[Updated] Intelligent Monitoring Group: Questions to Dennison Hambling | Value Bridge

Everything Dennison Hambling said in just 41 min

Business Summary

Intelligent Monitoring Group (IMG) is Australasia’s largest security monitoring and services business, operating under the globally licensed ADT brand. The company delivers electronic security, video guarding, and care solutions to commercial and residential clients across Australia and New Zealand, serving 200,000 customers. IMG generates about $6.5 million in monthly recurring monitoring revenue (approximately $80 million annually) plus $6 million in additional commercial work. The business maintains an adjusted EBIT margin of 26.7 percent, holds a cash balance of $11.7 million, and has net debt of $68.3 million against pro forma EBITDA in excess of $40 million.

Catalysts & Milestones

2023 - Completion of ADT Australasia acquisition and integration into IMG platform

2024 - Targeted shutdown of 3G network for residential customers, completing 3G–4G transition

2024 - Cash balance of $11.7 million after AAG and ACG acquisitions

2024 - Delivered FY24 adjusted EBITDA of $34.8 million, exceeding upgraded guidance

2024 - AGM scheduled to provide refinancing update on net debt and facilities

2024 - Conclusion of tax payment plan and recognition of tax losses on the balance sheet

Investment Highlights

• Subscription monitoring generates about $80 million in annual recurring revenue

• Serves approximately 200,000 customers across Australia and New Zealand

• Maintains an adjusted EBIT margin of 26.7 percent

• Net debt position of $68.3 million against pro forma EBITDA > $40 million

• Cash balance of $11.7 million as of June 30, 2024

Future Growth Drivers

• Expansion of video guarding technology, upselling to cohorts with fourfold unit economics improvement

• Rollout of advanced AI-enhanced video monitoring to process raw video data efficiently

• Continued national footprint expansion through strategic acquisitions of $6–$12 million businesses funded by refinanced debt facilities

• Growth in aging-in-place care kits leveraging the ADT Care platform in the NDIS market

• Increased penetration of high-value commercial contracts in data centers and large enterprises

Risk Factors

• Integration complexity of acquired businesses could delay expected synergies, affecting 3.5× earnings acquisition pricing discipline

• Limited franking credits due to significant tax losses may delay dividends or buybacks

• High customer churn of 10 percent in the residential segment may pressure subscription growth if DIY trends accelerate

• Supply chain and forex fluctuations impacting hardware costs from Europe and Asia

• Competition from established peers using legacy platforms may pressure market-share gains

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Capital Allocation

03/09/2024 Is there scope for further acquisitions?

Yes, 100%. The industry is fragmented with a few large players who have underinvested or are pulling back, like ADT. After a decade of little consolidation, many smaller high-quality businesses exist, often owned by people nearing retirement or succession. We want to be seen as a good home for these businesses and work hard to integrate teams, offering long-term career opportunities. We are strategic and not a roll-up play. While we may do a lot of M&A, we are building a solid platform that could stand on its own without needing to raise money. Investors would be rewarded for that.

14/11/2024 How does the current strategy, including recent acquisitions and equity raising, fit with your previous statements about rollups, deleveraging, dividends, and buybacks?

I have said before that we are very aware of what a rollup implies, a company doing a bunch of acquisitions and blowing up, but we are not one of those. Our focus is on integrating and building a business with a clear purpose, structure, and growth plan. Delivering organic growth this year is important because it shows the businesses we've combined have added value, unlike just throwing businesses together. We have reduced leverage as planned, hitting all the targets we set during our recapitalization. There remains opportunity to add to the portfolio where it makes sense, but we won’t buy just for the sake of buying. The recent acquisitions have been less complex IT-wise and more people-focused, and we are working hard to bring teams together and create a consistent culture.

We generate strong cash flow and will use it accordingly. While we have many tax losses, which limit franking credits, this also means less cash outflow on taxes when we do generate profits, as losses offset taxable income. The board has not made decisions yet on capital initiatives like dividends or buybacks, but we do not need to deleverage further immediately and will continue to do so with cash flow. Franking credits won’t be a feature soon, but buybacks might be. After three years to reach this point, I’m focused on the next three years and see a path to potentially joining the ASX 300 if we choose. This is not about prestige but about providing professional service and gaining recognition. Scale and size benefit us, and while the word "rollup" triggers caution, we are committed to avoiding a messy business and ensuring solid results.

15/04/2025 How is IMG thinking about capital allocation and has the strategy changed since you became CEO?

When I took over, the primary focus was driving cash flow and cash returns, despite some accounting noise that may have obscured that. Our capital allocation strategy hasn’t changed much, we’ve been disciplined about acquisition pricing, not paying above about 3.5 times earnings for businesses we acquire. Now that we’ve refinanced our debt, we’re starting to consider competing uses of capital such as share buybacks and potentially dividends in the future. However, because we have significant tax losses and no franking credits yet, dividends are less attractive to Australian shareholders at this stage. We believe we are undervalued compared to global peers and are still focused on growing our footprint and adding value rather than returning capital. We generate good cash flow now and will assess the longer-term capital allocation strategy over the next six to twelve months. The board has not yet deeply discussed this, but we want to ensure we don’t under-invest given the strong growth opportunities and our leading market position.

15/04/2025 Are there more acquisitions planned and how will IMG fund them?

We are focused on building out our national footprint by acquiring quality, long-term businesses at attractive prices. There is a strong pipeline of such businesses that fit strategically and bring incremental work. For example, our recent acquisition of Kobe in Queensland has already won bigger, higher-quality contracts thanks to being part of our group. We fund acquisitions primarily through debt; we have refinanced our debt facilities and our bankers are comfortable lending for growth. We generate sufficient cash flow, so we don’t expect to need equity capital for typical acquisitions, which tend to be in the $6 t$12 million range. For larger strategic acquisitions in the $50 to $200 million range, we would consider raising equity, but nothing imminent is planned. We are patient and only pursue acquisitions that make strategic and financial sense without risking the business.

27/07/2025 How are you approaching capital allocation between buybacks, dividends, acquisitions, and reinvestment?

I would refer to the equity raise slide from September last year showing our acquisition track record. We continue to buy high-quality businesses at around three and a half times EBITDA, and these grow faster under our ownership. I remain disciplined on value. While acquisitions make sense and deliver benefits, we must weigh them against our ability to deploy capital well.

We may generate more cash than we can deploy sooner than expected. I also remember the 1987 crash and the GFC, where liquidity needs created opportunities. I want us in a position to act immediately if something similar arises. I see capital flexibility as costless insurance for shareholders, including myself, to maximize opportunities.

26/08/2025 How are you managing gearing and capital allocation, given the tax position?

We are comfortable with current gearing. Our business has multiple layers of recurring revenue, making it defensive and sustainable, so we are not looking to increase leverage. The key issue now is resolving our tax position. Grant Thornton has advised us that past tax advice may not have been sufficient, particularly regarding the same business test after ownership changes. This may affect our ability to use prior year losses, which is delaying audited results. Early modeling shows some potential benefits, but the overall tax position is not yet clear.

Because of this, dividends are currently the least efficient use of capital due to a lack of franking credits. We set up a buyback facility to be able to act quickly if market conditions allow us to repurchase shares at attractive levels. At the same time, we continue to see high-return opportunities to deploy capital into the business and M&A. Over time, as those opportunities are outgrown, returning capital to shareholders will become more relevant. For now, we are conservative and cautious, with supportive banking partners, and will adjust our approach as we move into the next phase of growth.

27/10/2025 What criteria must be met before you decide to pursue another acquisition?

There are really only a couple of things we would look for now. The first is opportunistic, if something fits what we do, is accretive, and adds value without overstretching us, we will consider it. We are not chasing acquisitions for the sake of it.

Beyond that, two criteria stand out. One is diversification. Our monitoring centers already manage many services, so if we can leverage that capacity into a related area, such as fire monitoring, which we already do and which remains an attractive industry, we would look at it. The other is international expansion. Our unique, high-value service is gaining traction overseas, so if the right asset and structure emerged, we would consider that too. Otherwise, we are not actively searching. Some regions in Australia could use more scale, but there is nothing specific on the radar. We’re strong in Western Australia and other core markets, but we’ll only act if the right opportunity comes to us.

27/10/2025 How are you able to acquire companies at three to four times EBITDA while others pay higher multiples?

There is competition, for example, private equity recently bought a Sydney business at around seven to eight times EBITDA. It’s a quality business, but we are disciplined and won’t overpay. If valuations rise beyond what makes sense, we simply won’t participate. Unless the value is clearly demonstrable, around three and a half times EBITDA in our hands is our benchmark. If a seller expects more, we usually end the conversation immediately.

We’ve walked away from several deals because of this. I’ve seen what happens when capital floods in and prices get bid up. That’s not something I’ll allow while I’m here. We will not chase prices. The three-to-four-times range is firm, with minor flexibility for exceptional quality. And if someone truly wants to participate in this space, honestly, they’d probably buy us instead. Private equity and industry players approach us regularly, recognizing that IMG’s model and execution are unique. My focus remains on building a great, enduring business; if that creates significant value, others may eventually price it accordingly, but that’s not our goal today.

