates are adjusted to reflect current and forward looking information, on factors affecting the ability of
customers to settle the receivable, including an increased risk associated with collection of outstanding amounts based on additional
factors, such as probability of bankruptcy or financial reorganisation.
Other receivables are recognised at amortised cost, less any provision for impairment.
Note 10. Current assets – other
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Accrued income
2,357
2,092
Prepayments
3,323
2,778
Security deposits
232
381
5,912
5,251
Note 11. Inventory
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Contrast, drugs, needles and personal protective equipment
1,651
1,848
Accounting policy for inventory
Inventory is valued at the lower of cost and net realisable value. Inventory has been recognised based on categories of high-value
items used in the production of medical images that the Company holds in large volumes including contrast, drugs, needles and
personal protective equipment. Costs of inventories recognised as an expense was $22.9 million (2023: $21.0 million).
73
Integral Diagnostics
Annual Report 2024
Note 12. Non-current assets – property, plant and equipment
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Work in progress – at cost
3,173
3,004
Leasehold improvements – at cost
60,160
57,283
Less: Accumulated depreciation
(20,756)
(17,177)
39,404
40,106
Plant and equipment – at cost
174,901
163,651
Less: Accumulated depreciation
(89,106)
(71,451)
85,795
92,200
Motor vehicles – at cost
521
537
Less: Accumulated depreciation
(292)
(238)
229
299
Office furniture and equipment – at cost
40,016
31,391
Less: Accumulated depreciation
(19,883)
(13,941)
20,133
17,450
148,734
153,059
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
74
Reconciliations
Reconciliations of the written down values of property, plant and equipment at the beginning and end of the current and previous
financial year are set out below:
Work in
progress
Leasehold
improvements
Plant and
equipment
Motor Vehicles
Office furniture
and equipment
Total
Consolidated
$’000
$’000
$’000
$’000
$’000
$’000
Balance at 30 June 2022
8,124
33,026
70,590
164
12,348
124,252
Business combination
-
2,465
7,959
133
773
11,330
Additions
17,679
1,427
22,048
75
3,905
45,134
Transfers
(22,809)
6,884
10,601
-
5,324
-
Disposals/write offs
-
(31)
(2,171)
-
(96)
(2,298)
Depreciation expense
-
(3,701)
(16,899)
(70)
(4,789)
(25,459)
Exchange differences
10
36
72
(3)
(15)
100
Balance at 30 June 2023
3,004
40,106
92,200
299
17,450
153,059
Additions
14,759
344
7,266
-
1,518
23,887
Transfers
(14,581)
3,153
4,300
-
7,128
-
Disposals/write offs
-
(72)
(135)
(1)
-
(208)
Depreciation expense
-
(4,093)
(17,769)
(69)
(5,957)
(27,888)
Exchange differences
(9)
(34)
(67)
-
(6)
(116)
Balance at 30 June 2024
3,173
39,404
85,795
229
20,133
148,734
Property, plant and equipment secured under asset financing facility
Refer to Note 21 for further information on property, plant and equipment secured under asset financing.
Accounting policy for property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure
that is directly attributable to the acquisition of the items. Depreciation is calculated on a straight-line basis to write off the net cost of
each item of property, plant and equipment (excluding land) over their expected useful lives as follows:
• Leasehold improvements
5 – 25 years
• Plant and equipment
4 – 15 years
• Motor vehicles
5 – 8 years
• Office furniture and equipment
3 – 15 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets, whichever is
shorter, and include the expected future cost of making good leasehold premises at the conclusion of the lease term.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group.
Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Costs that are necessarily incurred while commissioning a new asset, in the period before they are capable of operating in the manner
intended by management, are capitalised as Work in Progress. Upon completion of the asset and all associated costs being recognised,
the Work in Progress is transferred to the correct property, plant and equipment classification, at which point it is accounted for in
accordance with the policy set out above.
75
Integral Diagnostics
Annual Report 2024
Note 13. Leases
The balance sheet shows the following amounts in respect of leases:
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Right-of-use assets
Property leases
121,648
129,397
Lease liabilities
Current
13,960
14,214
Non-current
121,871
127,266
135,831
141,480
Additions to the right-of-use assets during the year were $0.5m (2023: $31.9m, of which $20.9m was acquired through
business combinations).
The statement of profit or loss shows the following amounts relating to leases:
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Amortisation charge against right-of-use assets
17,485
15,874
Interest expense (included in finance cost)
5,539
5,311
(Benefit)/expense relating to short-term leases (included in occupancy expenses)
(170)
240
Reconciliation of movements in lease liabilities during the period
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Lease liabilities recognised at 1 July
141,480
117,939
Lease liabilities assumed on acquisition
-
20,909
Remeasurement of liability
10,675
5,258
Early termination of leases
(1,895)
(11,739)
New leases entered into during the period
520
23,696
Repayment of lease liabilities, net of interest
(14,929)
(14,978)
Exchange Rate
(20)
395
Lease liabilities recognised at 30 June
135,831
141,480
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
76
Note 14. Non-current assets – intangibles
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Goodwill – at cost
373,338
444,477
Brand names and trademarks – at cost
25,683
28,763
Customer contracts – at cost
17,578
17,625
Less: Accumulated amortisation
(17,530)
(16,093)
Customer contract - net
48
1,532
Total intangible assets
399,069
474,772
Reconciliations
Reconciliations of the written-down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Goodwill
$’000
Brand names &
trademarks
$'000
Customer
contracts
$’000
Total
$’000
Balance at 30 June 2022
352,462
25,546
2,479
380,487
Assets recognised on business combination acquisitions
89,305
3,042
1,175
93,522
Amortisation expense
-
-
(2,153)
(2,153)
Foreign currency conversion
2,710
175
31
2,916
Balance at 30 June 2023
444,477
28,763
1,532
474,772
Amortisation expense
-
-
(1,489)
(1,489)
Impairment expense
(71,598)
(3,042)
-
(74,640)
Foreign currency conversion
459
(38)
5
426
Balance at 30 June 2024
373,338
25,683
48
399,069
Reconciliations of the carrying values by cash generating unit are set out below:
Consolidated
Australia
$’000
New Zealand
$’000
Total
$’000
Goodwill
300,973
72,365
373,338
Brand names and trademarks
16,184
9,499
25,683
Customer contracts
48
-
48
Balance at 30 June 2024
317,205
81,864
399,069
77
Integral Diagnostics
Annual Report 2024
Impairment test for goodwill and intangibles
Goodwill and brand names are tested for impairment annually (as at 30 June) and when circumstances indicate the carrying value may
be impaired, and were last tested at 31 December 2023. The Group’s impairment test for goodwill and intangible assets with indefinite
lives is based on value-in-use calculations. An assessment of identifiable cash generating units and a review of allocations of goodwill
to the identified cash generating units is conducted annually.
Management has concluded that the current centralised structure of operations in Australia, and the ongoing synergies and
opportunities this delivers to the Group’s Australian operations, warrants the continued allocation of goodwill to form one cash-
generating unit in Australia, and a second cash generating unit in New Zealand for impairment testing purposes.
At 31 December 2023, the Group considered whether there were any impairment indicators that warranted impairment testing,
and for both cash generating units (CGU) in Australia and New Zealand, persistent cost inflation and a tight labour supply market
placing continued pressure on earnings margin were considered impairment indicators. The recoverable amount of the two CGUs was
determined based on value-in-use calculations using five-year forecasts, consistent with the methods used as at 30 June 2023, as
disclosed in Note 14 of the 2023 Annual Report.
As a result of this assessment, including the expected recovery in performance going forward, the impairment testing concluded:
• The recoverable amount is determined based on value-in-use calculations which require the use of assumptions to forecast future
cash flows;
• At 31 December 2023, the recoverable amount of the Australian CGU is estimated to exceed its carrying value by $317.9m; and
• The recoverable amount of the New Zealand CGU was estimated to be less than its carrying value, and as a result an impairment
loss of $71.5m has been recorded, which has reduced the carrying value of goodwill to $74.3m at 31 December 2023.
As the macroeconomic environment continues to stabilise after the COVID-19 pandemic, inflationary cost pressures and a tight labour
market for clinical practitioners continue to persist. The five-year compound annual revenue growth rate and long term earnings
margin assumption have been reassessed to reflect this slower recovery in operating conditions.
This impairment assessment was prepared again at 30 June 2024, as the impairment indicators identified at 31 December 2023 were
assessed to still apply. As a result of the 30 June 2024 assessment, the impairment testing concluded:
• The recoverable amount is determined based on value-in-use calculations, which require the use of assumptions to forecast future
cash flows;
• The recoverable amount of the Australian CGU at 30 June 2024 is estimated to exceed its carrying value by $321.3m; and
• The recoverable amount of the New Zealand CGU at 30 June 2024 is estimated to exceed its carrying value by $11.7m.
The timing of a return to target cost inflationary ranges in Australia and New Zealand and their impact on earnings margins remains
uncertain at this stage and will be continually monitored and acted upon appropriately.
Following a review of the brand portfolio for the Group, certain brands relating to the Peloton Group were indentified for retirement.
As part of the 30 June 2024 impairment assessment, the carrying value has been reduced to nil, and an impairment charge of $3.1m
recognised in the income statement.
Key assumptions for value-in-use calculations
Five-year compound annual revenue growth rate
The calculations use cash flow projections based on financial budgets approved by the Board. Cash flows beyond the five-year period
are extrapolated using the estimated growth rates stated below. These growth rates are consistent with the long-term strategic growth
forecasts for the Group, and assume a continuation of the stable regulatory environment for healthcare services in both Australia and
New Zealand.
Long term growth rate
The long term growth rate has been assessed to reflect macroeconomic and inflationary conditions in the Australian and New
Zealand markets, with the rate used to calculate the terminal value for both the Australian and New Zealand value-in-use calculations
remaining consistent with prior period assumptions.
Long term earnings margin
The long term earnings margin used to calculate the terminal value for both the Australian and New Zealand value-in-use calculations
is based on financial budgets approved by the Board, extrapolated for the five-year compound annual growth rate for revenue and
estimated cost inflation. This margin is consistent with the long-term strategic growth forecasts for the Group.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
78
Pre-tax discount rate
The pre-tax discount rate has been assessed with input from independent experts to reflect the current weighted average cost of
capital for the Group.
Regulatory environment
The calculations assume the continuation of a stable regulatory environment for healthcare services in Australia and New Zealand.
