Key highlights of IPD Group's half-year financial report

IPD Group Ltd (ASX: $IPD) has reported a statutory after-tax profit of $9,545,000 for the half year ended 31 December 2023, marking a significant increase from $8,022,000 in the corresponding period of the previous year. The company's Directors declared an interim dividend of 4.6 cents per share fully franked, with an ex-dividend date of 27 March 2024, record date of 28 March 2024, and payable on 10 April 2024. IPD Group's sales revenue of $120.7 million for the half year was up 8.8% compared to the prior corresponding period, while gross profit of $48.3 million increased by 15.8%. The company also completed two strategic acquisitions during the period, further strengthening its market position and expanding its product suite.

Executive commentary on IPD Group's performance and strategic initiatives

The IPD Group Board of Directors are pleased to advise a record half-year performance for the six months ended 31 December 2023. The acquisition of EX Engineering and growth in daily trade business resulted in stronger gross profit margins for the Group during 1H FY24. The strategic acquisition of CMI Operations, a leading distributor of electrical cables and manufacturer & distributor of plug brands in Australia, further enhances our product suite, increases supplier diversity, and strengthens our overall value proposition with existing customers. We are also enhancing our EV infrastructure team by merging Addelec and Gemtek to capitalize on the growing EV infrastructure market. These strategic initiatives have contributed to a 120 basis point improvement in Underlying EBIT margin to 11.6% for the half year. We remain committed to achieving high corporate governance standards and recognize the importance of maintaining strong governance practices.

Summary of IPD Group's outlook and financial position

IPD Group's outlook remains positive, with expectations of significant projects commencing in the second half of the year. The company's net assets stood at $142.7 million with no borrowings on its balance sheet as of 31 December 2023. Following the acquisition of CMI Operations, IPD entered into a new $40 million debt facility to partially fund the acquisition, resulting in a net debt of $23.7 million as of 31 January 2024. The Group's cashflow conversion was up 11% on the prior corresponding period, with operating free cash flow conversion at 50% for the half-year ended 31 December 2023. The company paid a fully franked interim dividend of 4.6 cents per share, reflecting a payout ratio of 50% for the half-year. IPD Group's strategic acquisitions and focus on operational efficiencies position it well for continued growth and value creation in the coming periods.