27/10/2025 How does this tax issue influence your thinking about buybacks versus dividends?

Because we still have tax losses, we haven’t been generating tax credits that can be passed to shareholders. In Australia, dividends are most efficient when they carry those credits, otherwise investors effectively pay tax twice. Until those credits build up, buybacks are the better way to return capital. That’s why we initiated a buyback last year, both for efficiency and as a tool to protect downside if markets turned.
As our tax position normalizes and we begin paying tax, we’ll start accumulating credits that make dividends efficient again. The board hasn’t made a decision yet, but it’s likely that dividends will start sooner than initially planned. That shift would mark an important step toward being viewed as a “proper” company in the Australian context, which investors tend to value highly.

Competition

15/04/2025 How do Wilson, Chubb, and IMG differ, and who is winning or losing market share?

Wilson started as a car parking operator and expanded into physical security with guards and patrols. They have a large presence but operate mainly in labor-intensive security, which is different from our focus on electronic security that minimizes labor. We see Wilson more as a company to disrupt with our video guarding technology rather than a direct competitor. Chubb is our closest competitor in Australasia, with a stronger focus on fire monitoring and servicing alongside security. They are slightly larger than us but we are rapidly gaining ground. Both Chubb and we use similar monitoring platforms, though we are upgrading ours to global leading standards. Other players like Securitas have a smaller presence here compared to Europe. The market remains fragmented with many regional players. Security services in Australia are a $5 billion market, plus about a fifth more in New Zealand, but there is no clear national leader. Our strategy has been to build a national footprint through acquisitions, enabling us to offer national services with better efficiency and value. This footprint will support deploying the latest technology and expanding further.

27/10/2025 Do you see untapped pricing power in the business that could be leveraged in the short to midterm?

The main challenge is pricing correctly. Historically, we sold a low-value product and priced it accordingly. Now, with our end-to-end service, control room, front-end technology, and direct police integration, we’re delivering true security. Customers can literally protect their families and homes in a way that’s fundamentally different from before. The key question is: what is that worth? One of our partners warned us not to underprice it, saying we might not yet appreciate its full value.

When customers understand what we do, price is rarely a sticking point. There’s real pricing power here, but we need to be patient, tell the story well, and hold value rather than chasing early adopters with discounts. For example, we’re already protecting homes worth tens of millions of dollars, and $120 to $130 per month for full monitoring is negligible at that level. The industry has shifted from selling a product to selling true security. We’ll refine our pricing as the market matures, but my instinct is that value, and therefore pricing, will trend higher. The question is whether we aim for full market penetration or a smaller, high-value segment.

27/10/2025 Has adapting the pricing strategy internally been challenging as the business evolves?

Yes, very much so. The biggest challenge has been internal, teaching our own people to sell a service rather than a product. We’ve had to retrain and refocus on the right conversations with customers. Over the past six months, and especially in recent weeks, we’ve made huge progress. Our team now understands how to frame value, which has significantly improved sales performance and upselling. It’s been a learning curve, but we’re moving rapidly in the right direction.

Competitive Advantage

23/11/2023 Is the commercial business a higher or lower multiple than residential, based on ADT’s recent sale of their fire and commercial business at 11.2 times?

I find commercial business more interesting because it offers easier levers, better profitability, better cash flow, and quicker growth. There is less competition and a more mature market for services. The two segments are fairly similar, though residential has many customers paying smaller amounts across a fixed cost base, which provides recurring cash flow but requires chasing more bills if payments stop. Other countries separate these segments, but I don’t think it works well. We provide security services under one central brand, leveraging ADT’s quality commercial work to rebuild our brand so residential customers recognize ADT as smart and market-leading.

01/09/2024 How is the company positioned in terms of leadership, workforce, and technology?

We have national coverage with 96 highly qualified security technicians in Australia and 40 in New Zealand, providing a strong platform and comparative advantage. Our big commercial customers value our openness to technology and our leading operating platform, which integrates new technologies and solutions. We are focusing on improving supplier relationships to secure good terms and collaborative solutions that benefit customers. We continue to improve and simplify back-office operations while maintaining a strong front-end focus. Refinancing debt remains a priority, and we remain open to opportunities, including M&A, which has proven valuable and created shareholder value.

04/11/2024 What is the difference between traditional alarms and video verification in security monitoring?

Traditional alarms typically trigger a sensor, which often results in false alarms about 95% of the time, leading to costly guard dispatches that may not be effective. Video verification allows the event to be triggered and verified by a camera, which can act as the sensor itself. This enables live viewing and immediate verification, allowing police to respond quickly if the event is real. This technology is more effective and cost-efficient, preventing unnecessary guard dispatches and improving response to actual incidents.

04/11/2024 How has guard technology evolved, and what is Intelligent Monitoring Group’s approach with its new Guard service?

While many cameras exist in cities, most only record events for later review, which limits their usefulness. IMG’s Guard service uses live video monitoring with AI-graded control rooms to replace traditional guards. This approach is about half the price of having a person on-site and twice as effective at detecting and responding to criminal activity in real-time. The company is competing directly with traditional guarding services by leveraging technology to provide better security outcomes.

14/11/2024 What is the difference between the current commercial security monitoring service and the new guarding service?

Today, if you buy an alarm system, it alerts you if there’s a problem, but you don’t know what triggered it, like a submarine radar showing a blip without identifying it. You either check yourself or we send a guard. Police usually won’t respond because 95% of alarms are false. With the new guarding service, including video cameras and patrols, we can verify events automatically. Our A1-graded control rooms are bomb-proof and resilient, allowing us to monitor events 24/7 and call police more efficiently, which helps reduce crime and catch offenders. This service costs a bit more upfront but reduces false callouts and associated costs, making it cheaper and more effective overall.

15/04/2025 How does IMG compete with Chubb and what is the role of the new board member from Chubb?

At the core, this is a service business where success depends on delivering reliable service at a price customers are willing to pay. Technology is a key differentiator. When I joined, the industry was lagging because major players like Chubb and ADT were using very outdated operating platforms, think 1980s pre-wireless era systems. We have invested heavily to modernize our control rooms and adopt leading global technology, especially around video integration. Video is a game changer, not just for security but for broader applications, allowing centralized live monitoring and fundamentally changing the economics of security. The new board member with Chubb experience brings valuable insight, but our competitive edge lies in our advanced technology platform and ability to connect with IP devices and edge AI technologies. The industry is slow to change, but we believe we currently hold a technology advantage over peers.

15/04/2025 Who is winning or losing market share in the security services market and why?

I believe IMG is the market leader now. Since acquiring ADT, we have grown its revenue from about $2 million to over $5 million per month within 18 months. Three years ago, we were virtually unknown in the industry; now we are recognized as a key player, even delivering the keynote speech at the industry conference. While we respect our competitors, none have our national footprint or technological advantages. Securitas, with its global strength, and Sapio, recently privatized from Telstra ownership, are well-positioned to do well. Seacom remains strong. However, some older companies like Chubb and Honeywell, despite their brand recognition and safety reputation, may struggle with technology adoption. Overall, the environment is mixed, but we are currently setting the pace.

27/10/2025 How much of the AI technology you are implementing is proprietary versus third-party?

It’s all third-party. We are essentially a reseller and service provider, so our goal is to match the best technologies to our customers. However, we’ve secured an element of exclusivity around parts of our product stack to help us build an early comparative advantage. That should strengthen our brand presence and position us well as the market develops.

Growth

23/11/2023 Do insurance companies recognize the value of monitored alarms and offer discounts, especially from a residential perspective?

Yes, some insurance companies do offer discounts for monitored alarms, but it’s inconsistent. Sometimes they don’t tell you, and sometimes you have to ask. Some are explicit when you take insurance, asking if you have a monitored alarm, but you need to clarify what that means. There is definitely value, especially for businesses and commercial customers, but also for residential consumers. For example, having an A1 grade means we operate in bunkers, so if Opus goes down, we can switch to Telstra security service on your property. Insurers should give discounts for that. Given recent Opus outages, this point is more relevant now than it was three weeks ago.

15/04/2025 How is IMG’s subscription revenue growing amid economic slowdown concerns?

The Australian economy is still stable, with an election upcoming but no major economic impacts yet. New Zealand has experienced a recession on and off over the past year, creating a tougher environment there. Interestingly, tougher economic conditions can increase demand for security as concerns about protection and crime rise. Historically, we have not seen a correlation between economic cycles and subscriber numbers. The first year after acquiring ADT was focused on turnaround and completing a major 3G network upgrade. Now, we are shifting to growth, targeting high-value, high-margin customers with advanced camera products. This means total customer numbers may grow slower than revenue and profitability, but the business remains stable with low churn despite economic conditions.