Key assumption sensitivities
The value-in-use calculations have been assessed for the sensitivities of the key assumptions. The following table outlines the impact
on the assessed value-in-use, following a reasonable possible change in the key assumptions:
Current
Assumption
Reasonable
change in
assumption
Impact of
change on
value-in-use
$000s
Impact of
change on
value-in-use
%
Australia
Five year compound growth rate
6.5%
(0.5%)
(127,000)
(39.5%)
Long-term growth rate
2.5%
(0.5%)
(31,000)
(9.6%)
Long-term earnings margin
22.8%
(2.5%)
(99,000)
(30.8%)
Pre-tax discount rate
11.5%
1.0%
(85,000)
(26.5%)
New Zealand
Five year compound growth rate
5.3%
(0.5%)
(14,000)
(119.9%)
Long-term growth rate
2.5%
(0.5%)
(4,000)
(34.3%)
Long-term earnings margin
30.0%
(2.5%)
(10,000)
(85.6%)
Pre-tax discount rate
13.6%
1.0%
(11,000)
(94.2%)
79
Integral Diagnostics
Annual Report 2024
Accounting policy for intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the
date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not
amortised and are subsequently measured at cost less an impairment. Finite life intangible assets are subsequently measured at cost
less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition of intangible
assets are measured as the difference between net disposal proceeds and the carrying amount of the intangible asset. The method of
amortisation and useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption or
useful life are accounted for prospectively by changing the amortisation method or period.
Goodwill
Goodwill arises on the acquisition of a business and is not amortised. Instead, Goodwill is tested annually for impairment, or more
frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment
losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Brand names and trademarks
Significant costs associated with brand names and trademarks are not amortised, but are tested for impairment annually on the same
basis and within the same ViU calculation as outlined above and are carried at cost.
Customer Contracts
Customer contracts acquired in a business combination are amortised on a straight-line basis over the period of their expected benefit,
being the remaining term of the contract as at the date of acquisition.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
80
Note 15. Deferred tax
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Deferred tax assets
Deferred tax asset comprises temporary differences attributable to:
Employee benefits and other provisions
10,883
13,005
Provisions for lease make good
1,251
1,237
Transaction costs in equity
-
745
Transaction costs
1,032
433
Tax losses available
906
5
Leases
4,266
3,603
Total deferred tax asset
18,338
19,028
Set-off of deferred tax liabilities pursuant to set-off provisions
(18,338)
(15,222)
Net deferred tax assets
-
3,806
Amount expected to be recovered within 12 months
5,878
5,645
Amount expected to be recovered after more than 12 months
12,460
13,383
18,338
19,028
Movements:
Opening balance
19,028
17,252
Credited to profit or loss (Note 7)
(690)
931
Additions through business combinations
-
845
Closing balance
18,338
19,028
81
Integral Diagnostics
Annual Report 2024
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Deferred tax liabilities
Deferred tax liability comprises temporary differences attributable to:
Amounts recognised in profit or loss
Property, plant and equipment
(14,643)
(8,705)
Brand names and customer contracts
(7,529)
(8,884)
Total deferred tax liabilities
(22,172)
(17,589)
Set-off of deferred tax liabilities pursuant to set-off provisions
18,338
15,222
Net deferred tax liabilities
(3,834)
(2,367)
Amount expected to be settled within 12 months
(1,464)
(871)
Amount expected to be settled after more than 12 months
(20,708)
(16,718)
(22,172)
(17,589)
Movements:
Opening balance
(17,589)
(14,226)
Credited to profit or loss (Note 7)
(4,583)
(1,060)
Additions through business combinations
-
(2,303)
Closing balance
(22,172)
(17,589)
Accounting policy for deferred tax
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are
recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
• when the deferred income tax asset or liability arises from the initial recognition of Goodwill or an asset or liability in a transaction
that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or
• when the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of
the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets
recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to
be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable
profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current
tax liabilities and deferred assets against deferred tax liabilities; and they relate to the same taxable authority on either the same
taxable entity or different taxable entities which intend to settle simultaneously.
Integral Diagnostics Limited (the ‘head entity’) and its wholly owned Australian subsidiaries have formed an income tax-consolidated
group under the tax consolidation regime. The head entity and each subsidiary in the tax-consolidated group continue to account for
their own current and deferred tax amounts. The tax-consolidated group has applied the ‘separate taxpayer within group’ approach in
determining the appropriate amount of taxes to allocate to members of the tax-consolidated group. In addition to its own current and
deferred tax amounts, the head entity also recognises the current tax liabilities (or assets) and the deferred tax assets arising from
unused tax losses and unused tax credits assumed from each subsidiary in the tax-consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable
from, or payable to, other entities in the tax-consolidated group. The tax consolidated group has a tax sharing agreement in place
to limit the liability of subsidiaries in the tax-consolidated group, arising under the joint and several liability provisions of the tax
consolidation system, in the event of default by the head entity to meet its payment obligations.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
82
Note 16. Interests in other entities
Interests in joint ventures
Set out below are the joint ventures of the Group as at 30 June 2024. The entities listed below have share capital consisting solely
of ordinary shares, which are held directly by the Group. The country of incorporation or registration is also their principal place of
business, and the proportion of ownership interest is the same as the proportion of voting rights held.
Ownership interest
Carrying amount
Name of joint venture
Place of
incorporation
2024
%
2023
%
Measurement
method
2024
$'000
2023
$'000
MedX
Australia
50%
50%
Equity method
5
15
Ascot at Maranui1
New Zealand
0%
100%
Equity method
-
-
1. The remaining share capital in this entity was acquired during the year and is now consolidated.
Summarised financial information for joint ventures
The table below summarises the financial information for those joint ventures of the group accounted for using the equity method.
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Aggregate carrying amount of individual immaterial joint ventures
5
15
Aggregate share of amounts of the group’s share of:
Profit/(loss) from continuing operations
(60)
(328)
Total comprehensive income
(60)
(328)
Note 17. Current liabilities – trade and other payables
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Trade payables
10,176
10,408
Other payables and accruals
22,647
20,737
32,823
31,145
Refer to Note 27 for further information on financial liabilities.
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid.
They are recognised at their fair value. The amounts are unsecured and are usually paid within 30 days of recognition. Due to the
short-term nature of these payables, their carrying amount is assumed to approximate fair value.
Note 18. Current liabilities – borrowings
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Asset financing facility
2,210
2,454
Refer to Note 21 for accounting policy on borrowings and further information on assets pledged as security and financing
arrangements and Note 27 for further information on financial risk management.
83
Integral Diagnostics
Annual Report 2024
Note 19. Current liabilities – provisions
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Annual leave
19,212
18,461
Long service leave
7,526
8,501
Employee benefits
236
312
Lease make good
527
101
27,501
27,375
Accounting policy for short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave, and long service leave expected to be settled within
12 months of the reporting date, are measured at the amounts expected to be paid when the liabilities are settled.
The leave obligations cover the Group’s liability for long service leave, annual leave and rostered days off. The current provision of this
liability includes all accrued annual leave, the unconditional entitlements to long service leave where employees have completed the
required period of service, and also where employees are entitled to pro-rata payments in certain circumstances.
Note 20. Contingent consideration
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Current portion
9,189
7,479
Non-current portion
673
7,778
9,862
15,257
The movements in each element of contingent consideration during the financial are set out below:
Consolidated
Total
$’000
Carrying amount at the start of the year
15,257
Remeasurements charged through profit or loss
(1,329)
Foreign exchange differences
(41)
Amounts paid during the year
(4,025)
Balance at 30 June 2024
9,862
Contingent consideration
Contingent consideration arises from contractual commitments entered into on the acquisition of businesses. Where contingent
consideration payments are significantly linked to requirements for ongoing employment, the cost of the deferred payment is charged
to profit or loss as earnt. Where contingent consideration is linked to the enterprise value of the entity acquired, and each vendor is
entitled to the payment of the earn-out regardless of their employment status, the amounts are recognised in goodwill as part of the
business combination accounting and based on expectation of payment. Any increment or decrement arising from remeasurement of
these liabilities is charged to profit or loss.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
84
For the year ended 30 June 2024, $2.9m of contingent consideration was paid out relating to the first earn-out period for Peloton
Radiology, and additional $0.6m in deferred consideration linked to service conditions. The conditions of the second earn-out contingent
consideration provision relating to Peloton Radiology were deemed not to have been met and the provision was reduced to nil, with the
movement recognised in the income statement.
Deferred consideration of $0.5m linked to service conditions was paid relating to the X-Ray Group for the year ended 30 June 2024,
with a further $0.3m recgonised in the income statement.
The contingent consideration provision for the potential second earn-out payment relating to the acquisition of Horizon Radiology was
reassessed from $1.4m to $0.5m, with the difference recognised in the income statement.
The contingent consideration provision for the Imaging Queensland Group has not changed for the year ended 30 June 2024. The
Group has made efforts to settle the $2.2m liability for Earn-out A, based on the valuation provided by an independent expert, however
the vendors have declined settlement, and the matter remains in dispute at the date of this report. The provision for Earn-out B liability
remains unchanged at $5.5m.
Note 21. Non-current liabilities – borrowings
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Debt facility
219,756
218,952
Asset financing facility
-
2,190
219,756
221,142
The fair values of these borrowings are not materially different from their carrying amounts, as the interest payable on those
borrowings reflects either current market rates or, that the borrowings are of a short-term nature.
Refer to Note 27 for further information on financial risk management.
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Debt facility
219,756
218,952
Asset financing facility
2,210
4,644
221,966
223,596
Assets pledged as security
The asset finance liabilities are effectively secured, as the financiers have rights to the assets under finance in the event of default.
Under the club debt facility, the financiers have security over the cash flows of the business.
85
Integral Diagnostics
Annual Report 2024
Financial arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Total facilities
Asset finance facility
55,500
55,500
Cash advance facility
290,118
316,017
Standby letter of credit or guarantee facility
7,236
7,000
Commercial cards facility
870
881
353,724
379,398
Used at the reporting date
Asset finance facility
2,210
4,643
Cash advance facility
219,757
218,952
Standby letter of credit or guarantee facility
3,232
3,296
Commercial cards facility
-
148
225,199
227,039
Unused at the reporting date
Asset finance facility
53,290
50,857
Cash advance facility
70,360
97,065
Standby letter of credit or guarantee facility
4,005
3,704
Commercial cards facility
870
733
128,525
152,359
Accounting policy for borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs incurred. They
are subsequently measured at amortised cost using the effective interest method. During the year, the terms of the Group’s facilities
were renegotiated with the lenders. There were no substantial changes to the terms of the agreement. Under the current lending
arrangement the cash advance facilities expire in February 2026.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
86
Note 22. Non-current liabilities – provisions
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Long service leave
6,369
4,681
Lease make good
4,383
4,840
10,752
9,521
Lease make good
The provision represents the present value of the estimated costs to make good the premises leased by the Group at the end of
the respective lease terms. Property lease agreements include various obligations at the end of the respective lease terms, such as
removal of tenant installations and making good any damage caused by installation or removal, removing signage, and other general
maintenance obligations (e.g. painting, cleaning). These costs and the probability of lease renewals have been estimated for each
location, based on specific terms of individual leases, size of the individual sites, and historical experience of costs incurred when
vacating a site.
