How Integral Diagnostics’ Capitol Merger Propelled FY25 Growth and What’s Next?

Robust Financial Growth Driven by Strategic Merger

Integral Diagnostics Limited (IDX) has delivered a standout financial year for FY25, reporting revenue of $628 million, a 33.7% increase over the prior year. Operating EBITDA climbed 38.3% to $126.5 million, while operating net profit after tax (NPAT) surged 74.4% to $31.6 million. These gains were underpinned by the transformative merger with Capitol Health Limited, completed in December 2024, which significantly expanded IDX’s footprint and operational scale.

The merger added 65 clinics to IDX’s network, bringing the total to 145 clinics across Australia and New Zealand. This expanded presence is supported by approximately 460 radiologists and 3,000 employees, positioning IDX as the second-largest diagnostic imaging provider in Australia by clinic volume. The integration has already yielded $7 million in cost synergies within six months, with total synergies expected to reach $14 million by the end of 2025.

Strategic Focus on Innovation and Operational Efficiency

IDX is leveraging its scale to drive organic growth through several key initiatives. Radiologist recruitment and productivity remain a priority amid ongoing workforce shortages, particularly in regional areas. The company is also accelerating the use of its market-leading teleradiology business, IDXt, which now engages 114 radiologists and continues to grow rapidly, alongside expanding artificial intelligence (AI) integration to enhance diagnostic accuracy and operational efficiency.

Regulatory tailwinds are supporting growth, including Medicare indexation of 2.4% for diagnostic imaging services starting July 2025, deregulation of MRI licensing, and the launch of the National Lung Cancer Screening Program. These factors, combined with demographic trends such as an aging population, are expected to sustain demand for advanced imaging modalities like PET-CT and MRI.

Dividend and Balance Sheet Strength

Reflecting its strong cash flow generation, IDX declared a fully franked final dividend of 4.0 cents per share, bringing total dividends for FY25 to 6.5 cents per share, up from 5.8 cents in FY24. The company’s balance sheet remains robust with net debt to operating EBITDA at 2.6x, slightly improved from 2.8x at the end of 2024, and ample liquidity with $118.6 million in undrawn committed facilities.

Leadership Transition and Outlook

In a significant leadership development, CEO Dr Ian Kadish announced his intention to retire at the end of FY26 after eight years at the helm. Dr Kadish has been instrumental in growing IDX from a regional player to a market leader. The Board is actively searching for a successor to continue the company’s growth trajectory.

Looking ahead, IDX plans to maintain its momentum by focusing on organic earnings growth, further integration of Capitol, and continued investment in technology and sustainability initiatives. The company also faces ongoing challenges including inflationary pressures and workforce constraints but remains well positioned to capitalize on industry consolidation and technological advancements.