26/08/2025 Can you discuss the childcare opportunity?

We see childcare as significant for two reasons. First, we have been working with Goodstart Early Learning for over a year. Progress was initially slow given their nonprofit roots, but recent events have accelerated their adoption, and we are also receiving inbound interest from small operators and discussions with larger players. Some are fast-tracking adoption, while others are disappointingly waiting for government direction. Our solution is scalable and proven: we install cameras, use AI to track children, identify behaviors, and report in a safe way that protects data and allows parents to opt out. If parents do not want their child identified, our AI can automatically black them out.

The bigger picture is the shift in public perception. Privacy concerns are real, but safety has become the priority. As childcare demand has risen, other industries such as retail have also moved to accept camera-based surveillance to protect staff. Ultimately, childcare could represent around 10% of our business. It is a meaningful vertical, but no single sector will dominate given the scale of opportunities across our portfolio.

27/10/2025 How do you plan to capture the $9 billion addressable market and reach 30% market share?

The $9 billion number comes from analysing the markets where physical labour is used today and where our cameras and AI, particularly our live video monitoring product, ADT Guard, can replace labour and find new applications. It’s bigger than the traditional intrusion and access control market because we’re now competing in different industries; we will reduce prices in those industries and take only a portion, which is how we estimated the opportunity.

There is no single dominant service leader today, and in professional-service-type markets a successful leader often ends up with 20 to 30% market share, so that’s the lens we used. We’re being transparent: we don’t have a month-by-month playbook that guarantees it, and we don’t expect the market to be $9 billion in three years. The path is organic, execution-focused and opportunistic on acquisitions, it’s about execution, delivery, customer satisfaction and education so adoption accelerates over time. We’re in a penetration phase, similar to early pay-TV rollouts: first thousands, then tens or hundreds of thousands of sites as customers learn the product exists and recognise the protection and cost benefits.

27/10/2025 Will you ever try to expand internationally, and what criteria would you use for that expansion?

Over the last year, I’ve realised we’re unique globally. At a Canaccord global growth conference in Boston, an investor asked what differentiates ADT in Australia and New Zealand from ADT or Verisure elsewhere. The answer is simple: we catch criminals. Our live video monitoring service is a true end-to-end security solution, not just technology. Others will build similar systems over time, but we’ve integrated the full service first as a branded, scaled player.
Would we expand internationally? Yes, if the right opportunity arose. But Australasia is full of companies that expanded too aggressively, so our bar is very high. We wouldn’t start from scratch, we’d acquire an existing, cash-flow-positive business with strong local presence, solid fundamentals, and a structure similar to ADT when we acquired it. We’d need to prove to shareholders it’s accretive on day one and that we can deploy our live video monitoring product within six months. Our board already has deep global experience, so we’re confident but cautious; timing and clarity of execution would be critical.

Financials

23/11/2023 Will the working capital adjustment be returned to IMG upon completion of the ADT or New Zealand business, and what is the sum from the quarterly update?

We are finalizing the balance sheet and negotiated sensible working capital adjustments in the deal. The purchase was $45 million with $37 million in cash to buy the add-on transaction, which initially was a $200 million deal. Regarding creditor payments, we control the bank accounts and approve everything, but JCI’s teams handle the creditors, so there is significant work to unwind that. We expect the result to broadly align with what was indicated in the deal, and I see no reason for it to differ. The cash flow statement from the last quarter included all transaction costs, which are now behind us.

11/07/2024 What is the go-to-market plan for commercial customers, including sales cycle, contract value, recurring components, and margins?

The commercial market involves a lot of tender activity, but that’s not where we primarily play. When ADT exited commercial IT services, they left behind monitoring contracts, which we still manage. We have historic relationships and are rebuilding our network, reassuring customers that we are back and committed. The sales cycle involves ongoing conversations with known contacts, with some large customers willing to engage once they see we have our own people and network in place. Typical job sizes currently range from $300,000 to $500,000 as we rebuild, avoiding large upfront multi-million-dollar projects to maintain stable employment for skilled staff. However, we do have customers planning phased upgrades worth up to $30 million over several years. The sales cycle varies by customer, often influenced by financial year-end spending patterns, with government clients tending to spend before June 30. Security remains a priority for businesses, and evolving technology like cloud, cameras, and AI is driving new conversations. Maintenance costs for a full system can be about $200,000 annually on a $1 million system, reflecting the 24/7 nature of these operations. Long-term contracts are common, with some customers having relationships spanning 10 to 20 years.

01/09/2024 What is the impact of the recent tax loss recognition on the company’s financials and trading status?

We are finalizing a beneficial tax impact from our tax losses, which our accountants and auditors decided late yesterday should be recognized on our balance sheet. This was identified quite late in the process. To implement this, we will enter a brief trading halt today but expect to resume trading by Monday. The results are otherwise as presented, and I’m pleased to report that we delivered underlying normalized adjusted EBITDA, including ADT for 12 months, of $34.8 million, exceeding our upgraded guidance of $32 to $32.2 million. The actual reported adjusted EBITDA was $32.6 million. When we started the journey, we couldn’t include a full year of ADT due to timing, but it is a consistent business month to month. We initially target $31 million adjusted EBITDA for 12 months, upgraded to $33.5 to $34 million in May-June, and have now delivered $34.8 million, which is very pleasing and aligns with the type of business we aim to be.

01/09/2024 How is the company’s cash position and debt situation following recent acquisitions?

We have $11.7 million in cash at June 30 after paying for the AAG and ACG acquisitions, with reported cash a$25.6 million before that payment. Including AAG and ACG in a four-year forecast profit for 2024, earnings increased to $4.2 million from $3.86 million. We now see ourselves as a $40 million-plus EBIT business. We are rebuilding our models and budgets as these acquisitions are largely integrated. The $40 million EBIT figure is before growth or cost improvements. Strategically, the balance sheet and net debt are most important. Net debt stands at $68.3 million against a pro forma EBITDA of over $40 million, with an EBITDA-to-net-debt ratio of 1.7, which is very refinanceable. Delivering audited accounts and pushing against the guaranteed minimum interest period are current priorities. The goal is to replace the expensive financing from the ADT acquisition with a senior financing facility.

01/09/2024 What caused the higher-than-expected capital expenditure this year and what are the expectations going forward?

Capital expenditure was much larger than expected due to inherited pre-signed contracts requiring delivery, including 3G to 4G security system conversions. We have repriced our security systems so new systems generate returns through the P&L rather than capital expenditure. We are ceasing ad-owned equipment and effectively giving historic equipment to customers starting this financial year. Going forward, the main persistent capex items will be the ADT medical business, where equipment is purchased and rented to customers, and the New Zealand business’s 3G upgrade, estimated a $5 million next year. Other capex will be stay-in-business or growth-related, with general business capex expected to be in the low single-digit millions, including growth in medical. Last year’s core business capex was around $0.5 to $1 million, covering computers, servers, and vehicles. We refitted offices last year, which was above normal, so next year’s capex will be more normalized.

01/09/2024 What is the company’s view on long-term net debt to EBITDA ratio?

I am a conservative person. Currently, the trend is to deleverage, which excites the market. Five or ten years ago, people would have questioned a 1.7 times ratio because banks and acquirers would have accepted much higher leverage. The business is very stable and cash-generative. My best sense is that around 1.5 times net debt to EBITDA is appropriate now. Academics might say it should be three times, private equity five times, but we want to be seen as a mainstream small to mid-cap company. In Australia, a leverage ratio around 1.5 is sensible, with the possibility of gearing up to two times for the right opportunities, using cash carefully. Unknown factors like economic conditions could affect this, but the business’s stability, as shown by New Zealand’s 11% EBIT growth through recession, positions us well for capital management, including buybacks. We aim to maintain around 1.5 times net debt to EBITDA unless conditions change.

01/09/2024 What are the key financial highlights and margin targets from the recent accounts?

Adjusted EBIT on a 12-month basis was $34.8 million, with a margin of 26.7%, which is a very strong result and within our aspirational target range of 25 to 30%. This represents a healthy business. The accounts do not yet include ACG or AAG, as these are historic accounts. We incurred significant one-off costs this year, including two equity raisings, a debt refinance, due diligence, and transition costs related to moving the ADT business off Johnson Controls. These abnormal costs totaled $12.8 million and are expected to be gone in the new year, aside from some corporate initiatives and the ongoing debt refinance, which may also be non-recurring next year. The finance line reflects the refinancing efforts, and the tax benefit relates to a large tax shield from unrealized tax losses, which will allow us to avoid paying tax for some time.

01/09/2024 How does the accounting treatment of the ADT acquisition affect reported earnings and cash flow?