Movements in provisions
Movements in each class of provision during the financial year, other than employee benefits (current and non-current), are set
out below:
Lease
make good
$’000
Consolidated – 2024
Carrying amount at the start of the year
4,941
Additions for new leases
34
Remeasurements offset against make-good asset
(123)
Remeasurements charged through profit or loss
(0)
Interest credited to provision
234
Amounts used
(176)
Carrying amount at the end of the year
4,910
Accounting policy for provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is probable
the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount
recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking
into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted
using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of time is recognised as a
finance cost.
Accounting policy for other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured as
the present value of expected future payments to be made, in respect of services provided by employees up to the reporting date using
the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures
and periods of service. Expected future payments are discounted using market yields at the reporting date on corporate bonds with
terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
87
Integral Diagnostics
Annual Report 2024
23. Equity – contributed capital
Consolidated
Consolidated
30 June 2024
#
30 June 2023
#
30 June 2024
$’000
30 June 2023
$’000
Ordinary shares – fully paid
233,961,997
233,029,358
335,088
333,280
Treasury shares - fully paid
(46,187)
-
(87)
-
233,915,810
233,029,358
335,001
333,280
Movement in ordinary share capital
Date
Number of
Shares
Issue Price
Total $’000
Balances at 1 July 2022
229,070,797
322,543
Shares issued as consideration as part of Horizon
Radiology acquisition
1 July
463,635
3.90
1,810
Shares issued as consideration as part of Peloton
Radiology acquisition
1 July
2,096,657
3.44
7,213
Shares issued under Radiologist Loan & Option Share Scheme
– Self-funded
5 September
439,010
3.02
1,322
Shares issued under Radiologist Loan Share Scheme1 –
Loan Shares
5 September
815,066
-
-
Shares issued under dividend reinvestment plan (DRP)
5 October
73,386
2.68
196
Shares issued under dividend reinvestment plan (DRP)
4 April
70,807
2.77
196
Balance at 30 June 2023
233,029,358
333,280
Shares issued under Radiologist Loan & Option Share Scheme
– Self-funded
6 September
96,349
3.02
291
Shares issued under Radiologist Loan Share Scheme1 –
Loan Shares
6 September
192,698
-
-
Shares issued under dividend reinvestment plan (DRP)
4 October
151,564
2.93
444
Acquisition of treasury shares by IDX Equity Trust
12 December
(46,187)
1.87
(87)
Shares issued under dividend reinvestment plan (DRP)
2 April
492,028
2.18
1,073
Balance at 30 June 2024
233,915,810
335,001
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the
number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does not have a
limited amount of authorised capital.
On a show of hands, every member present at a meeting in person or by proxy shall have one vote, and on a poll one vote for each
fully paid ordinary share held.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
88
Capital risk management
The Group’s objective when managing capital is to safeguard its ability to continue as a going concern to provide returns for
shareholders and benefits for other stakeholders, and to maintain an optimum capital structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the Consolidated Statement of Financial Position, plus net debt. Net debt is
calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, adjustments may be made to the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt. The Group has also initiated a dividend reinvestment plan
(DRP) during the previous year, to allow its shareholders to reinvest their dividends into additional share capital.
The Group looks to raise capital when an opportunity to invest in a business or company is seen as value-adding, relative to the current
company’s share price at the time of the investment.
The Group is subject to certain financing arrangement covenants and meeting these is given priority in all capital risk management
decisions. Under the terms of the major borrowing facilities, the Group is required to comply with the following financial covenants;
• net debt to pre-AASB 16 EBITDA not greater than 3.5; and
• fixed charge cover greater than 1.75.
The Group has complied with the covenants throughout the reporting period. The calculation basis provided for in the terms to the
Group’s borrowing facilities allows for the exclusion of the impacts of AASB 16 Leases, and the adoption of AASB 16 Leases has not
impacted compliance with these financial covenants.
Accounting policy for contributed capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from
the proceeds.
89
Integral Diagnostics
Annual Report 2024
Note 24. Equity – reserves
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Share-based payments reserve
5,462
4,090
Capital reorganisation reserve
(3,849)
(3,849)
Transactions with non-controlling interest
(8,013)
(8,013)
Foreign currency translation reserve
(1,929)
(2,016)
(8,329)
(9,788)
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees as part of their remuneration, and as part of their
compensation for services.
Capital reorganisation reserve
The reserve is used to account for historical capital reorganisation of Lake Imaging Pty Ltd, whereby the assets and liabilities of the
acquired party are recorded at their previous book values and no Goodwill is recognised. Any difference between the cost of the
transaction and the carrying amount of the assets and liabilities are recorded directly in this reserve.
Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entities are taken to the foreign currency translation reserve, as
described in Note 2. The reserve is recognised in profit and loss when the net investment is disposed of.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
90
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Share-based
payment
reserve
$'000
Capital re-
organisation
reserve
$'000
Transaction
with non-
controlling
interest
$'000
Foreign
currency
translation
reserve
$'000
Total
$'000
Balance at 1 July 2022
2,440
(3,849)
(8,013)
(3,033)
(12,455)
Issuance of shares held in escrow
(563)
-
-
-
(563)
Recognition of share-based payments
2,213
-
-
-
2,213
Movement in translation of foreign operations
-
-
-
1,017
1,017
Balance at 30 June 2023
4,090
(3,849)
(8,013)
(2,016)
(9,788)
Issuance of shares held in escrow
-
-
-
-
-
Recognition of share-based payments
1,372
-
-
-
1,372
Movement in translation of foreign operations
-
-
-
87
87
Balance at 30 June 2024
5,462
(3,849)
(8,013)
(1,929)
(8,329)
The expense recognised for share based payments during the year was based on valuations using the Black-Scholes model.
30 June 2024
$’000
30 June 2023
$’000
Amount recognised in share based payment expense:
Share based payment expense - Management LTI Plan
-
408
Share based payment expense - Radiologist Loan Funded Share Plan (LFSP)
999
1,444
999
1,852
Amount recognised in employee benefits expense:
Share-based payment expense – Management STI Plan
218
327
Share-based payment expense – Management LTI Plan
372
361
Total share based payment expense
1,589
2,540
There were no cancellations or modifications to the awards in 2024 or 2023.
91
Integral Diagnostics
Annual Report 2024
Valuation of equity-settled awards
The fair values of equity-settled awards such as performance rights under the Management Long Term Incentive (LTI) scheme, and
shares and options granted under the Radiologist Loan Funded Share & Option Plan (LFSP) were estimated using a Monte Carlo
simulation methodology and Black-Scholes option pricing technique, and consider the following:
• exercise price;
• expected life of the award;
• current market price of the underlying shares;
• expected volatility using an analysis of historic volatility over different rolling periods;
• expected dividends;
• the risk-free interest rate, which is an applicable government bond rate; and
• market-based performance hurdles (relative TSR).
Long term incentive (LTI) plan
The following table illustrates the number of, and movements in, performance rights issued under the LTI plan to executives and
members of the senior management team during the year. The exercise price of these rights is $nil.
Under the plan, performance rights granted prior to FY23 only vest with an equity settlement if an EPS growth hurdle and a four-year
service condition are met. Performance rights granted in FY23 or later only vest if an cumulative EPS hurdle (50% of rights granted),
relative TSR hurdle (25% of rights granted) or return on invested capital (ROIC) hurdle (25% of rights granted) are met respectively. All
performance rights granted in FY23 or later are also subject to a three year service condition.
Participation in the plan is at the Board’s discretion and no individual has a contractual right to participate in the plan or to receive any
guaranteed benefits.
2024
Number
2023
Number
Outstanding at 1 July
1,377,523
1,656,384
Granted during the year
729,476
732,581
Lapsed / forfeited during the year
(385,540)
(1,011,442)
Converted to ordinary shares during the year
-
-
Expired during the year
-
-
Outstanding at 30 June
1,721,459
1,377,523
Exercisable at 30 June
-
-
The following table lists the inputs to the valuation model used for the LTI plan. In FY24 the LTI plan was granted to members of the
Senior Management Team and the Senior Leadership Team and the CEO on 29 November 2023. The valuation metrics applicable to
each LTI grant are set out below:
2024
LTI Plan
2023
LTI Plan
2022
LTI Plan
2021
LTI Plan
Weighted average fair values at the measurement date ($)
1.25
2.23
4.90/4.53
3.35/3.75
Dividend yield (%)
3.61
3.42
2.50
3.00
Expected volatility (%)
40.00
40.00
N/A
N/A
Risk-free interest rate (%)
4.00
3.25
0.59/1.37
0.27/0.13
Expected life of share (years)
2.59
2.70
4.00
4.00
Weighted average share price ($)
1.72
2.75
5.39/4.96
3.91
Model used
Black-Scholes
Black-Scholes
Black-Scholes
Black-Scholes
The fair value at grant date of equity-settled share awards is recognised in the income statement over the period for which the benefits
of employee services are expected to be derived. Where awards are forfeited because non-market-based vesting conditions are not
met, the expense previously recognised is reversed proportionately.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
92
Radiologist Loan Funded Share & Option Plan (LFSP)
The following tables the number of, and movements in, shares and options issued under the Radiologist Loan Funded Share Plan
(LFSP). The allocated value of the shares issued to participating radiologists under the plan on 6 September 2023 was $3.19 and
a loan equivalent to the issued shares is due and payable at the Radiologist's option. This option can be exercised between 4-10
years from the issue date, once the loan is fully paid the loan shares are released from Escrow and will no longer be subject to
Escrow restrictions.
Options were issued in lieu of loan shares to the Group’s New Zealand resident radiologists. These options were issued with a strike
price of $3.36 and an expiry date of 6 September 2033.
Options
WAEP1
Shares
WAEP1
Outstanding at 1 July 2022
860,388
3.32
2,712,412
3.35
Granted during the year
62,954
3.02
815,066
4.96
Forfeited during the year
-
-
(55,418)
-
Exercised during the year
-
-
-
-
Outstanding at 30 June 2023
923,342
3.30
3,472,060
3.33
Granted during the year
-
3.19
192,698
3.19
Forfeited during the year
(15,352)
-
(48,822)
-
Exercised during the year
-
-
-
-
Outstanding at 30 June 2024
907,990
3.36
3,615,936
3.36
Exercisable at 30 June
-
-
-
-
1. Weighted average exercise price (WAEP)
The following table lists the inputs to the models used for the LFSP.
