IMDEX Limited

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Managing Director’s Report

Bernie Ridgeway
Managing Director

Dear Shareholders,

I am pleased to provide our shareholders with IMDEX’s Annual Report for the financial year ending 30 June 2017 (FY17).

Market Conditions

Conditions within the global minerals industry were positive for our company during FY17. Access to funding and commodity prices are traditionally the biggest drivers on activity levels in the minerals sector and it is pleasing to note both are currently favourable.

Resource companies, large and small, are well-funded and commodity prices have been slowly moving in a positive direction.

We witnessed the beginning of the recovery in the minerals market in 4Q16, which was largely due to the stronger gold price and associated capital raisings, however since that time, it has become a broader-based recovery. We are confident we are in the early stages of a cyclical upswing, which is supported by increased activity in all major mining regions globally.

In addition to funding and commodity prices, the uplift in activity is being driven by a fundamental need to replace reserves. Mining companies are depleting reserves at a faster rate than they are replacing them resulting in increased exploration budgets. The Major Gold Discoveries and Major Copper Discoveries graphs sourced from S&P Global Market Intelligence on page 13 of this report, illustrate this point.

Mine Digitisation

Another key observation regarding our market conditions is the pace in which new technologies are gaining momentum within our industry to drive efficiencies and productivity. Resource companies and service providers are harnessing digital technology to ensure better, faster and safer mining. For instance, advanced sensing technology and real-time operational data are being used to inform decision-making. Equipment is being automated for increased productivity, while predictive algorithms are enhancing the precision and speed of operations.

We are excited and proud to be collaborating with such progressive companies to transform their operations and our industry as a whole.

Financial Performance

We exceeded our financial targets for the year, achieving a 23% increase in revenue and a 55% increase in EBITDA. This positive outcome was due to improving market conditions globally, our regional expertise and further market penetration for our differentiated technologies. Further information regarding our revenue and earnings can be found on pages 16 to 19 of this report and our 2017 Financial Report. It is also pleasing to note our operating cash flow from continuing operations for FY17, prior to financing costs, was $20.7 million – this represents a 107% increase on the normalised equivalent in FY16.

As at 30 June 2017 our balance sheet was in a stronger position than the previous corresponding period - net assets had increased by $44.2 million and we had net cash of $12.3 million.

The balance sheet was strengthened by a capital raising whereby we issued approximately 81.82 million shares at a price of $0.55 per share to raise $45 million. The share issue was significantly oversubscribed and the funds raised were applied to debt reduction.

As announced to the market on 28 December 2016, we also secured a $30 million banking facility with Bankwest to replace the Bain Capital facility (formerly Sankaty Advisors LLC), which attracted an interest rate of 10.75%.

The Bankwest facility currently has attractive terms and as at 30 June 2017, was drawn to $7.1 million. This facility reduces by $1.0 million per quarter.

Operating Achievements

During FY17 we continued to strengthen our product and service offering for the global minerals industry – the key operating achievements included:

  • The sale of wholly owned oil and gas businesses - IMDEX is now a 100% minerals focused business;
  • An increase in the number of REFLEX instruments on hire;
  • Continued investment in research and development resulting in the commercialisation of new technologies;
  • The continued globalisation and growth of AMC;
  • Our internal digital transformation project; and
  • Rebranding to align with our IMDEX solution selling and company vision.

Sale of Wholly Owned Oil and Gas Businesses

During the second half we completed the sale of our wholly owned oil and gas businesses - AMC Oil & Gas and Wildcat Production Chemicals Australia - in line with our strategy of focusing on sustainable earnings growth via our minerals business. We also wrote-off $3.2 million associated with our oil and gas technology.

All material costs associated with the divestment of these businesses were accounted for in the 2016 financial year and a non-recurring benefit of $2.1 million was recorded in FY17.

REFLEX Instruments on Hire

Our REFLEX rental fleet has traditionally been a lead indicator of market conditions within the minerals industry – as more rigs return to work, more instruments are required. As at 30 June 2017, the number of REFLEX instruments on hire was up 42% compared to 30 June 2016. The increase in demand was for traditional survey and core orientation instrumentation, together with our more recent technologies, which generally yield higher rental rates due to the additional value they provide clients.

It is also pleasing to note that our REFLEX instruments on hire increased in calendar 2014 to calendar 2016, despite significant decreases in exploration expenditure over those three years. We believe this is affirmation of our differentiated technologies.

Research and Development

In line with our commitment to delivering leading real-time technologies, we continued to invest in research and development, which resulted in the commercialisation of new products for our clients. A good example is the release of our IMDEXHUB-IQ™ early in the second half of FY17.

This complete Software-as-a-Service solution for the collection, storage and reporting of critical operational, geological and assay data, provides us with a significant advantage over our competitors. I am also pleased to report that there have been a number of examples where clients have chosen IMDEX technologies over competitors due to our connectivity and the ability to view data from anywhere, anytime.

Our commitment to ongoing research and development throughout the cycles has also resulted in an exciting pipeline of solution sets spanning exploration, development and mining. The development of these IMDEX solution sets, which incorporate AMC and REFLEX products and technologies, are designed to improve our clients operations and provide more sustainable earnings growth for our shareholders.

Digital Transformation Project

Consistent with the differentiated technologies and cloud capability we are delivering to the minerals industry, our company is undergoing an internal digital transformation. This is an exciting project that will enhance our systems and processes – and importantly, will allow us to significantly improve our customer service and business outcomes.


We are excited to officially launch our new branding and logos on 10 October 2017.

Over the past 3 – 4 years we have been successfully repositioning ourselves as a technology company with a vision of being the leading provider of real-time subsurface intelligence solutions to the global minerals industry. This transformation commenced with the acquisition of ioGlobal and our ability to connect our market leading technologies to the IMDEXHUB-IQ™ to provide accurate and timely data.

Our rebrand was undertaken to align our corporate branding with our company’s vision and focus on IMDEX solution selling.


The outlook for IMDEX remains positive and we anticipate a stronger financial performance in FY18. The global minerals industry is in the early stages of a cyclical upswing and activity has increased across all major mining regions. Furthermore, across the industry there remains a fundamental need to replace diminishing reserves; resource companies are generally well-funded; and new technologies are gaining momentum within the industry to drive greater efficiency and productivity – we are delivering these real-time or near real-time technologies and have a significant first mover advantage. Our company is committed to maintaining this advantage through its investment in research and product development during FY18.

A Great Team

We have an expert and highly capable team of people who combine their skills to work together for the benefit of our company. It is a pleasure to work with them all. 

Looking after our employees is vital and we will be focusing on improving our safety performance in FY18 and beyond.

To all of IMDEX’s team – our shareholders, employees, clients and industry partners – thank you for your dedication and for being part of our business during FY17. We remain committed to achieving our vision of being the leading provider of subsurface intelligence solutions to the global minerals industry.

Kind regards

Bernie Ridgeway
IMDEX Managing Director