The accounting treatment requires us to depreciate the acquired customer base over five years, which results in a large non-cash charge affecting gross margin and EBIT lines. This charge is not material to actual cash flow or business economics but impacts reported profit. We have adjusted the reported numbers to reflect management’s view of depreciation and amortization, which relates mainly to capital expenditure needed to maintain the business, including property, plant, equipment, and leases such as our Sydney building lease. Subscriber assets and intangible amortization are non-cash and non-recurring and will disappear over the next couple of years. This explains why we generate strong cash flow but may not show strong bottom-line profit at a reported level for some time.

01/09/2024 What is the current status of net debt and refinancing efforts?

Net debt to pro forma EBITDA ratio is 1.7 based on reported numbers, and we are focused on completing the audit to fully concentrate on refinancing, which is underway with New Capital. We expect to provide an update at the AGM on October 8. Operating cash flow was $8.1 million this year, stepping up as we gained more control of the business after transitioning off Johnson Controls. Despite significant non-recurring costs, operating cash flow was $20.8 million, beating our forecast of $17.2 million from last August by over $3 million. Investing cash flows mainly reflect acquisitions and capital expenditure. The cash flows represent last year, which did not include a full 12 months of ADT or ACG/AAG and included non-recurring costs. We expect a significant step-up in cash flow in FY25.

01/09/2024 How does the company view cash flow quality and tax obligations?

Our underlying reported EBITDA converted to operating cash flow at over 100%, indicating a strong cash flow business. We have been on a tax payment plan related to early business stages, which concludes in December this year. We have a large tax shield from losses, so we won’t pay operating tax for some time.

01/09/2024 How has the company’s market capitalization and gearing evolved since acquiring ADT?

Prior to acquiring ADT last August, we were a $16 million market cap business; today, we are nearly $200 million. Our debt is higher but proportionally much lower relative to earnings and value. Our enterprise value, reflecting higher quality and safety, is still about 25% lower than before the acquisition. Our gearing is now within a standard range, and we are comfortable with the financial thesis as investors. We see significant opportunities to continue building shareholder value.

15/04/2025 What portion of IMG’s revenues are recurring, and is the remainder somewhat recurring?

We generate about $6.5 million per month in purely recurring monitoring revenue, roughly $80 million annually. On top of that, we have about $5 million per month in commercial enterprise work in Australia, plus over $1 million in New Zealand, much of which is also recurring. This commercial work includes access control, video, analytics, and integration services. Typically, customers spend about 20% of the system’s value annually on maintenance and upgrades, reflecting ongoing recurring revenue. We have a small portion, around 10 to 15% of revenue, from new site installations for a few large customers rapidly expanding their footprint. The rest of our revenue is largely recurring.

27/07/2025 Can you clarify the operating cash flow benefit, including the $500,000 inventory drawdown?

There were three components slightly abnormal but positive. First, $1.3 million of income in advance from a New Zealand government contract. Second, the $500,000 inventory drawdown benefit. Third, the ASB car leasing benefit, which moved costs from operating to financing cash flow, adding another $500,000 benefit.

So the $17 million operating cash flow includes about $2.3 million of one-offs. Beyond that, it is clean, steady-state, with no unusual costs.

26/08/2025 Why was revenue up more than gross profit, and how should we think about margins?

Revenue was up 43%, which outpaced gross profit, but EBITDA grew more strongly than gross profit. This reflects the transition away from capitalized accounting under the old JCI/ADT structure to a real cash accounting framework. The apparent margin decline year-on-year is not driven by acquisitions or business mix but by accounting presentation differences. Going forward, revenue, gross profit, and EBITDA should track more consistently. We also impaired the Signature unit due to forecasted profitability, but restructuring has resolved that challenge.

We are working with auditors and advisers to finalize the fully audited accounts, which should be out well before September. The only outstanding issue is the tax line in the P&L, which may be adjusted conservatively. Beyond that, everything else is complete.

27/10/2025 Can you explain what happened with the tax losses (NOLs) and how they affect your P&L and cash flow?

It’s an annoying issue because it appears material but isn’t. After acquiring ADT, our new auditors questioned whether ADT’s purchase breached the “same business test” for tax purposes in Australia, meaning whether the acquisition changed IMG’s business so much that past losses couldn’t be used. Our view, supported by experience and advisors, is that’s nonsense: we’re still in the same business, just larger.
Because the auditors couldn’t get a conclusive second opinion in time, they assigned a 40% probability to realizing those losses, which now appears in our accounts. The fix is to get a ruling from the Australian Taxation Office (ATO). We’ve filed tax returns since acquiring ADT with no issues flagged, so we’re confident. The only difference between our unaudited and audited accounts is that probability assumption. Amortization also plays a role, it’s non-deductible for tax, so while it suppresses accounting profit, it doesn’t affect cash tax. We’re already profitable and starting to pay tax. At worst, this affects roughly six to twelve months of lower tax payments, maybe a $5–10 million swing on a $250 million valuation, not material. It’s more of a noisy distraction than a real issue.

27/10/2025 What is the ATO and has it raised any concerns with IMG?

The ATO is the Australian Taxation Office, our national tax authority. To date, we’ve submitted tax returns since acquiring ADT, and the ATO has not raised any issues or inquiries. If they had concerns, we believe they would have contacted us quickly. Our advisors have confirmed that prior filings appear fully compliant. So while it’s frustrating noise, we don’t expect it to be material. We’ll follow the process to clarify it formally, but this doesn’t affect operations or future strategy.

27/10/2025 How should investors think about normalization adjustments going forward?

We’re now past the heavy-lifting phase of the ADT integration, refinancing, and restructuring. That first year involved system transitions, refinancing costs, and some redundancies. Going forward, business improvement initiatives will continue but should be smaller. We’ll clearly disclose one-offs, but they won’t be material.
It’s a balance, we shouldn’t be penalized for continuing to improve the business given we’ve acquired and turned around several operations. What matters now is showing the true earnings power of the business. Materiality levels are completely different from prior years; we’re not talking about tens of millions of exceptional costs anymore. Anything notable will be called out clearly.

27/10/2025 How seasonal is your business across segments?

Seasonality mainly shows up around Christmas. December and January are our weakest months because much of Australia shuts down, it’s our equivalent of Chinese New Year. That said, the first few weeks of December are busy as people rush to finish work before holidays. The last quarter of the year is typically the strongest, and the first quarter the weakest.
Our monitoring business, which makes up 65–70% of revenue, is highly recurring and stable, with minimal seasonality. The installation and upgrade segment is more seasonal, tied to project timing and customer budgets. Cash flow patterns also show some variation, as certain annual expenses cluster early in the year. Overall, the business is stable year-on-year, and as we grow, these small timing effects will smooth out further.

27/10/2025 Are you referring to the financial year or the calendar year when you mention first and last quarter effects?

Our financial year ends in June, so our first quarter runs from June to September. The second quarter goes from September to December, with the last two weeks of December often overlapping the first two of January, which can be slow due to summer holidays. Technicians are completing and billing work before year-end, so December is typically stronger than January. In this part of the world, people often take two or three weeks off in early January for family or camping holidays, which slows things down.

We also work with large infrastructure clients, government departments, and airports whose budget cycles run June to June. Their first quarter is usually about restocking and planning, and they tend to accelerate spending toward year-end to ensure budgets are fully used before June. That creates a genuine business effect for us.

27/10/2025 What metrics should investors track to judge how much value IMG is creating?

Because we’re fundamentally a low-capex business, EBITDA is a useful indicator here. In some industries, it can be misleading, but in ours, it’s a solid comparative measure and aligns with how peers are valued. I also run my own discounted cash flow analysis focused on translating earnings to cash and assessing growth rates. The industry is stable, so assuming terminal growth at GDP or GDP plus CPI makes sense. If we can compound growth from that base, valuation scales meaningfully. In short, EBITDA and cash generation are the key metrics I focus on.

27/10/2025 How is your residential business performing, and what should investors know about it?

Residential is actually the smallest part of our business compared to commercial, enterprise, and security monitoring. Despite the ADT brand’s association with homes, residential penetration in Australia is very low and has been flat or declining for years. Commercial has been stronger. That said, we’re starting to see growth, particularly in video guarding, both within ADT and through our wholesale partners like Signature and IMS.
IMG monitors about 1.5% of all premises in Australia, 91% are homes and 9% are businesses. The total industry probably monitors no more than 4%. We’re now focused less on the distinction between residential and commercial and more on total premises protected. Our economics are excellent in both, but commercial can be even better: more cameras per site mean higher revenue with lower incremental installation effort. The ideal customer might have 20 to 50 cameras, not just a few. We’re also focusing on educating customers, many still call asking for a camera or alarm, not realizing we can live-monitor it. So a big part of the opportunity is shifting perception from selling products to selling a monitored service.

Operations

01/04/2024 How does the 3G to 4G transition work for your installed residential customer base, and will old 3G units continue to work while marketing new 4G products?