2024
LFSP Options
2024
LSFP Shares
2023
LFSP Options
2023
LSFP Shares
Grant Date
28 June 2023
28 June 2023
27 June 2022
27 June 2022
Weighted average fair values at the measurement date ($)
1.14
1.61
1.00
1.47
Dividend yield (%)
N/A
N/A
N/A
N/A
Expected volatility (%)
40.00
40.00
40.00
40.00
Risk-free interest rate (%)
3.74
3.78
3.40
3.67
Expected life of instrument (years)
4.19
7.19
4.19
7.19
Weighted average share price ($)
3.19
3.19
3.02
3.02
Model used
Black-Scholes
Black-Scholes
Black-Scholes
Black-Scholes
Note 25. Equity – retained profits
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Retained profits at the beginning of the financial year
49,556
37,156
Profit after income tax expense for the year
(60,699)
25,040
Dividend paid (Note 26)
(13,822)
(12,640)
Retained profits at the end of the financial year
(24,965)
49,556
93
Integral Diagnostics
Annual Report 2024
Note 26. Equity – dividends
Dividends
Full franked dividends paid during the financial year were as follows:
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Dividend paid 3.0 cents per share on 5 October 2022
-
6,885
Dividend paid 2.5 cents per share on 4 April 2023
-
5,755
Dividend paid 3.5 cents per share on 4 October 2023
8,060
-
Dividend paid 2.5 cents per share on 2 April 2024
5,762
-
13,822
12,640
Franking credits
Consolidated
30 June 2024
$’000
30 June 2023
$’000
Franking credits available for subsequent financial years based on a tax rate of 30%
23,244
34,793
The amount recorded above as the franking credit amount is based on the amount of Australian income tax paid in respect of the
liability for income tax at the balance date.
Accounting policy for dividends
Dividends are recognised when declared during the financial year and payment is no longer at the discretion of the Company.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
94
Note 27. Financial risk management
Financial risk management objectives
The Group’s activities expose it to a variety of financial risks:
• market risk (including interest rate and foreign exchange risk);
• credit risk; and
• liquidity risk.
The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the financial performance of the Group. The Group uses different methods to measure different types of risk to
which it is exposed. These methods include sensitivity analysis in the case of interest rate and foreign currency risks and ageing
analysis for credit risk.
Risk management is carried out by management under policies approved by the Board of Directors (‘the Board’). These policies include
identification and analysis of the risk exposure of the Group, and appropriate procedures, controls and risk limits. Finance reports to
the Board on a monthly basis.
Market risk
Interest rate risk
The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to interest rate
risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk.
As at the reporting date, the Group had the following interest-bearing financial assets and liabilities:
2024
2023
Consolidated
Weighted
average
interest rate
%
Balance
$'000
Weighted
average
interest rate
%
Balance
$'000
Cash at bank and on deposit
3.52%
42,518
1.12%
33,833
Club debt facility
7.03%
(219,756)
5.45%
(218,952)
Asset finance facility
2.50%
(2,210)
2.50%
(4,643)
Net exposure to cash flow interest rate risk
(179,448)
(189,762)
An analysis by remaining contractual maturities is shown in ‘liquidity and interest rate risk management’ below.
If interest rates were to increase/decrease by 100 (2023: 100) basis points from rates used to determine fair values as at the reporting
date, assuming all other variables that might impact on fair value remain constant, then the impact on profit for the year and equity is
as follows:
Basis points increase effect on
Basis points decrease effect on
Basis points
change
(Loss)/profit
before tax
$’000
Effect on equity
post tax
$’000
Basis points
change
Profit/(loss)
before tax
$’000
Effect on equity
post tax
$’000
2024
100
(2,231)
(1,561)
(100)
2,231
1,561
2023
100
2,211
1,548
(100)
(2,211)
(1,548)
95
Integral Diagnostics
Annual Report 2024
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows on an exposure will fluctuate because of changes in foreign
exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating
activities (when revenue or expense is denominated in a foreign currency) and the Group’s net investments in foreign subsidiaries.
The Group operates internationally and is exposed to foreign exchange risk arising from currency exposures to the New Zealand dollar
(NZD). The Group manages its exposure to fluctuations on the translation into Australian dollars of its foreign operations by holding net
borrowings in foreign currencies, creating a natural hedging relationship. The Group assessed the remaining risk exposure and given
the exchange rate is not expected to fluctuate significantly, has not entered into other hedging relationships. The Group will monitor
this risk on an ongoing basis.
Foreign Currency Sensitivity
Change in NZD
Rate
Effect on profit
post tax
$'000
Effect on equity
$'000
2024
+2.5c
(1,674)
1,278
-2.5c
1,674
(1,278)
2023
+2.5c
(167)
(2,001)
-2.5c
167
2,001
The above table demonstrates the sensitivity to a reasonably possible change in NZD exchange rates, with all other variables held
constant. The impact on the Group’s profit before tax is due to changes in translation rates. The impact on the Group’s equity is due to
changes in the fair value of the net investment.
Credit risk
Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in financial loss to the Group.
Credit risk for cash deposits is managed by holding all cash deposits with major Australian banks. Credit risk for trade receivables is
managed by completing credit checks for new customers. Outstanding receivables are regularly monitored for payments in accordance
with credit terms. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount,
net of any provisions for impairment of those assets, as disclosed in the Consolidated Statement of Financial Position and notes to the
financial statements. The Group does not hold any collateral.
The Group does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments
entered into by the Group.
The credit risk for derivative financial instruments arises from the potential failure of the counter-party to meet its obligations. The
credit risk exposure of forward contracts is the net fair value of these contracts.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents) and
available borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring
actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Subject to the continuance of satisfactory credit ratings and compliance with banking covenants, the bank loan facilities may be
drawn at any time and have a maturity of one year, eight months (2023: two years, eight months). The bank loan facilities are
interest-only repayments.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
96
Remaining contractual maturities
The following tables detail the Group’s remaining contractual maturity for its financial instrument liabilities. The tables have been
drawn based on the undiscounted cash flows of financial liabilities at the earliest date on which the financial liabilities are required to
be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities, therefore these totals
may differ from their carrying amount in the statement of financial position.
As at 30 June 2024
Weighted
average
interest
rate
%
1 year or less
$’000
Between
1 and
2 years
$’000
Between
2 and
5 years
$’000
Over 5 years
$’000
Total contracted
cashflows
$’000
Non-derivatives
Non-interest bearing
Trade payables
-
10,176
-
-
-
10,176
Other payables
-
22,647
-
-
-
22,647
Contingent consideration
-
9,189
419
254
-
9,862
Interest-bearing – variable
Debt facility
7.03%
-
220,485
-
-
220,485
Asset financing facility
2.50%
2,210
-
-
-
2,210
Property lease liabilities
4.02%
19,362
17,196
43,855
95,325
175,738
Total non-derivatives
63,583
238,100
44,109
95,325
441,118
As at 30 June 2023
Weighted
average
interest
rate
%
1 year or less
$’000
Between
1 and
2 years
$’000
Between
2 and
5 years
$’000
Over 5 years
$’000
Total
contracted
cashflows
$’000
Non-derivatives
Non-interest bearing
Trade payables
-
10,408
-
-
-
10,408
Other payables
-
20,737
-
-
-
20,737
Deferred consideration
-
7,479
7,778
-
-
15,257
Interest-bearing – variable
Debt facility
5.45%
-
-
220,120
-
220,120
Asset financing facility
2.50%
2,455
2,189
-
-
4,644
Property lease liabilities
4.10%
18,922
18,182
42,057
90,695
169,856
Total non-derivatives
60,001
28,149
262,177
90,695
441,022
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
97
Integral Diagnostics
Annual Report 2024
Note 28. Key management personnel disclosures
Compensation
The aggregate compensation paid to Directors and other members of the Key Management Personnel of the Group is set out below:
Consolidated
30 June 2024
$
30 June 2023
$
Short-term employee benefits
3,616,963
4,484,029
Post-employment benefits
155,504
183,872
Long-term employee benefits
28,453
107,556
Share-based payments
621,026
350,475
4,421,946
5,125,932
Note 29. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by PricewaterhouseCoopers, the
Company's auditors:
Consolidated
30 June 2024
$
30 June 2023
$
Audit services
PricewaterhouseCoopers Australia
Audit and review of the financial statements
Consolidated group
574,000
723,000
Controlled entities
-
-
574,000
723,000
Other services
PricewaterhouseCoopers Australia
Due diligence and tax advisory services
-
-
Tax compliance services
-
-
Other services
114,550
-
114,550
-
Network firms of PricewaterhouseCoopers
Tax compliance and company secretarial services
-
-
Due diligence and tax advisory services
-
-
-
-
Total other services
114,550
-
Total remuneration
688,550
723,000
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
98
Note 30. Contingent liabilities
The Group has given bank guarantees as at 30 June 2024 of $3.2 million (2023: $3.3 million) to various landlords.
Refer to Note 20 for details on contingent consideration liabilities held by the Group.
Note 31. Commitments
As at 30 June 2024, there were capital commitments for plant and equipment and leasehold improvements of $11.7 million (2023:
$10.3 million).
Note 32. Related party transactions
Parent entity
Integral Diagnostics Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in Note 34.
Joint ventures
Interests in joint ventures are set out in Note 16.
Key management personnel
Disclosures relating to KMP are set out in Note 28 and the Remuneration Report on pages 33 - 57.
All transactions with KMP are made on commercial arm’s length terms and conditions, and in the ordinary course of business. The
Board has an established Related Party Transaction Policy, which is overseen by the Audit, Risk and Compliance Committee (ARCC),
to ensure that related party transactions are managed and disclosed in accordance with the Corporations Act, ASX Listing Rules,
accounting requirements and in accordance with good governance practices. This is to ensure that a financial benefit is not provided to
related parties without approval by the Board and, where required, shareholders.
The following transactions occurred with related parties:
Consolidated
$
%
interest
KMP interest
$
30 June 2024
Payment for teleradiology services to Tele-Rad Consultancy L.L.C-FZ of which Dr
Nazar Bokani is related
54,377
100%
54,377
The above FY24 related party transactions relate to teleradiology services provided to the Group by Dr Bokani and are on commercial
terms consistent with other teleradiology providers to the Group.
Loans to related party
Consolidated
30 June 2024
$
30 June 2023
$
Loan to key management personnel
Balance at the beginning of the year
446,614
454,658
Repayments
-
(8,044)
Balance at cessation of Dr Bokani as KMP1
(446,614)
-
Balance at the end of the year
-
446,614
1. Dr Nazar Bokani ceased KMP position on 9 August 2023. As such, the disclosed balance of his related party loan is at this date.
