In today’s briefing:
- Capitol Health (CAJ AU): Binding Merger with Integral Diagnostics (IDX AU)
- Capitol Health (CAJ AU)/Integral Diagnostics (IDX AU): An Improved Image – Now Firmed
- Mount Gibson (MGX AU): Q4 Production Report And Guidance Disappointing, But Mkt Cap = Net Cash
- Globe Metals & Mining Ltd – Economics Improved, Progressing to DFS
- Kinatico Ltd – FY24 NPAT up 225% and 60% ahead of RaaS forecasts
- Kinatico (ASX:KYP) Georg Chmiel Interview
Capitol Health (CAJ AU): Binding Merger with Integral Diagnostics (IDX AU)
- Capitol Health (CAJ AU) has entered a binding merger proposal with Integral Diagnostics (IDX AU) at 0.12849 Integral shares per Capitol share.
- The transaction will require approval from the ACCC and Capitol shareholders. Due to the minimal geographic overlap, ACCC clearance should be forthcoming.
- The offer is attractive compared to historical exchange ratios, trading ranges and peer multiples. At the last close, the gross spread was 8.0%.
Capitol Health (CAJ AU)/Integral Diagnostics (IDX AU): An Improved Image – Now Firmed
- Back on the 17th June, diagnostic imaging provider Capitol Health (CAJ AU) announced it had entered into a process deed with Integral Diagnostics (IDX AU). Terms are now firmed.
- IDX will issue 0.12849 new IDX shares for each Capitol share. Scrip terms are unchanged from that announced previously. Upon completing the transaction, Integral would hold 63% in the NewCo.
- Apart from ACCC signing off, this transaction looks priced to complete.
Mount Gibson (MGX AU): Q4 Production Report And Guidance Disappointing, But Mkt Cap = Net Cash
- Mount Gibson Iron (MGX AU) reported a disappointing Q4 FY24 production report. Volumes were inline, but provisional pricing impacts of ~20% brought a quarterly cash outflow of one mn AUD.
- Volume guidance for FY25 was light at 2.7-3 mn tons (vs. 4.1 mn in FY24). Net Cash rose to 436 mn AUD (excluding Fenix Investment), almost equaling the market cap.
- FY24 results are due on 21st August 2024, when the board will recommend a dividend. Net cash and future cash flows should support the share price in the long run.
Globe Metals & Mining Ltd – Economics Improved, Progressing to DFS
- RaaS Research Group has produced an update report on niobium-focused Globe Metals & Mining (ASX:GBE).
- GBE has continued metallurgical work for their chlorination process with results (20 March 2024) demonstrating the ability of the process to produce high purity Nb205 at a lab scale.
- The results showed an extraction and separation rate of 99% for niobium and tantalum as well as 94% for rare earth elements (REEs).
Kinatico Ltd – FY24 NPAT up 225% and 60% ahead of RaaS forecasts
- RaaS Research Group has published an update report on ‘Know Your People’ regtech company, Kinatico (ASX:KYP) following its Q4 FY24 result which confirmed the company delivered NPAT of $0.8m for FY24, up 225% on FY23 and 60% ahead of our forecast.
- Q4 SaaS revenue jumped 40% on the pcp to $2.8m and was 12% ahead of Q3 and was ahead of our expectations.
- Transactional revenue of $4.5m for the quarter was flat on Q3 and down 12% on the pcp.
Kinatico (ASX:KYP) Georg Chmiel Interview
- RaaS Research Group recently interviewed Kinatico Non Executive Director Georg Chmiel on what attracted him to join the KYP board in September 2023.
- We discussed the merits of platform businesses and his experiences with technology platform companies.
- Mr Chmiel noted the merits of recurring revenues, including higher margins than one-time or transactional revenue, and lower costs as the platform becomes more scalable.
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