There is a specific contract type in our business where we bear some cost, but generally, it is not our responsibility that the 3G network is shutting down. It is up to the consumer if they want to continue the monitoring service with us. We charge cost price for upgrading 3G customers to 4G, not seeking profit. In Australia, we are nearly finished with this transition, targeting a shutdown date in June this year. Some customers are reconsidering due to the cost, especially since many were heavily subsidized under the old JDC by ADT. We haven't yet introduced the newer, more valuable systems in Australia, but we plan to offer alternative solutions to customers who have turned off 3G or declined to upgrade. The industry focuses a lot on this transition, and for us, it’s a matter of moving through it. In New Zealand, the transition is still pending. The medical business is different; we fund the capex there, especially in New Zealand where the returns are higher, more stable, and government-backed, making it an attractive business. Overall, we are comfortable with the 3G phase-out in Australia, and since IMG only acquired ADT last August, we came in late but have been working through it quickly.

01/04/2024 How long can you use the ADT brand, and what is the arrangement around it?

We have the right to use the ADT brand forever under license, similar to a McDonald's franchise. The legal structure was set for reasons unrelated to us, but essentially, the brand is ours forever unless we do something crazy like selling McDonald's or using it outside security or against Global Partners' interests, which won’t happen. We have a strategy I’m excited to announce soon, which will help mitigate risks around the brand. So effectively, it’s our brand indefinitely.

01/04/2024 Is there a plan to invest in improving customer service for ADT Home Security, given complaints about underinvestment or under-resourcing?

Absolutely. We have more staff today and have invested significantly in customer service, reallocating roles rather than cutting costs. We have new teams throughout the business, and customers who felt underserved in recent years will experience a different ADT. Previously, the business lacked the care a local owner or someone like me would provide, but now we get constant feedback and act on it. Some issues stem from old PL technology platforms, which have caused problems with recent panels. While disappointing, these issues are outside our control, but we are introducing an entirely new platform with better supplier relationships and development involvement. The net promoter score for ADT is very positive given our hundreds of thousands of customers, though we acknowledge occasional issues, especially during nationwide storm events. We deal honestly with these challenges and are investing in our teams with a new mentality toward customer management, being upfront and clear about improvements. We believe customers will increasingly be happy with ADT as a service provider going forward.

11/07/2024 Are you using AI video solutions to enhance remote monitoring of surveillance cameras?

Yes, we are actively using artificial intelligence in our video monitoring services, though we may not have fully pushed these solutions to market yet. We distribute AI-enhanced products through our wholesale channels, as we focus on being a trusted service provider rather than building platforms ourselves. Historically, large players in the security industry got stuck on their own product suites and failed to innovate, which we want to avoid. AI is essential for us because raw video data is very intensive, and AI helps us efficiently process and analyze it, often using offshore resources. This technology is a key part of our current operations and future plans, and we find it exciting.

01/09/2024 What is the company’s customer churn rate by segment and how is it managed?

Commercial churn is lower than residential. Commercial relationships, especially those integrated with technology, tend to last 10 to 15 years because customers don’t move. Residential churn is around 10% gross, reflecting people moving properties and whether they resign. About a third of people who move house immediately resign in a new house. The introduction of DIY technology allowing equipment portability is expected to improve churn. The main focus is improving service, which has been enhanced by integrating the ADT residential business into Signature, resulting in faster turnaround times, better responsiveness to customer issues like billing, and improved monitoring responsiveness. This service improvement is the best churn mitigant. The focus going forward is on growth and net customer additions.

01/09/2024 What are the company’s acquisition costs and customer acquisition metrics?

We do not have a clean metric for customer acquisition cost (CAC) in residential yet, as we have a substantial marketing budget but limited human resources. We understand returns on new customers but cannot yet provide metrics comparable to offshore players. The business is run for cash and cash profitability, focusing on product pricing and mix to achieve about a 30% gross margin on new sales and higher margins on recurring sales. We will develop more analytical insights on CAC in the next year but currently focus on profitability per customer and new customer at a cash profitability level.

01/09/2024 How does the company assess its performance and outlook after recent growth and acquisitions?

We are very happy to have outperformed guidance twice and ended the year with a strong business and clear operational clarity. We are now in a calm place focused on execution. Our corporate strategy is to keep driving cash flow and reduce net debt to about 1.5 times EBITDA next year. We are refinancing debt to position ourselves for capital and growth initiatives, putting the future in the business’s hands in a way it hasn’t had before. Our three growth areas are commercial and enterprise, residential security, and ADT care. Commercial has grown from $2 million annual revenue last August to over $40 million today, driven by organic growth and acquisitions. Residential security is growing through customer growth and new easy-install services, including DIY options that improve price points and product offerings. ADT care has seen significant investment in staff, contract resigning, NDIS accreditation, and government program engagement, setting the stage for growth in this expanding market.

01/09/2024 What progress has been made in video monitoring and IoT integration?

Our video monitoring business has seen a 650% increase in connected cameras this year, which is just scratching the surface. We believe we are now in a position to drive camera monitoring penetration, which positively impacts customer life and our business. Looking ahead to 2024, we expect a significant year with clear growth areas and a focused team.

04/11/2024 What is the entry-level security product offered by Intelligent Monitoring Group, and how easy is it to install?

IMG introduced a new residential product called ADT Home Secure, with the underlying product named CyberSense. It functions like an Apple iPad connected to sensors, cameras, doorbells, smoke alarms, and sirens. The system is designed for easy self-installation; for example, the CEO’s daughter installed his system in 20 minutes. The base kit costs around $1,100, which is competitive compared to $3,000 to $4,000 for similar systems. While many customers prefer professional installation, IMG offers fast service, delivering and installing within 24 to 36 hours.

04/11/2024 How does Intelligent Monitoring Group’s security technology support aging populations and care needs?

The basic security kits have evolved into care kits that monitor elderly or vulnerable individuals. For example, the CEO’s mother, who had a stroke, is monitored by this system, which connects to a base station and alerts a control room if she falls or needs help. The control room can dispatch assistance and access the home if necessary. This care functionality complements the company’s three pillars of growth: commercial security, residential security, and aging-in-place care, which is a growing market with significant opportunities.

15/04/2025 What does IMG do and how did it grow to its current position?

IMG is Australasia’s largest security monitoring and services business, covering Australia and New Zealand. We focus mainly on commercial customers, providing electronic security monitoring such as burglar alarms. We became publicly listed through a reverse listing of a small business I joined in early 2020. A key milestone was acquiring the ADT business in Australasia, which, along with our other brands like Signature Security and Intelligent Monitoring Service (IMS), forms the IMG group. When I took over, the company was a fragmented collection of small control rooms. We consolidated these with a new, leading operating platform, growing the business to about $200 million market value with around $80 million in debt. We now serve about 200,000 customers. The market in Australasia has lagged behind the rest of the world, lacking a leading security services business. Our goal is to unify the market, accelerate technology adoption, and increase security service penetration to levels seen in the US and Europe.

15/04/2025 Does IMG grow alongside its customers, and what are the unit economics of scaling with fast-growing clients?

Yes, we do grow alongside customers. For example, a fast-growing data center client is expected to contribute about 10% of our incremental growth this year, with millions of dollars in additional work and fully funded expansion plans. However, this new site work is highly competitive and tends to be lower margin. Competitors like Securitas, Convergent, and Chubb often bid aggressively for such projects. We have a pricing threshold below which we won’t go to protect margins, as underpricing can lead to losses. We position ourselves as a quality provider charging fair prices for reliable, robust service. For critical clients like Sydney Airport, system reliability is paramount, any downtime is a major issue. Technology has evolved rapidly in recent years, with smart cameras and advanced access control systems offering new capabilities. Most customers have yet to fully optimize these technologies, so we aim to push the envelope to deliver productive, safe outcomes that improve their businesses.

27/10/2025 How much capacity do you have to support future growth, and will you need to expand it?

In our existing markets, we have plenty of capacity. Our acquisition facility with National Australia Bank still has about $33 million available, and we’re generating cash. We don’t need additional shareholder funding to execute our current plans. If we did pursue international expansion, the decision would depend entirely on opportunity size and return potential.
Australia has over 3,600 listed companies; we’re now roughly the 750th largest, with a market cap near $250 million, up from $7 million when I became managing director three years ago. Entering the ASX 300 brings access to major index and passive capital pools, and Australia is the fourth-largest funds-management market globally. So if we identified a major, accretive acquisition, we could raise capital easily. Overall, the balance sheet is strong, operations are healthy, and we have everything we need. The focus now is execution, proving our AI-and-camera story and delivering growth. M&A will continue selectively, but it’s a strategic supplement, not the core.

27/10/2025 How much additional operational capacity do your monitoring centers have?

A lot. The industry is in a crossover phase between traditional intrusion monitoring and new technology-driven services. When ADT built its most recent large monitoring center, we call them control rooms or operating centers, it was designed for future expansion. The physical capacity is significant, and incremental growth primarily requires adding staff, not new infrastructure.