99
Integral Diagnostics
Annual Report 2024
Dr Bokani is a radiologist employed by the Group. The loan above arose on Dr Bokani’s participation in the Radiologist Loan Funder
Share Plan in 2019, prior to his appointment as a director. The non-recourse loan was made on an interest-free basis, is subject to a
four-year continuous service condition, has a 10-year term, is repayable in full on 1 March 2029, and is thus accounted for as a share
option. These terms are consistent with those offered to other radiologists under rules governing the loan share scheme.
Note 33. Parent entity information
Summary financial information
The individual financial statements for the parent entity, Integral Diagnostics Limited, show the following aggregate amounts.
Statement of Profit or Loss and Other Comprehensive Income
Parent
30 June 2024
$’000
30 June 2023
$’000
(Loss)/profit after income tax
14,316
1,793
Total comprehensive income
14,316
1,793
Statement of Financial Position
Parent
30 June 2024
$’000
30 June 2023
$’000
Total current assets
5,099
3,540
Total assets
878,542
671,872
Total current liabilities
(19,208)
(4,392)
Total liabilities
526,792
323,795
Equity
Contributed capital
335,088
333,280
Share-based payments reserve
6,024
4,652
Retained profits
10,638
10,145
Total equity
351,750
348,077
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity is party to the deed of cross guarantee, as disclosed in Note 36.
Contingent liabilities
Except as disclosed in Note 30, there are no other contingent liabilities of the parent entity as at 30 June 2024.
Capital commitments – property, plant and equipment
The parent entity had $0.2m in capital commitments for property, plant and equipment as at 30 June 2024.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in Note 2, except for the following:
• investments in subsidiaries are accounted for at cost, less an impairment, in the parent entity;
• investments in associates are accounted for at cost, less any impairment, in the parent entity; and
• dividends received from subsidiaries are recognised as other income by the parent entity and their receipt may be an indicator of
an impairment of the investment.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
100
34. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the
accounting policy described in Note 2:
Ownership interest
Name of entity
Principal place of business/
country of incorporation
2024
%
2023
%
Lake Imaging Pty Ltd
Australia
100
100
Radploy Pty Ltd
Australia
100
100
Radploy 2 Pty Ltd
Australia
100
100
Radploy 3 Pty Ltd
Australia
100
100
Radploy 4 Pty Ltd
Australia
100
100
Global Diagnostics (Australia) Pty Ltd
Australia
100
100
SCR Corporate Pty Ltd
Australia
100
100
RAD Corporate Pty Ltd
Australia
100
100
Integral Diagnostics No. 1 Pty Ltd
Australia
100
100
Imaging Queensland Pty Ltd
Australia
100
100
Queensland Nuclear Medicine Pty Ltd
Australia
100
100
Advanced Women’s Imaging Pty Ltd
Australia
100
100
Imaging Queensland IP Pty Ltd
Australia
100
100
Radiology 24/7 Pty Ltd
Australia
100
100
Sunshine Coast Radiology Pty Ltd
Australia
100
100
SC Radiology Pty Ltd
Australia
100
100
Central Queensland Radiology Pty Ltd
Australia
100
100
CQ Radiology Pty Ltd
Australia
100
100
IQ Radiology Pty Ltd
Australia
100
100
IQ Radiology Services Pty Ltd
Australia
100
100
Integrated Pain Management Pty Ltd
Australia
100
100
Bodyscreen Pty Ltd
Australia
100
100
The X-Ray Group Pty Ltd
Australia
100
100
Martlesham Pty Ltd
Australia
100
100
Warby X-Ray Services Pty Ltd
Australia
100
100
Wang X-Ray Unit Trust
Australia
100
100
Tern Hill Pty Ltd
Australia
100
100
Yarrawonga X-Ray Services Pty Ltd
Australia
100
100
Yarra X-Ray Unit Trust
Australia
100
100
The Imaging Trust
Australia
100
100
Citiscan Radiology Pty Ltd
Australia
100
100
Peloton Radiology Pty Ltd
Australia
100
100
The Women's Imaging Group Pty Ltd
Australia
100
100
X-Ray & Imaging Holdings Pty Ltd
Australia
100
100
X-Ray & Imaging Pty Ltd
Australia
100
100
Specialist Radiology and MRI Limited
New Zealand
100
100
Trinity MRI Limited
New Zealand
100
100
101
Integral Diagnostics
Annual Report 2024
Ownership interest
Name of entity
Principal place of business/
country of incorporation
2024
%
2023
%
Integral Diagnostics New Zealand Limited
New Zealand
100
100
Astra Radiology Limited
New Zealand
100
100
Insight Radiology Limited
New Zealand
100
100
Horizon Radiology Limited
New Zealand
100
100
Note 35. Deed of cross guarantee
The following entities are party to a Deed of Cross Guarantee, under which each company guarantees the debts of the others:
• Integral Diagnostics Limited (formerly known as Lake Imaging Holdings Pty Ltd)
• Lake Imaging Pty Ltd
• Radploy Pty Ltd
• Radploy 2 Pty ltd
• Radploy 3 Pty Ltd
• Radploy 4 Pty Ltd
• Global Diagnostics (Australia) Pty Ltd
• SCR Corporate Pty Ltd
• RAD Corporate Pty Ltd
• Integral Diagnostics No. 1 Pty Ltd
• Imaging Queensland Pty Ltd
• Queensland Nuclear Medicine Pty Ltd
• Advanced Women’s Imaging Pty Ltd
• Imaging Queensland IP Pty Ltd
• Radiology 24/7 Pty Ltd
• Sunshine Coast Radiology Pty Ltd
• SC Radiology Pty Ltd
• Central Queensland Radiology Pty Ltd
• CQ Radiology Pty Ltd
• IQ Radiology Pty Ltd
• IQ Radiology Services Pty Ltd
• Integrated Pain Management Pty Ltd
• Bodyscreen Pty Ltd
• Martlesham Pty Ltd
• The X-Ray Group Pty Ltd
• Warby X-Ray Services Pty Ltd
• Tern Hill Pty Ltd
• Yarrawonga X-Ray Services Pty Ltd
• Citiscan Radiology Pty Ltd
• Peloton Radiology Pty Ltd
• The Womens Imaging Group Pty Ltd
• X-Ray & Imaging Holdings Pty Ltd
• X-Ray & Imaging Pty Ltd
By entering into the deed, the wholly owned entities have been relieved from the requirement to prepare financial statements and a
Directors’ Report under Class Order 98/1418 (as amended) issued by the Australian Securities and Investments Commission (ASIC).
The above companies represent a ‘closed group’ for the purposes of the Class Order, and as there are no other parties to the deed of
cross guarantee that are controlled by Integral Diagnostics Limited, they also represent the ‘extended closed group’.
The consolidated statement of profit or loss, consolidated statement of comprehensive income, summary of movements in consolidated
retained earnings, and consolidated statement of financial position of the entities that are members of the Closed Group are as follows:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
102
Consolidated Statement of Profit or loss and Comprehensive income
Note
30 June 2024
$’000
30 June 2023
$’000
Revenue
Revenue
411,823
385,627
Interest, management fees and dividends eliminated on consolidation
-
3,899
Interest and other income
829
447
Total revenue and other income
412,652
389,973
Expenses
Consumables
(20,163)
(18,550)
Employee benefits expense
(265,397)
(249,432)
Depreciation expense
(23,702)
(22,221)
Amortisation expense
(15,981)
(14,632)
Transaction and integration expenses
(5,243)
8,016
Share based payment expense
(1,589)
(2,540)
Equipment related expenses
(13,658)
(13,307)
Occupancy expenses
(7,539)
(6,055)
Other expenses
(37,850)
(30,149)
Finance costs
(16,752)
(12,489)
Share of net profits of joint ventures accounted using the equity method
(60)
(328)
Total expenses
(407,934)
(361,687)
Profit before income tax expense
4,718
28,286
Income tax expense
(3,795)
(5,294)
Profit for the year from continuing operations
923
22,992
Profit is attributable to:
Owners of Integral Diagnostics Limited
923
22,992
Comprehensive income
Items that may be reclassified to profit & loss:
Net (loss)/gain on cash flow hedges
-
-
Total comprehensive income
923
22,992
103
Integral Diagnostics
Annual Report 2024
Consolidated Statement of Financial Position
Note
30 June 2024
$’000
30 June 2023
$’000
Assets
Current assets
Cash and cash equivalents
34,747
27,034
Trade and other receivables
18,612
58,346
Income tax receivable
(2,483)
173
Other assets
76,955
4,851
Inventory
1,398
1,632
Total current assets
129,229
92,036
Non-current assets
Property, plant and equipment
125,502
129,753
Right-of-use assets
99,031
106,657
Intangibles
317,316
321,122
Deferred tax asset
-
3,807
Investment
46,188
46,198
Total non-current assets
588,037
607,537
Total assets
717,266
699,573
Liabilities
Current liabilities
Trade and other payables
27,825
24,895
Borrowings
2,190
2,356
Lease liabilities
12,167
12,600
Contingent consideration
8,731
6,101
Provisions
25,833
26,012
Total current liabilities
76,746
71,964
Non-current liabilities
Contingent consideration
673
7,778
Borrowings
169,386
147,205
Lease liabilities
99,717
105,133
Deferred tax liability
1,683
-
Provisions
10,060
8,784
Total non-current liabilities
281,519
268,900
Total liabilities
358,265
340,864
Net assets
359,001
358,709
Equity
Contributed capital
335,001
333,280
Reserves
(6,401)
(7,723)
Retained profits
30,401
33,152
Total equity
359,001
358,709
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
104
Note 36. Reconciliation of profit after income tax to net cash from operating activities
Consolidated
30 June 2024
$’000
30 June 2023
$’000
(Loss)/profit after income tax expense for the year
(60,699)
25,040
Adjustments for:
Depreciation and amortisation
46,862
43,486
Impairment of assets
74,639
-
Loan establishment costs amortisation/write-off
438
391
Share-based payments
1,372
2,212
(Profit)/loss on the sale of assets
(20)
17
Remeasurement of make good provisions
-
(849)
Unwinding of discounting for makegood provisions
234
190
Remeasurement of contingent consideration liabilities
(1,334)
(15,839)
Bad debts
638
356
Unrealised FX (gain)
(6)
(3)
Share of (profits)/losses of joint venture
60
328
Change in operating assets and liabilities, net of the effects of business combinations:
Increase in trade and other receivables
(3,250)
(352)
Decrease/(increase) in deferred taxes
5,273
(1,764)
(Increase)/decrease in other operating assets and inventory
(466)
693
Increase/(decrease) in trade and other payables
1,694
3,159
Increase/(decrease) in deferred income
(35)
(82)
Increase/(decrease) in provision for income tax
(251)
5,355
Increase /(decrease) in other provisions
1,010
4,938
Net inflow cash from operating activities
