ASX BRIEFS

INTELLIGENT MONITORING GROUP (IMB) - Transforming Security Services: Intelligent Monitoring Group's Dennison Hambling on Strategic Acquisitions and Market Leadership in Australia and New Zealand

• Andrew Musgrave

Share episode

Send us a text

Get ready to be inspired as we sit down with Dennison Hambling, the Managing Director of Intelligent Monitoring Group, who shares the transformative journey of his company in the security and risk management sector. How do strategic acquisitions like ACG Integration and Everjazz propel a company to reclaim its industry leadership? Dennison unravels the story behind these bold moves and offers a glimpse into how IMG is leveraging renowned brands like ADT and Signature Security to set new benchmarks in Australia and New Zealand.

Prepare to gain insightful perspectives on the future of security services as Dennison discusses the substantial financial impacts of these acquisitions, projecting remarkable increases in both EBITDA and revenue. Learn why reinvesting in the local market and securing top-tier technical talent are crucial components of IMG's strategy for sustained growth. This episode promises to deliver valuable insights into the dynamic world of security services and the innovative strategies driving IMG's success. Don’t miss out on this engaging conversation that will leave you with a deeper understanding of the industry's evolving landscape.

Andrew Musgrave:

Welcome back to ASX Briefs, and today we have the pleasure of speaking with Dennison Hambling, the Managing Director of Intelligent Monitoring Group, which is known for their comprehensive security and risk management services and has recently made significant strides in expanding their capabilities through multiple acquisitions. Today, we'll dive into these developments and explore how they're enhancing their service offerings. Dennison, thanks for joining me and welcome to the podcast. Not a problem, thanks for having me. Now. Let's just start by getting you to give us an overview of the company, the core services that you provide and how you differentiate yourself in the competitive security market.

Dennison Hambling:

Yep, sure. So look, IMG has been listed for some time but is effectively the largest security monitoring company in Australasia, I should say, for, I guess, residential and commercial customers. You would know us through the brand ADT, which operates in Australia and New Zealand. We've also recently bought back the brand Signature Security, which is a famous brand in Australia in particular, but also a little bit in New Zealand. And we also have a business called IMG Connect which services our wholesale security companies. So they provide security monitoring services for businesses, houses and other security companies in Australia.

Andrew Musgrave:

Can you just talk us through the rationale behind these acquisitions and how they fit into the broader corporate strategy?

Dennison Hambling:

Sure. So look, I guess the differentiation piece is we have found in this journey that Australia and New Zealand too, were once for a leader, an industry leader, and that a lot of the old historic players that had at one time been leaders were owned by global multinationals and hadn't really reinvested in these markets. So that has appeared offshore, and so the thesis for us is that we're trying to recreate, I guess, 80-10, in particular back to industry leadership, which it once held. We're doing that at a time where technology, and certainly the latest technology, is now available to be bought in which really unlocks a service and a solution for customers at a value that they haven't had before. So for us to do that, we need really a combination of presence, and the Additive Brand gives us presence.

Dennison Hambling:

In particular, we need technology which we're able to bring in from overseas, and we also need really high-quality technicians and technical people who are focused in the security industry, and so the acquisitions we made are very much around enabling the solutions and the people side of the business. I think security as an industry in the last decade probably hasn't had any net new employment, and you've got as many people retiring as you have got coming into the industry. So it's a competitive market for labour. So the recent acquisitions have been around building our scale and mass of delivery and doing that very carefully with some really, really talented and smart people that have joined our business. So we're very excited to have them in and we see them as enabling transactions, enabling us to grow faster and do more and better work in customers.

Andrew Musgrave:

And with these acquisitions you've projected an increase in both the EBITDA and revenue. Can you just elaborate on these financial impacts and how they position ?

Dennison Hambling:

Sure, so look, we acquired the two businesses we announced at around just under three times EBITDA multiple. They contribute about 5.7 million of EBITDA c ombined with a 20 million plus revenue contribution. On a sort of assessment of memorised earnings, if you like, for those businesses, putting those with our current business takes us through to just a touch under $40 million of EBITDA pro forma. I guess what we're pointing to at the moment is that sort of a scale of what we have obtained today. But as we progress bringing these businesses into us and with, obviously, the other strategies and we've been doing prior to this, we would expect to deliver an EBITDA of almost $40 million in the new year. And so I think the other thing from a financial point of view that's notable is it continues this journey of the de leveraging that we've been on. We're now sort of sub-net EBITDA of two times on a pro-forma basis, and the next real event for us from a corporate point of view will be our refinancing, which I know people are looking forward to seeing us back onto a senior, secure sort of debt facility and being able to use our now brilliant and fairly substantial cash flow for either shareholder returns or further value addition.