For example, our largest control room in Rydal, Australia, is only about half full even at peak times. It was also engineered to allow another level to be built on top, so capacity can be doubled if needed. These facilities are highly regulated and expensive to construct, so that foresight gives us a major advantage. In short, marginal growth from here should produce high returns because we can scale using the footprint we already have.

27/10/2025 Who typically decides to onboard you as their security provider, and what motivates their decision?

It’s usually either a company’s security officer or procurement department. In large enterprises, think retailers or logistics firms, the security officer is often someone with 20 to 30 years of experience, sometimes with a background in physical guarding or patrols. Procurement-driven clients focus on cost, which suits us well because our technology-led model is highly price-competitive. The security officers, by contrast, can be more skeptical; they’re used to people rather than AI cameras, so we need to demonstrate performance clearly.

Our recent acquisition of BNP helps here, it gives us credibility in that traditional market. BNP uses both labour and technology, so we now approach clients not just as “the tech company” but as a seasoned security provider with deep operational knowledge. We also brought in a senior executive who founded Australia’s largest patrol and response company, now our general manager of ADT Guard. This lets us speak the same language as security professionals. In some cases, IT departments are also involved, particularly around access control, as we must reassure them that our cloud systems integrate safely without creating new vulnerabilities.

27/10/2025 Is it fair to describe IMG as a private equity-style platform operating in the public markets?

I don’t think so. We’re an operating business, not a financial platform. Because of the number of transactions we’ve done, people sometimes assume we act like private equity, but our approach to integration is very different. Every acquired company becomes part of us, co-branded, onboarded, and culturally integrated. We haven’t had to do a large-scale “platform” integration in years. We continue to work on ADT’s core systems, but most other integrations are complete.

I often tell people: if you tried to force a rigid, centralized system across every business, like installing a single ERP or shared HR for all of Berkshire Hathaway, you’d probably destroy what made those businesses great. Our approach is to integrate where it adds value while preserving what made each acquisition strong. That balance is our differentiator. IMG Group itself is lean; the focus is on empowering capable people across ADT, Signature, and IMS. So, no, we’re not listed private equity. We’re a focused operator building an enduring, values-driven business.

Outlook & Guidance

03/09/2024 What are the key highlights of the full year 24 results?

I think the key highlights are three-fold. First, we upgraded guidance from $31 million to $34 million and hit the top end of that, which is satisfying. Second, cash flow is coming through as we’ve worked off the transition from JCI and taken control of the business, making it a truly cashed unit. Third, we are now positioned to refinance the expensive ADT facility debt, aiming to reduce debt costs. Personally, I’m incredibly proud to lead a team of 530 talented, hardworking people making a real difference.

03/09/2024 How is the company positioned for full year 25 earnings and cash flow?

We are well-positioned for a year of strong earnings and cash flow. The past year was marked by ADT, equity raises, debt refinance, and acquisitions. Now, as one-off costs related to those things come out, the base business is strong. We upgraded pro forma earnings from $38 million to $40 million based on the strong year we just had. You’ll start to see growth and underlying trends more clearly this year. It will be a progression, not a point-to-point jump, but we’re optimistic that 2025 will prove we’ve built a robust, stable, clean, and simple business that can deliver.

04/11/2024 What is Intelligent Monitoring Group’s outlook on growth, acquisitions, and market consolidation?

IMG sees substantial growth opportunities across commercial, residential, and care markets. The company is focused on delivering consistent results and views itself as a compounding story with a clear path to becoming a billion-dollar business from its current $200 million valuation. The security industry is old and unconsolidated, with many local operators holding customer bases that need technology upgrades. IMG has the platform and expertise to acquire these businesses strategically, though it is not chasing acquisitions aggressively. The company expects acquisitions to be a feature of its growth strategy, buying businesses at attractive multiples.

04/11/2024 Can you summarize Intelligent Monitoring Group’s position and future prospects?

Intelligent Monitoring Group, trading as IMB on the ASX, is the leading security company in Australia and New Zealand, leveraging the globally recognized ADT brand. The company is innovating with technology-driven security and care solutions, expanding its market share, and pursuing strategic acquisitions. With strong growth momentum and a clear vision, IMG is positioned to continue its leadership and deliver significant value in the coming years.

15/04/2025 Does IMG plan to convert residential customers to video guarding, given the better unit economics and a suggested 10-year plan?

Yes, absolutely. The unit economics of video guarding are roughly four times better than standard monitored customers. For example, in residential settings, a typical install costs about $2,500 with $40 monthly monitoring fees, whereas video guarding installs cost about $4,000 with $120 monthly fees. The monitoring cost difference is $18 versus $25, reflecting much higher margins, but the service quality must be excellent to justify the price. We have begun upselling video guarding to small cohorts of our existing customer base with some success. However, many ADT customers were acquired under the previous JCI ownership at very low value, with subsidized pricing, so they may not yet fully appreciate or afford the guarding product. Most growth so far comes from large corporate, industrial, and higher-wealth customers who value and can pay for the enhanced service.

15/04/2025 When can investors expect IMG to report clear free cash flow figures without adjustments?

The ADT acquisition initially complicated our P&L and cash flow due to capitalization practices and transition costs, but these issues have largely been resolved. Our first half results were relatively clean aside from acquisition and refinancing costs, which are now behind us. Some smaller acquisitions caused short-term cash flow timing variations, but if we make no further acquisitions soon, these irregularities will cease. The recent refinancing generated some one-off write-offs and cash costs, which will still appear in the March quarter cash flow, but going forward, cash flow should be clean. We expect the fourth quarter cash flow for this fiscal year (March to June) to be the first truly clear and clean number for investors. The first half results also provide a solid base for moving forward.

27/07/2025 How confident are you the two deferred big service contracts will come back online in FY26?

Nothing in life is certain, but we are deeply engaged. One was opportunistic yet significant, and staff changes may delay progress. We’ve seen similar pauses before, such as with Reject Shop this year when a takeover stopped everything. Within a month, the new owners brought us back in, emphasizing the need for a proper nationwide security supplier. I believe one contract falls in that camp.

The other remains very active, and I look forward to updating in August. It is both meaningful and a leading contract for the industry. Those familiar with it will recognize its significance, and I believe it will cement us as the leader in enterprise security.

27/07/2025 What is the momentum in video guarding for FY26, and what investment is needed?

Investment is focused on marketing and partnerships. You will see the ADT brand more widely in newspapers, banner ads, and advertorials. Once people see what we can do, uptake is high, but so far we have not gone wide. That expansion has now begun.

We also recognize we cannot meet demand alone. To avoid building a $100 million pipeline and only delivering $5 million, we are launching a signature partner program with 20 trusted partners, starting at the AIO conference in Sydney. This gives us low-capital reach to scale guarding. Investment is operational, marketing, and partnerships, not capex.

27/07/2025 Will NZ 3G network investment cease by the end of FY26?

Yes, the investment should profile down and be gone by the end of FY26. It could last as long as the networks keep 3G open, but our estimation is a decline period-on-period through 2026, finishing by year-end.

There may be a small tail, perhaps half a million dollars, in the second half, but definitely by the end of FY26 it will be over.

27/07/2025 Final reflections on the company’s progress and outlook?

Three years ago, when I took over, the market cap was $11 million and gearing was over six times EBITDA. This quarter, we generated cash in the bank equal to that market cap. That reflects past decisions, but our focus remains on the inputs shaping what lies ahead.

We believe we are in a strong position to build an enduring, high-quality Australasian leader in our space. I appreciate the support and interest and look forward to following up with investors in the months ahead.

26/08/2025 What is your pipeline conversion rate and revenue outlook?

The figures we presented reflect anticipated revenue impact, not the full pipeline, which is larger. Commercial sales cycles often take time, so we layer the gross pipeline and then work toward converting it into revenue. We are a premium provider and do not aim to win every job, so a healthy conversion range is 33–50%.

Regarding revenue, the second half EBITDA presented earlier should be doubled to approximate run rate, with about $1 million additional from acquisitions. That positions us as a mid-forties EBITDA business. Seasonality exists, with slower activity around December–January and stronger performance in June. Two large fourth-quarter deals were delayed due to personnel changes at client organizations, but they remain in our pipeline and we expect to close them in the coming quarter. We may begin disclosing pipeline by size, without naming customers, as no single deal dominates. This provides a clearer picture while maintaining confidentiality.

26/08/2025 How has the January run rate for the commercial enterprise business trended?

The January run rate in commercial enterprise was solid in the first half and has continued trending upward. I will not throw out specific numbers here, but the business is clearly growing. My last review showed we were definitely through $60 million in Australia in that line of business. That gives you a sense of the scale, but I’d rather handle exact details offline.

26/08/2025 What is the outlook for cash conversion and CapEx?

Cash conversion is improving, with fewer abnormal impacts ahead. We used cash for the Western Advance acquisition, but there are no major additional CapEx requirements, and the New Zealand 4G upgrade is nearly complete. CapEx is trending back to underlying depreciation levels, leaving us with a much cleaner, cash-generative business. Reported depreciation and amortization are mostly non-cash accounting entries, so we focus on long-term cash generation. Note that Q4 included about $2 million in one-off benefits, so it should not be annualized, but it showed what the business is capable of. Going forward, only restructuring and M&A costs will be called out as one-offs, and these are relatively small.