66,159
67,276
105
Integral Diagnostics
Annual Report 2024
Reconciliation of liabilities arising from financing activities
Consolidated
Property leases
due within 1
year
$’000
Property leases
due after 1 year
$’000
Borrowings
due within 1
year
$’000
Borrowings
due after 1 year
$’000
Total
$’000
Balance as at 1 July 2022
11,740
106,199
5,470
217,582
340,991
Business combination
1,765
19,144
195
-
21,104
New leases net of terminations
978
12,213
-
-
13,191
Impact of liability maturity for period
18,890
(10,596)
41,905
(41,600)
8,599
Cash flows
(19,252)
-
(45,209)
43,049
(21,412)
FX
93
306
93
2,111
2,603
Balance as at 30 June 2023
14,214
127,266
2,454
221,142
365,076
Business combination
-
-
-
-
-
New leases net of terminations
(574)
(760)
-
-
(1,334)
Impact of liability maturity for period
20,767
(4,954)
2,177
(1,740)
16,250
Cash flows
(20,468)
-
(2,424)
-
(22,892)
FX
21
320
4
354
699
Balance as at 30 June 2024
13,960
121,872
2,211
219,756
357,799
Net debt reconciliation
30 June 2024
$’000
30 June 2023
$’000
Cash and cash equivalents
42,438
33,855
Borrowings – repayable within one year
(2,210)
(2,454)
Borrowings – repayable after one year
(219,756)
(221,142)
Net debt
(179,528)
(189,741)
Cash and liquid investments
42,438
33,855
Gross debt – variable interest rates
(221,966)
(223,596)
Net debt
(179,528)
(189,741)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
106
Note 37. Earnings per share
30 June 2024
$’000
30 June 2023
$’000
(Loss)/profit after income tax
(60,699)
25,040
(Loss)/profit after income tax attributable to the owners of Integral Diagnostics Limited
(60,699)
25,040
30 June 2024
#
30 June 2023
#
Weighted average number of ordinary shares used in calculating basic earnings per share
233,496,534
232,718,711
Adjustments for calculation of diluted earnings per share:
Weighted average number of performance rights over ordinary shares
2,419,593
2,928,429
Weighted average number of options over ordinary shares
414,323
148,156
Weighted average number of ordinary shares used in calculating diluted earnings per share
236,330,450
235,795,296
Cents
Cents
Basic (loss)/earnings per share attributable to the owners of Integral Diagnostics Limited
(26.0)
10.8
Diluted (loss)/earnings per share attributable to the owners of Integral Diagnostics Limited
(26.0)
10.6
Accounting policy for earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Integral Diagnostics Limited, excluding any
costs of servicing equity other than ordinary shares, by weighted average number of ordinary shares outstanding during the financial
year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after
income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average
number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
107
Integral Diagnostics
Annual Report 2024
Note 38. Events after the reporting period
Resignation of Director
On 5 August 2024, the Company announced the resignation of Dr Jacqueline Milne from the Board of Directors, effective 5 August 2024.
Proposed acquisition of Capitol Health Limited
On 18 July 2024, the Group announced that following the completion of a two-way confirmatory due diligence process, an agreement
had been reached to enter into a binding Merger Implementation Deed to acquire 100% of Capitol Health Limited's ("Capitol") issued
shares via a scheme of arrangement.
The Merger Implementation Deed outlines the terms and conditions on which both parties can now proceed to implement the merger
via a scheme of arrangement, consistent with the terms of the merger process deed entered into by both parties as announced on
17 June 2024. Under the proposed scheme, shareholders in Capitol would receive 0.12849 shares in IDX per Capitol share.
Capitol’s Board have unanimously recommended that Capitol shareholders vote in favour of the scheme, in the absence of a superior
proposal and subject to an independent expert concluding (and continuing to conclude) that the scheme is in the best interests of
Capitol shareholders. Subject to these qualifications, each Capitol Director has confirmed they intend to vote any shares that they hold
or control in favour of the scheme. The scheme is subject to customary conditions and approvals for a transaction of this nature,
including court, regulatory and Capitol shareholder approvals, as well as no material adverse changes or prescribed occurrences.
Results of the performance conditions for the Long Term Incentive (LTI) awards
The performance condition relating to the performance rights issued as part of the FY21 Long Term Incentive (LTI) awards was tested
on 27 August 2024. The performance required for vesting was not met, and as a result 373,374 performance rights lapsed.
Dividend declaration
Subsequent to year end, a dividend of 3.3 cents per share was declared and will be paid on 3 October 2024.
Other matters or circumstances
Other than those detailed above, no other matters or circumstances have arisen since 30 June 2024 that have significantly affected, or
may significantly affect, the Group’s operations, the results of those operations, or the Group’s state of affairs in future financial years.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
108
As at 30 June 2024
Name of entity
Type of entity
Trustee,
partner or
participant
in JV
% of share
capital
Place of
business/
country of
incorporation
Australian
resident or
foreign
resident
Foreign
jurisdiction(s)
of foreign
residents
Integral Diagnostics Limited
Company
-
100
Australia
Australia
n/a
Lake Imaging Pty Ltd
Company
-
100
Australia
Australia
n/a
Radploy Pty Ltd
Company
-
100
Australia
Australia
n/a
Radploy 2 Pty Ltd
Company
-
100
Australia
Australia
n/a
Radploy 3 Pty Ltd
Company
-
100
Australia
Australia
n/a
Radploy 4 Pty Ltd
Company
-
100
Australia
Australia
n/a
Global Diagnostics (Australia) Pty Ltd
Company
-
100
Australia
Australia
n/a
SCR Corporate Pty Ltd
Company
-
100
Australia
Australia
n/a
RAD Corporate Pty Ltd
Company
-
100
Australia
Australia
n/a
Integral Diagnostics No. 1 Pty Ltd
Company
-
100
Australia
Australia
n/a
Imaging Queensland Pty Ltd
Company
-
100
Australia
Australia
n/a
Queensland Nuclear Medicine Pty Ltd
Company
-
100
Australia
Australia
n/a
Advanced Women’s Imaging Pty Ltd
Company
-
100
Australia
Australia
n/a
Imaging Queensland IP Pty Ltd
Company
-
100
Australia
Australia
n/a
Radiology 24/7 Pty Ltd
Company
-
100
Australia
Australia
n/a
Sunshine Coast Radiology Pty Ltd
Company
-
100
Australia
Australia
n/a
SC Radiology Pty Ltd
Company
-
100
Australia
Australia
n/a
Central Queensland Radiology Pty Ltd
Company
-
100
Australia
Australia
n/a
CQ Radiology Pty Ltd
Company
-
100
Australia
Australia
n/a
IQ Radiology Pty Ltd
Company
-
100
Australia
Australia
n/a
IQ Radiology Services Pty Ltd
Company
-
100
Australia
Australia
n/a
Integrated Pain Management Pty Ltd
Company
-
100
Australia
Australia
n/a
Bodyscreen Pty Ltd
Company
-
100
Australia
Australia
n/a
The X-Ray Group Pty Ltd
Company
-
100
Australia
Australia
n/a
Martlesham Pty Ltd
Company
-
100
Australia
Australia
n/a
Warby X-Ray Services Pty Ltd
Company
Trustee
100
Australia
Australia
n/a
Wang X-Ray Unit Trust
Trust
-
100
Australia
Australia
n/a
Yarrawonga X-Ray Services Pty Ltd
Company
Trustee
100
Australia
Australia
n/a
Yarra X-Ray Unit Trust
Trust
-
100
Australia
Australia
n/a
Tern Hill Pty Ltd
Company
Trustee
100
Australia
Australia
n/a
The Imaging Trust
Trust
-
100
Australia
Australia
n/a
Citiscan Radiology Pty Ltd
Company
-
100
Australia
Australia
n/a
Peloton Radiology Pty Ltd
Company
-
100
Australia
Australia
n/a
The Women's Imaging Group Pty Ltd
Company
-
100
Australia
Australia
n/a
X-Ray & Imaging Holdings Pty Ltd
Company
-
100
Australia
Australia
n/a
X-Ray & Imaging Pty Ltd
Company
-
100
Australia
Australia
n/a
Specialist Radiology and MRI Limited
Company
-
100
New Zealand
Foreign
New Zealand
Trinity MRI Limited
Company
-
100
New Zealand
Foreign
New Zealand
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
109
Integral Diagnostics
Annual Report 2024
As at 30 June 2024
Name of entity
Type of entity
Trustee,
partner or
participant
in JV
% of share
capital
Place of
business/
country of
incorporation
Australian
resident or
foreign
resident
Foreign
jurisdiction(s)
of foreign
residents
Integral Diagnostics New
Zealand Limited
Company
-
100
New Zealand
Foreign
New Zealand
Astra Radiology Limited
Company
-
100
New Zealand
Foreign
New Zealand
Insight Radiology Limited
Company
-
100
New Zealand
Foreign
New Zealand
Horizon Radiology Limited
Company
-
100
New Zealand
Foreign
New Zealand
Basis of preparation
This Consolidated Entity Disclosure Statement (CEDS) has been prepared in accordance with the Corporations Act 2001 and includes
information for each entity that was part of the consolidated entity as at the end of the financial year in accordance with AASB 10:
Consolidated Financial Statements.
Determination of tax residency
Section 295 (3A)(vi) of the Corporation Act 2001 defines tax residency as having the meaning in the Income Tax Assessment Act 1997.
The determination of tax residency involves judgement as there are different interpretations that could be adopted, and which could
give rise to a different conclusion on residency.
In determining tax residency, the consolidated entity has applied the following interpretations:
• Australian tax residency.
The consolidated entity has applied current legislation and judicial precedent, including having regard to the Tax Commissioner's public
guidance in Tax Ruling TR 2018/5:
• Foreign tax residency.
Where necessary, the consolidated entity has used independent tax advisers in foreign jurisdictions to assist in its determination of tax
residency to ensure applicable foreign tax legislation has been complied with (see section 295(3A)(vii) of the Corporations Act 2001).
Partnerships and trusts
Entities are typically taxed on a flow-through basis. Australian tax law generally does not contain corresponding residency tests
for partnerships and trusts, and these additional disclosures on the tax status of partnerships and trusts have been provided
where relevant.