Andrew Musgrave:

And with these acquisitions you've added many skilled technicians to the team. So how significant is the expansion for your operational capabilities, especially in the commercial security area?

Dennison Hambling:

Yeah, look, the key, what these acquisitions in particular bring us, is now an ability to say genuinely to our customers that we're national and you know and it was obviously New Zealand and so what, what the big end commercial enterprise customers are and we're looking for is for us to be able to say we can take on work, we can help you, upgrade and give you best practice. You know, know, global standard solutions, and it's with our people, and I think that the term one stroke to choke is sort of that here. You know, it has been difficult, if not impossible, for certainly large customers and these are large, you know, international, multinational, multi-site businesses to have that, and so these acquisitions in particular now give us the ability sort of to fast track that again, with the skilled, fabulous people that are doing the business, that we're going to be able to find increasingly more interesting and different work for as well. So they're pretty strategically important to us, accelerating our business in the future space.

Andrew Musgrave:

And if we look at the market position and competitive edge of the company, given your recent expansions and the integration of the new teams, how do you view your competitive position in the market and what advantages do you now hold?

Dennison Hambling:

Well, I think the first thing is the ADT business in prior years was held in very high regard in the commercial security space. They're very famous for the quality of their work and you can still go around existing customer sites today and see the wiring done in a very specific way, very, very cleanly put together business. And so the first advantage we have is we are known already for being a high-quality provider, and with the security system in particular. But as you go into access control and into your business operating systems, you don't want failure, so you really want a quality provider. And then, secondly, I guess that point around being it being a one-stop shop, because we use other platforms and technology and solutions that come to this, but one party that we can have as a proper partner to your business to do this, I think gives us a huge edge over the other players in the market and you know what we can build upon now. You know at some scale, as we, I guess. Then customers start to recognise our re-existance as a commercial player. I think those two things together and we certainly have more demand than we don't have a demand problem across our business. What we have is a delivery constraint and these types of acquisitions. These two in particular are all part of enabling us to be able to meet the demand that we're already seeing and have.

Andrew Musgrave:

And just to wrap things up, what are some of the key goals you're looking to achieve in the next sort of 12 to 24 months?

Dennison Hambling:

Yeah, look, I think the first comment is you know this business's genesis, or at least the team that exists today, has really been a turnaround. So it's been three years of work, hard work, to earn the rights to, you know, firstly, I guess, buy the ADT business and then to be able to acquire quality businesses like we've got. So we're very focused on delivering. We know we have to earn the rights. We think there's an opportunity here to create a significant business and a leading business. In terms of the sort of more immediate or next steps for our business, I think the refinance in particular is the key thing. It will allow us to, you know, utilise our cash flow, you know, to have an optimised balance sheet, to, you know, to create value and to reward shareholders, and I think that really will be the thing It'll be very accretive to earn. So, given the expensive debt we have at the minute which we had to take on to do the ADT deals part of the structure we needed to use to get this up, but thanks to the debt providers, but as we go more to a senior type facility, that'll lead to much higher sort of earnings translations as well. So I think you know a few steps is. You know we've got to continue to hit our marks. We were very happy to upgrade our guidance a couple of months ago off the back of the ADT work we've done. I think we're clear that you know we'll look to provide some guidance again as we get into the first half of the financial next year, for the next year, and we're very keen to make sure that we deliver upon that and keep building what we hope to become a very substantial high-quality services business.

Andrew Musgrave:

Well, there's plenty going on. There's been plenty of announcements, obviously, in recent times. So, Dennison, thanks for your time today. It's been great to chat and we look forward to further updates in the upcoming months.

Dennison Hambling:

Thank you Appreciate your time.

Andrew Musgrave:

That concludes this episode of ASX Briefs. Don't forget to subscribe and we look forward to catching you on our next episode.