26/08/2025 When will audited accounts be released, and what is the main outstanding issue?

Audited accounts will be finalized and released well before September. The only unresolved matter is the tax position, specifically the treatment of prior year losses under the same business test. This has no impact on revenue or EBITDA, only on the tax line. Once clarified, we will provide full transparency.

27/10/2025 Is the 30% market share an aspirational target to align the company?

Yes, it’s an aspirational but clear marker to focus the organisation. I wouldn’t be satisfied with 5% annual growth forever; the target signals the scale we believe is possible and the type of market leadership we’re aiming for, while acknowledging the timeframe and adoption rate are uncertain.

27/10/2025 What kind of ROI are you expecting from AI investments, both in capital returns and marketing impact?

There are two sides to this. On the revenue side, we’re a positive beneficiary of AI because it enhances our competitiveness against an industry that largely hasn’t adopted it. Our growth and future prospects are positively shaped by leveraging AI. On the cost side, there’s still room to improve productivity, especially in handling core volume and response times, but we’re already highly productive relative to peers, partly thanks to the legacy systems from Johnson Controls and ADT.

Our focus right now is on getting our core platforms right before layering in further AI-driven efficiency gains. I’ve seen this pattern before, having been an investor during the dot-com era, and AI feels similar: the concept is correct, and its impact will be transformative. A few companies will execute well and become clear winners. We’re not valued like an AI company, but AI will be genuinely positive for our business. For long-term investors seeking real-world AI applications, our industry is positioned to benefit meaningfully as adoption deepens.

27/10/2025 Since AI moves so fast, how do you ensure your current tools won’t be obsolete within a few years?

I see that as an opportunity. We’re already working with a product supplier to take AI automation to the next level. Today, our AI monitoring triggers police response the moment a human intruder is detected, and many arrests have resulted from that. My vision is that by the time the police return to the station, all incident data will have been automatically compiled into a report, ready for review and sign-off.

That kind of automation would make police more efficient and help them get back on the street faster, which benefits everyone. As these integrations deepen, ADT will naturally become the preferred partner for both customers and law enforcement. We still need greater customer penetration to fully realize that vision, but it’s coming quickly.

Risks and Macro

04/11/2024 How has the security market in Australia and New Zealand changed recently, and how does it compare to the rest of the world?

The security market is evolving but not fully transformed yet. Wireless technology and cameras are key changes, but many consumers and businesses have not adopted these advances. Compared to overseas markets like the U.S., where 30% of homes have monitored security, Australia and New Zealand are behind. IMG aims to fast-track this adoption by bringing in the latest technology, sometimes even ahead of what is offered in the U.S. Security demand remains strong, and the value and results of monitoring services are improving significantly.

15/04/2025 How exposed is IMG to tariffs and supply chain issues?

Most of our security products come from Europe or Asia, so exchange rates can impact our cost of goods sold. Our video guarding technology, ADT Guard and Signature Guard, involves hardware from China and software from the US. While tariffs and geopolitical tensions could have some impact, we currently see business as usual with no significant disruption. Interestingly, some international players with non-core Australian operations might divest, creating rare, attractive M&A opportunities for us. This environment reinforces the value of being a local provider. IMG emphasizes its Australian and New Zealand roots, serving local customers with trusted, locally controlled services, which resonates strongly with clients amid global uncertainties.

15/04/2025 Will a recession impact IMG’s revenues and margins?

Recession is unlikely to critically impact recurring revenues and margins because security services are essential and ongoing. However, some growth from large upgrade and retrofit projects could be delayed as businesses may postpone investment decisions. For example, a major airline client is considering a multi-year security system upgrade, but timing is uncertain and could be pushed back in tougher times. Day-to-day recurring security services like access control and monitoring continue regardless of economic conditions, as businesses need these systems operational and maintained. Overall, IMG’s business model is robust, and I have not been concerned about market or economic volatility recently.

27/10/2025 What is the corruption landscape like in Australia’s security industry?

Australia is a very good place to do business, and corruption is not a feature of our industry. I’m not aware of any such issues in our company or more broadly in recent years, though there were isolated cases in the 1990s involving government contracts. The bigger issue today is not corruption but the rise in crime and security concerns.

Social media and globalised awareness of threats have changed behaviour, and certain regions, notably Victoria in Australia, have seen a sharp increase in retail shrinkage and shoplifting, as highlighted in recent reporting seasons. Household security concerns have also risen, especially in urban areas. So while corruption doesn’t trouble me, growing crime awareness and demand for security solutions are very real drivers of our business.

Personal Questions

15/04/2025 Can you share about your background and how your early years shaped who you are today?

I’m a New Zealander and also an Australian citizen. I grew up in a small country town in New Zealand within a multi-generation family business, which sparked my early interest in business. I left school early and earned a master’s degree with honors in economics from Auckland University. As a child, I was a competitive swimmer, representing New Zealand at near-Olympic levels, which instilled focus and drive in me. I like to think I bring that same focus to my work, but in a human way. Leading IMG, which now has nearly 600 employees, is rewarding because we’re transforming an industry that was neglected and building a team excited about the work and the value we provide. I have three children and enjoy coaching sports teams, applying the same philosophy I share with my team: first, get into championship shape, but the goal is to win five championships, building a sustainable, enduring team. I’m passionate about building a meaningful, commercially solid company that adds value and endures beyond my time.

15/04/2025 How was your transition from private equity and investing to becoming a CEO, and what motivated you?

I started investing early, just before the tech boom and bust, managing significant funds and gaining deep market experience. I then built a successful wealth management business in Melbourne for 13 years, focusing on direct investing and business turnarounds. By 2019, I realized I wanted a new challenge beyond investing, seeking a role where I could spend the next 20 years. IMG began as an investment opportunity, a failed roll-up I recognized from experience. I initially joined as a non-executive director and realized my skills matched the company’s needs, though I had to learn the technical side slowly. Being new to the industry was an advantage, allowing fresh perspectives and challenging old ways. The role is more about coaching and leading a team than being the star player, which is a shift from investing. It’s been an interesting and rewarding journey.

15/04/2025 How did your relationship with Peter Kennan develop, and what is his role at IMG?

I met Peter through a co-investment in a distressed hybrid bond trading at 10 cents on the dollar. We worked together to recover that investment to par, which was our first co-investment. We then partnered on another asset business, growing it significantly through M&A and restructuring. We’d known each other as co-investors for about a decade before IMG. In late 2019, I ran into Peter while trying to help Threat Protect raise working capital. We decided to join forces on the board for what we thought would be a small, short-term project. It turned out to be more work, but the underlying business was stable and cash-generative. We soon realized the opportunity was much bigger. Peter, who lives in Geneva, and I decided I would take a more active role. Today, Peter is chairman and I am CEO. We have regular board meetings and frequent communication, at least weekly. He is very engaged and informed on all major matters. Our backgrounds and objectives align well, helping us stay focused and avoid distractions common in listed companies. We keep external distractions minimal and prioritize direct communication with investors. I welcome feedback and advice but am empowered to run the business day to day.

15/04/2025 How does it feel to be a public company CEO?

To be blunt, I don’t like it much. It’s a very thankless role, somewhat like being a politician. Transparency is important, especially when trust is an issue, but it comes with real costs that people often overlook. One challenge is that all our competitors are watching everything we do, calls, LinkedIn profiles of staff, and so on. To protect our hard-earned advantage, I recently required all IMG staff to sign non-disclosure agreements restricting public comments about our technology and operations. While I appreciate the support of shareholders and don’t oppose being listed, the role brings challenges that must be carefully managed.

15/04/2025 What mistakes have you made as CEO and what have you learned?

I find mistakes more interesting than successes. One challenge has been embedding the cultural values I believe are essential: honesty, transparency, and inclusivity. I underestimated how difficult it is to get people, especially those from large global corporations used to risk-averse cultures, to fully embrace these values and make decisions confidently. We are working on this daily.

Another mistake was the acquisition of Mammoth in early 2022. It was done just as the Ukraine war began and before we acquired ADT. We hoped bundling products would accelerate growth, but the industry proved very slow to change, and the ADT acquisition made that strategy redundant. We shifted focus to being a service provider with agnostic technology. Although the deal didn’t look great on paper, we learned a lot about the industry and ourselves.

Lastly, the capital raise last year unfolded poorly. We planned a measured raise to secure funding ahead of refinancing, but a one-time liquidity need from our largest shareholder, Peter, led to market misinterpretation and loss of control over the process. It caused short-term share price impact and unhappy stakeholders. While I wouldn’t repeat it, we are now in a very strong position and focused on execution.

15/04/2025 What do you fear as CEO?