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
110
In the Directors’ opinion:
• the attached financial statements and notes comply with the Corporations Act 2001, the accounting standards, the Corporations
Regulations 2001 and other mandatory professional reporting requirements;
• the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board as described in Note 2 to the financial statements;
• the attached financial statements and notes give a true and fair view of the Group’s financial position as at 30 June 2024 and of its
performance for the financial year ended on that date;
• there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;
• the Consolidated Entity Disclosure Statement on page 109 is true and correct, and
• at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group will be able
to meet any obligations or liabilities to which they are, or may become, subject to by virtue of the deed of cross guarantee described
in Note 35 to the financial statements.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors
Toby Hall
Chair
Ian Kadish
Managing Director and Chief
Executive Officer
27 August 2024
DIRECTORS’ DECLARATION
111
Integral Diagnostics
Annual Report 2024
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999
Liability limited by a scheme approved under Professional Standards Legislation.
Independent auditor’s report
To the members of Integral Diagnostics Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Integral Diagnostics Limited (the Company) and its controlled
entities (together the Group) is in accordance with the Corporations Act 2001, including:
(a)
giving a true and fair view of the Group's financial position as at 30 June 2024 and of its
financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The financial report comprises:
the consolidated statement of financial position as at 30 June 2024
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of profit or loss for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, including material accounting policy
information and other explanatory information
the consolidated entity disclosure statement as at 30 June 2024
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INTEGRAL
DIAGNOSTICS LIMITED
112
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Audit Scope
Our audit focused on where the Group made subjective judgements; for example, significant
accounting estimates involving assumptions and inherently uncertain future events.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matter to the Audit
Committee.
113
Integral Diagnostics
Annual Report 2024
Key audit matter
How our audit addressed the key audit matter
Carrying value of goodwill and brand names and
trademarks
(Refer to note 14) [$399.1 million]
At 30 June 2024, the Group has a goodwill balance of
$373.4 million and indefinite life brand names and
trademarks of $25.7 million.
The Group’s goodwill and brand names are tested for
impairment across two cash generating unit Groups
(“CGU’s”) – Australia and New Zealand.
Under Australian Accounting Standards, the Group is
required to assess the goodwill and brand names for
impairment at least annually. The Group has performed
impairment tests over the CGU’s based on value in use
discounted cash flow models (the models). This
requires the Group to make significant judgements and
assumptions, including estimation of forecast cash
flows, terminal value growth rates and discount rates.
During the year, the Group recognised the following
impairment charge:
$71.6 million in respect of goodwill in the New
Zealand CGU; and
$3.0 million in respect of brand names and
trademarks in the Australia CGU.
The carrying value of goodwill and indefinite life brand
names and trademarks was determined to be a Key
Audit Matter due to:
the significant to the consolidated statement of
financial position; and
the degree of judgement requirement by the
Group in estimating discounted future cash
flows and assessing the impairment charge to
be recognised.
We performed the following procedures, amongst
others:
Tested the mathematical accuracy of key
underlying calculations in the impairment
models.
Compared the forecast future cash flows used
in the model with the forecasts formally
approved by the board.
Compared growth assumptions in the forecast
cash flows to historical results and external
data sources such as economic and industry
forecasts.
With assistance of our internal valuation
experts, we assessed the discount rates and
long-term growth rates used in the models by
comparing them to external market data and
comparable companies.
We evaluated the disclosures made in Note 14,
including those regarding key assumptions in light of
the requirements of Australian Accounting Standards.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INTEGRAL
DIAGNOSTICS LIMITED
114
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2024, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon through our opinion on the financial report. We
have issued a separate opinion on the remuneration report.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report in accordance
with Australian Accounting Standards and the Corporations Act 2001, including giving a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of
the financial report that is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
115
Integral Diagnostics
Annual Report 2024
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 34 to 54 of the directors’ report for the
year ended 30 June 2024.
In our opinion, the remuneration report of Integral Diagnostics Limited for the year ended 30 June
2024 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Niamh Hussey
Melbourne
Partner
27 August 2024
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INTEGRAL
DIAGNOSTICS LIMITED
116
Certain parts of this report contain financial measures that have not been prepared in accordance with the Australian equivalents of
international financial reporting standards (IFRS) and are not recognised measures of financial performance or liquidity under IFRS.
In addition to the financial information presented in accordance with IFRS, certain ‘non-GAAP financial measures’ have been included
in this report. These measures include Capital Expenditure, Free Cash Flow, Operating EBITA, Operating EBITDA , Operating NPAT,
Reported EBITDA, Net Debt, Net Debt to EBITDA (leverage ratio), Net Debt to Equity, Net Tangible Assets, and Net Tangible Asset per
Ordinary Security, Return on Invested Capital (ROIC) and Return on Operating Assets.
These non-IFRS financial measures are defined below. This section provides a reconciliation of these measures to the Group's
Financial Statements.
The Group believes that the non-IFRS financial measures it presents, provide a useful means through which to examine the underlying
performance of its business. These measures however, should not be considered to be an indication of, or an alternative to,
corresponding measures of gross profit, net profit, cash flows from operating activities, or other figures determined in accordance
with IFRS. In addition, such measures may not be comparable to similar measures presented by other companies.
Undue reliance should not be placed on the non-IFRS financial measures contained in this report, and the non-IFRS financial measures
should not be considered in isolation or as a substitute for financial measures computed in accordance with IRFS.
Although certain of these data have been extracted or derived from the Group's Financial Statements, these data have not been audited
or reviewed by the Group's independent auditors.
Definition and calculation of Non-IFRS financial information
Definitions and calculation methodology for non-IFRS financial information used in this report are as follows:
Non-IFRS
Financial Information
Management use
Calculation methodology
Capital Expenditure
Used to assess the Group's deployment of capital.
Management uses this measure to aid the decision making
of capital allocation and productivity.
Includes capital additions for monies
spent on fixed assets such as
office furniture equipment, plant and
equipment, motor vehicles, software and
leasehold improvements.
Free Cash Flow
Used to assess the cash available for investing and financing
activities, including shareholder distributions, and debt
servicing after running the Group's operations.
Cash flow from operating subtracting
replacement capital expenditure.
Net Debt
Used to measure the structure of the balance sheet, and the
financing of the Group, and aids Management in tracking the
relative debt level of the Group.
Calculated as interest bearing liabilities
less cash and cash equivalents.
Net Debt to EBITDA
(leverage ratio)
Used to measure the profitability of the Group relative to
the debt required to be serviced, and aids Management in
determining debt servicing requirements of the Group.
Calculated as net debt divided by Reported
EBITDA, adjusted for items of income and
expense as set out per the Group's lending
covenant requirements.
Net Tangible Assets
Used to measure the Group's net asset position (after
excluding intangible assets) to aid Management in assessing
the liquidity and solvency positions of the Group.
Calculated as net assets after subtracting
intangible assets, including right-of-
use assets.
Net Tangible Assets per
Ordinary Security
Used to measure the Group's capital allocation decisions
relative to the performance of its share price
(equity valuation).
Calculated as net tangible assets, divided
by ordinary shares on issue.
NON-IFRS FINANCIAL INFORMATION
117
Integral Diagnostics
Annual Report 2024
Non-IFRS
Financial Information
Management use
Calculation methodology
Operating EBITA
Used to assess the Group's operational profitability, excluding
amortisation of non-operating intangibles, net finance costs
and income tax expense, in order to help Management track
the performance of the Group from its operations only, after
excluding the impacts of exceptional and abnormal items.
Calculated as profit before income tax
expense and net finance costs, excluding
non-operating items.
Operating EBITDA
Used to assess the Group's operational profitability, excluding
depreciation, amortisation, net finance costs and income
tax expense, in order to help Management track the
performance of the Group from its operations, only after
excluding the impact of exceptional and abnormal items.
This assists Management in determining optimal resource
allocation decisions.
Calculated as profit before income
tax expense, net finance costs,
depreciation and amortisation, excluding
non-operating items.
Operating NPAT
Used to assess the Group's operational profitability after
excluding the impacts of exceptional and abnormal items.
Calculated as statutory net profit after
tax, after excluding tax effective non-
operating items.
Reported EBITA
Used to assess the Group's operational profitability, excluding
amortisation of non-operating intangibles, net finance costs
and income tax expense in order to help management track
the performance of the Group from its operations only.
Calculated as profit before income tax
expense and net finance costs.
Reported EBITDA
Used to assess the Group's operational profitability, excluding
depreciation, amortisation, net finance costs and income tax
expense, in order to help Management track the performance
of the Group from its operations.
Calculated as profit before income tax
expense, net finance costs, depreciation
and amortisation.
Return on Invested
Capital (ROIC)
Used to assess the Group's efficiency in allocating
capital to investments, and aids Management in making
investment decisions.
Calculated as Operating EBITA divided by
the sum of net debt and share capital
(averaged over 24 months).
Return on
Operating Assets
Used to assess the Group's efficiency in utilising operating
assets to generate earnings, and aids management in making
investment decisions.
Calculated as LTM organic Operating NPAT
(plus trailing acquisitions NPAT) divided by
the sum of current assets and property
plant and equipment (at cost).
NON-IFRS FINANCIAL INFORMATION
118
Reconciliation of statutory earnings to non-IFRS financial information
Derived from the Statutory Consolidated Statement of Profit of Loss
30 June 2024
$’000
30 June 2023
$’000
Operating NPAT
Statutory NPAT
(60,699)
25,040
Adjusted for:
Remeasurement of contingent consideration liabilities (tax-effected)
(1,337)
(15,774)
Transaction, restructuring and integration costs (tax-effected)1,2
3,393
4,879
Share based payments (tax-effected)
999
1,852
Share of net profit of joint ventures (tax-effected)
60
328
Amortisation of customer contracts (tax-effected)
1,057
1,537
Impairment expense (tax-effected)
74,639
26
Operating NPAT
18,112
17,888
Reported EBITA/EBITDA
Statutory NPAT
(60,699)
25,040
Adjusted for:
Income tax expense
3,564
5,593
Interest income
(861)
(423)
Finance costs
22,547
18,365
Reported EBITA
(35,449)
48,575
Adjusted for:
Amortisation of customer contracts
1,489
2,153
Depreciation expense
27,888
25,459
Depreciation expense - right-of-use asset
17,485
15,874
Reported EBITDA
11,413
92,061
Operating EBITA
Reported EBITA
(35,449)
48,575
Adjusted for:
Remeasurement of contingent consideration liabilities
(1,337)
(15,839)
Transaction, restructuring and integration costs3,4
5,694
6,762
Share based payments
999
1,852
Share of net profit of joint ventures
60
328
Amortisation of customer contracts
1,489
2,153
Impairment expense
74,639
-
Operating EBITA
46,095
43,831
1. FY24 transaction, restructuring and integration costs contain $1.9m (tax-effected) of labour costs directly attributable to, or resulting from non-operating transaction, restructuring and integration
activities (2023: $1.0m).