I take my responsibility to investors seriously and don’t underestimate the trust placed in me. My biggest fear is doing something that jeopardizes people’s financial well-being or trust. Life is unpredictable, and I can’t control everything, but I am resilient and committed to facing challenges head-on. Ultimately, I believe most people want to be proud of their work, provide for their families, and leave a positive legacy. I share those values.

27/10/2025 What do I need to know about your earliest days that helped me understand who you are today?

I started walking at nine months old, finished school early, and went to university a year ahead of schedule, completing my master’s degree and beginning my career as a professional investor quite young. I was also a swimmer, representing New Zealand from age nine through nineteen, winning national titles. That early discipline and focus shaped me.

When I took the job at Intelligent Monitoring Group (IMG), it was because I felt the company needed someone who would concentrate deeply on what had to be done and then build it through. I think people sense that about me, I’m focused, team-oriented, and serious about impact. As I often say, “We’re all dead,” which doesn’t always land well, but it reminds me that life is short and we should use our time meaningfully to make a difference.

27/10/2025 Where does your sense of urgency come from?

I’m not entirely sure. We’re all shaped by upbringing, DNA, and experiences. My parents were active, capable people, and my mother especially encouraged me to push forward. When I was fifteen, I lived in China for three months as a foreign exchange student, just after Tiananmen Square, and there was only one McDonald’s in the whole city. That experience, and my parents’ example, meant complacency was never an option.

When I took over IMG, I focused the business on core values that I believe are essential for any successful team or organization: honesty, transparency, and inclusivity. I asked our team what they thought, and they added a fourth value, excellence. For me, excellence is implied; I don’t get out of bed to be worse than I was yesterday. But I appreciated that they wanted it written in. That’s how the IMG values were formed, collaboratively, and with intent.

27/10/2025 How did those values take shape within the company?

When we acquired ADT from Johnson Controls (JCI), a massive global firm with hundreds of HR staff, we had none of that infrastructure. I didn’t want to put meaningless “values” on a wall. I told the team I’d rather have nothing than hollow words. For me, this is probably the most serious aspect of our business, making sure our values are real, lived, and understood.

We’re now over 600 people, and maintaining consistent, high-quality service at that scale requires shared principles. I always say, if you live a life of honesty, transparency, and inclusivity, your life will be good, though it’s not easy. In our industry, honesty is especially critical. Since the start of electronic security in the 1940s, companies have often tied themselves too closely to the latest technology. When that tech falls behind, it can drag the service company down with it. Many major firms, ADT, Tyco, Honeywell, Chubb, have faced this issue. To endure, a service company must be brutally honest about the products it uses, or risk waking up one day to find it has fallen behind.

27/10/2025 What was the organizational culture like when you joined, and how has it evolved under your leadership?

When I first took over, both pre-ADT and ADT businesses felt neglected, almost unloved. There was little pride or energy. My first message to staff was simple: by next Christmas, I want you to feel proud to tell your family you work here. Pride is the best indicator that we’re on the right path.
Over time, we’ve built that pride and focus. My style is hands-on and decisive, I’m comfortable making material calls for the business, which provides clarity and momentum. I still take customer calls myself, even small ones, and that attitude of accessibility and accountability has spread through the company. We want to succeed with our employees, customers, and investors alike. Success isn’t about headlines or ego, it’s about the internal satisfaction of building something valuable. I’d say we now have a team ready to compete for championships; the next step is to start winning them consistently.

27/10/2025 How do you retain great employees and maintain motivation across the organization?

We’re not overly sophisticated on the financial side yet, but being listed gives us the ability to create equity participation schemes so employees can share in the value they help create. That’s rare in our industry and will be a key advantage going forward. Of course, we pay people fairly and focus on being a stable, high-quality place to work.
But beyond pay, people stay because they want to be part of something meaningful. They want to make a difference and grow with a winning team. I often use a sports analogy, Tom Brady wasn’t the highest-paid quarterback, but he became the greatest by prioritizing team success over personal gain. That’s the kind of culture we want here: disciplined, team-oriented, focused on excellence, and driven by shared ambition rather than ego. If we do that consistently, success will follow.

27/10/2025 Is there any question I should have asked that I haven’t already?

I think you’ve covered things really well, David. Your questions always go beyond the surface, which I appreciate. At this stage of the business, there aren’t any big surprises or secrets. Our focus remains on execution. I often say we’re only as good as our last hit record, if we want to be a successful global band, we can’t afford two or three bad albums before returning to form. We understand that consistent short- and medium-term delivery is what earns us the right to pursue our longer-term ambitions.
Right now, the key question is about acceleration. We delivered organic growth last year, and we aim to do it again this year. The next challenge is scaling that momentum. When and how it happens is something we’ve modeled and have a feel for, but we’ll know it more clearly in hindsight. When that acceleration comes, we’ll be eager to share it, and I think it’ll be an exciting period for everyone involved.

27/10/2025 Any final thoughts before we wrap up?

Thanks, David. I think you’re a star and really appreciate your style and professionalism. I enjoy these conversations, and we’re proud of the relationship and the opportunity to talk about the business in this kind of forum.

Other

01/09/2024 How has the market responded to the company’s performance and valuation?

Share prices have responded well this year, reflecting the underlying value of the business at 6.5 times earnings. Despite this, we are actually 25% cheaper now on an earnings basis than before acquiring ADT, though still below comparable global peers. We are now a substantial business with over 500 employees across Australasia, serving over 200,000 customers. The business is 81% Australian and 19% New Zealand, with the New Zealand segment performing well despite recessionary conditions, demonstrating the business’s defensive strength.

03/09/2024 Can the market cap grow further given the recent share price increase?

Yes, I believe so. When we started, our EV/EBITDA was 8.6 times, and now it’s 6.5, so we’re actually cheaper today despite the share price nearly tripling. This is a very stable industrial business, not subject to pricing ups and downs. Globally, we remain cheap, and there is interest in the platform we’re building, though that’s out of my control. Our focus is on adding value. I don’t feel like we’re done yet; we have a real ambition to build a mid-cap company. If we execute well and do the hard work, this can be a substantial business over time. I have no doubt about the value of the business.

04/11/2024 How did Intelligent Monitoring Group grow its market cap from $50 million to over $200 million, and what are the growth prospects for the next 12 to 24 months?

Intelligent Monitoring Group (IMG) is now the largest security monitoring business in Australasia, with over 200,000 residential and commercial customers, including fire alarm monitoring. The significant growth was driven by acquiring ADT, the leading global security brand, and integrating it into IMG’s strategy to become the preeminent player in security. The company sees strong growth prospects as it leverages this brand and expands its market presence.

15/04/2025 What steps is IMG taking to improve transparency in financial reporting and communication with stakeholders?

I acknowledge there was valid criticism around last year’s capital raise and AGM guidance, where we paused longer than intended before full disclosure. That was regrettable and not something I want to repeat, though some factors were beyond my control. Our approach is to be open and accessible; we regularly engage with investors and understand the importance of clear guidance. Internally, transparency was challenging initially because, for the first 11 months after acquiring ADT, we lacked access to our own ERP system and had to run the business bottom-up, focusing heavily on cash management. Now, we are focused on clearly defining the key business drivers, such as customer numbers, customer value, and recurring revenue, and aim to provide much better, meaningful disclosure by the end of financial year 2026. We want to avoid overwhelming stakeholders with data that could confuse rather than clarify. Before releasing results, we seek feedback from investment banks and trusted advisors to ensure our messaging is clear. Ultimately, we are committed to building a long-term, valuable business and see transparent communication as part of that journey.

27/10/2025 Have you considered rebranding the company to ADT Australia to leverage the brand power?

We have discussed it, but our business serves around 800 independent security companies that aren’t ADT. Those relationships are core to our history and remain very important to us. As ADT grows, our broader market share opportunity will actually come through those partners. Our labor is concentrated in the control room, which is highly scalable, so we can support both ADT and other brands efficiently.
While investors might like the idea of a unified ADT ticker, strategically it’s not the best move for us today. ADT and Signature IMS are separate businesses with distinct customers, and we handle that information carefully. Our goal is to be the leading security services provider across the industry, not just under one brand. IMG Group might not be the perfect name forever, but for now, it reflects that broader vision.

27/10/2025 What’s your approach to investor communications and engagement?

We’re very open. If you ask a question, you’ll get an answer. My mobile and email are public, and our wider team of 600 shares that mindset. We view investors as co-owners, not outsiders. I prefer that investors take the time to understand our business properly rather than buy in on hype.

We’ve built strong coverage, with three quality analysts now following us, and we engage regularly through investor events and presentations. We also host our AGM at the ADT facility and welcome investors to tour the control room. Our focus is on consistent, transparent communication, even though feedback can vary widely. The challenge is to stay steady rather than rewrite the message for every audience. As we grow, it takes me a bit longer to respond personally, but I still answer all emails and calls myself, supported by our external IR partners.

Sources

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