2. Includes $1.0m (tax-effected) of labour costs (2023: $0.9m) that are classified as transaction, restructuring and integration costs to reflect the underlying financial performance of the Group.
3. FY24 transaction, restructuring and integration costs contain $2.7m of labour costs directly attributable to, or resulting from non-operating transaction, restructuring and integration activities
(2023: $1.4m).
4. Includes $1.4m of labour costs (2023: $1.3m) that are classified as transaction, restructuring and integration costs to reflect the underlying financial performance of the Group.
119
Integral Diagnostics
Annual Report 2024
30 June 2024
$’000
30 June 2023
$’000
Operating EBITDA
Reported EBITDA
11,413
92,061
Adjusted for:
Remeasurement of contingent consideration liabilities
(1,337)
(15,839)
Transaction, restructuring and integration costs1,2
5,694
6,762
Share based payments
999
1,852
Share of net profit of joint ventures
60
328
Impairment expense
74,639
26
Operating EBITDA
91,468
85,190
1. FY24 transaction, restructuring and integration costs contain $2.7m of labour costs directly attributable to, or resulting from non-operating transaction, restructuring and integration activities
(2023: $1.4m).
2. Includes $1.4m of labour costs (2023: $1.3m) that are classified as transaction, restructuring and integration costs to reflect the underlying financial performance of the Group.
Derived from the Consolidated Statement of Profit or Loss and Consolidated Statement of FInancial Position
30 June 2024
$’000
30 June 2023
$’000
Diluted Operating EPS
Operating NPAT
18,112
17,888
Divided by:
Weighted average no. of shares (WaNoS)
30 June 2024
#000s
30 June 2023
#000s
WaNoS
233,497
232,719
WaN diluting instruments
2,834
3,076
Total dilutive WaNoS
236,331
235,795
Diluted Operating EPS (cents per share)
7.7
7.6
30 June 2024
$’000
30 June 2023
$’000
Return on invested capital
Operating EBITA
46,095
43,831
Divided by:
Operating assets
Current debt
2,210
2,454
Non-current debt
219,756
221,142
Current lease liabilities
13,960
14,214
Non-current lease liabilities
121,871
127,266
Cash
(42,438)
(33,855)
Net Debt (including lease liablities)
315,359
331,221
Share Capital
335,001
333,280
Capital invested
650,360
664,501
Average capital invested
657,430
602,421
Return on invested capital
7.0%
7.3%
NON-IFRS FINANCIAL INFORMATION
120
30 June 2024
$’000
30 June 2023
$’000
Declared dividend payout ratio
Interim dividend of 2.5 cents per share paid on 4 April 2024
5,746
5,755
Final dividend of 3.3 cents declared on 27 August 2024
7,721
8,156
Total dividend paid or declared
13,467
13,911
Divided by:
Operating NPAT
18,112
17,888
Declared dividend payout ratio
74.4%
77.9%
121
Integral Diagnostics
Annual Report 2024
122
The following is additional information required under ASX Listing Rule 4.10 and not shown elsewhere in this Annual Report. This
information is current as at 7 August 2024.
a. Top 20 shareholders – ordinary shares
Rank
Name
Number of
fully paid
ordinary shares
% of issued
capital
1
Citicorp Nominees Limited
42,793,666
18.29
2
J P Morgan Nominees Australia Pty Limited
39,158,798
16.74
3
HSBC Custody Nominees (Australia) Limited
38,626,662
16.51
4
HSBC Custody Nominees (Australia) Limited - A/c 2
4,678,603
2.00
5
Warbont Nominees Pty Ltd (Unpaid Entrepot A/c)
4,119,561
1.76
6
Washington H Soul Pattinson and Company Limited
4,087,223
1.75
7
HSBC Custody Nominees (Australia) Limited (NT-Comnwlth Super Corp A/c)
3,906,185
1.67
8
Citicorp Nominees Pty Limited (Colonial First State Inv A/c)
3,552,881
1.52
9
BNP Paribas Nominees Pty Ltd (HUB24 Custodial Serv Ltd)
3,407,901
1.46
10
New Imaging Pty Ltd (New Imaging A/c)
3,389,045
1.45
11
Lethean Holdings Pty Ltd (Howitt No 8 A/c)
2,944,760
1.26
12
Firbar Pty Ltd (The Howitt No 4 A/c)
2,357,230
1.01
13
J A Mullins Pty Ltd (James A Mullins Family A/c)
2,316,051
0.99
14
Masfen Securities Limited
2,250,000
0.96
15
Mittal Holdings Pty Ltd (Howitt No 12 A/c)
2,085,907
0.89
16
Mr Vincent Michael O'Sullivan (O'Sullivan A/c)
2,020,000
0.86
17
Wyndham Salter Pty Ltd (The Howitt No 10 A/c)
1,792,947
0.77
18
A & S French Pty Ltd (The AJ French Family A/c)
1,778,327
0.76
19
BNP Paribas Nominees Pty Ltd (Agency Lending A/c)
1,711,682
0.73
20
BNP Paribas Noms Pty Ltd
1,636,566
0.70
Total Top 20 Shareholders
168,613,995
72.07
Total Remaining Holders Balance
65,348,002
27.93
b. Register of substantial shareholdings
Shareholder
Number of
fully paid
ordinary shares
% of issued
capital
Yarra Capital Management Limited
20,362,716
8.72
Viburnum Funds Pty Ltd
16,105,036
6.88
Integral Diagnostics Limited
13,470,639
5.77
1. As a result of voluntary escrow arrangements entered into by IDX under the Company's Equity Incentive Plan and in connection with
acquisitions announced to ASX, the Company has a relevant interest in its own shares under section 608(1)(c) of the Corporations Act.
IDX has no right to acquire these shares or to control the voting rights attached to these shares.
2. Includes: Yarra Capital Management Limited; Yarra Funds Management Limited; Yarra Capital Management Holdings Pty Ltd; Yarra
Management Nominees Pty Ltd; AA Australia Finco Pty Ltd; TA SP Australia Topco Pty Ltd and TA Universal Investment Holdings Ltd.
SHAREHOLDER INFORMATION
123
Integral Diagnostics
Annual Report 2024
c. Distribution of shareholders – ordinary shares
Range
Total holders
Number of fully paid
ordinary shares
% of Issued
capital
1 to 1,000
1,798
793,311
0.34
1,001 to 5,000
1,915
5,146,155
2.20
5,001 to 10,000
692
5,063,668
2.16
10,001 to 100,000
732
20,343,935
8.70
100,001 and Over
122
202,614,928
86.60
Rounding
0.00
Total
5,259
233,961,997
100.00
d. Less than marketable parcels of ordinary shares
There are 462 shareholders holding less than a marketable parcel of ordinary shares (i.e. less than $500 per parcel of shares) based
on the Company’s closing share price of $2.49 at 7 August 2024.
e. Distribution of unquoted securities – performance rights
Range
Number of
performance rights
over ordinary shares
%
Number of holders of
performance rights
%
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
539,408
24.02%
12
66.67%
100,001 and over1
1,705,852
75.98%
6
33.33%
Total
2,245,260
100.00%
18
100.00%
1. All performance rights are issued under the Company’s Equity Incentive Plan. Dr Ian Kadish holds greater than 20% of the
performance rights: 858,583.
f. Distribution of unquoted securities – options
Range
Number of options
over ordinary shares
%
Number of holders
of options
%
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
397,760
43.81%
9
75.00%
100,001 and over1
510,230
56.19%
3
25.00%
Total
907,990
100.00%
12
100.00%
1. All options have been issued under the Company’s Equity Incentive Plan.
SHAREHOLDER INFORMATION
124
g. Voting rights
In accordance with the Company’s Constitution, each member present at a meeting, whether in person, by proxy, by power of attorney
or by a duly authorised representative in the case of a corporate member, shall have one vote on a show of hands and one vote for
each fully paid ordinary share on a poll.
Holders of performance rights and options do not have voting rights.
h. On-market buy backs
There is no current on-market buy back.
i. Securities subject to voluntary escrow
Class
Expiry Date
Number of fully
paid ordinary
shares
Ordinary
1-Sep-24
965,133
Ordinary
1-Nov-24
876,068
Ordinary
7-Nov-24
3,257,573
Ordinary
1-Jul-25
533,539
Ordinary
1-Sep-25
965,141
Ordinary
1-Nov-25
876,068
Ordinary
1-Jul-26
178,146
Ordinary
1-Nov-26
876,069
Ordinary
1-Jul-27
178,137
Total shares on issue subject to voluntary escrow
8,705,874
The above table details only those shares that are subject to voluntary escrow arrangements. It does not include securities issued
under an employee incentive scheme that have restrictions on their transfer such as a holding lock under the terms of the scheme.
The expiry date noted above is the date at which the escrow period ends under the terms of the relevant restriction deed. The
actual dates of release may differ due to the restriction deeds containing certain exceptions from the dealing restrictions, including
death/permanent incapacity, leaving the business and the Board applying discretion.
125
Integral Diagnostics
Annual Report 2024
Directors
Toby Hall – Independent Non-Executive Chair
Ian Kadish – Managing Director and Chief Executive Officer
Raelene Murphy – Independent Non-Executive Director
Andrew Fay – Independent Non-Executive Director
Ingrid Player – Independent Non-Executive Director
Company Secretaries
Nikki Dalle Valle and John Merity
Registered office
Suite 9.02 Level 9, 45 William Street
Melbourne, Victoria 3000
T + 61 3 5339 0704
Share registrar
Computershare Investor Services Pty Ltd
Yarra Falls 452 Johnston Street
Abbotsford, Victoria 3067
T 1300 787 272
Auditor
PricewaterhouseCoopers
Level 19, 2 Riverside Quay
Melbourne, Victoria 3006
Solicitors
Herbert Smith Freehills
Level 24, 80 Collins Street
Melbourne, Victoria 3000
Bankers
Westpac Banking Corporation
Commonwealth Bank of Australia
Australia and New Zealand Banking Group
Stock exchange listing
Integral Diagnostics Limited shares are listed on the Australian
Securities Exchange (ASX code: IDX)
Website
integraldiagnostics.com.au
Corporate Governance Statement
The Corporate Governance Statement was approved by the
Board of Directors on 27 August 2024 and can be found at:
www.integraldiagnostics.com.au/corporate-governance
ESG Report
The FY24 ESG Report will be published prior to our Annual
General Meeting on the Company's website:
www.integraldiagnostics.com.au/reports
CORPORATE DIRECTORY
126
NOTES
127
Integral Diagnostics
Annual Report 2024
NOTES
128
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