IPG - IPD Group Ltd

 IPG 

2026 aug

ipdgroup.com.au

https://www.tradingview.com/symbols/ASX-IPG/financials-overview/

https://stockanalysis.com/quote/asx/ipg/statistics/

https://koalagains.com/stocks/ASX/ipg

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Over the last 5 years (FY2021 to FY2025/2026), IPD Group Ltd (ASX:IPG) has experienced stellar growth driven by demand in data centers, infrastructure, and the electrification sector. Revenue surged from roughly AU$118 million in FY2021 to over AU$354 million by FY2025, while net profit after tax (NPAT) expanded to AU$26.2 million. [1, 2, 3, 4]

Profit & Revenue Growth

Revenue: Scaled dramatically at an average annual growth rate of over 32% across the five-year stretch, reaching a trailing twelve-month (TTM) revenue of AU$370.4 million. [1, 2]
Net Profit: Net profit after tax grew from lower baseline figures up to AU$26.2 million in FY25, with recent half-year (H1 FY26) underlying NPAT hitting AU$14.4 million (up 8.3% year-on-year). [1, 2]
EBITDA: TTM EBITDA sits at approximately AU$42.8 million, backed by strong operational execution and strategic acquisitions like Platinum Cables and EX Engineering. [1, 2]

Debt & Capital Structure

Long-Term Debt: Maintained at manageable levels, fluctuating between roughly AU$11 million and AU$41 million over recent cycles depending on acquisition financing, balanced by solid operational cash flows.
Cash Generation: Operating cash flow improved heavily alongside earnings, scaling past AU$52 million in recent full-year reports. [1, 2]

Return on Equity (ROE) & Returns

ROE: Strong profitability yielded a consistent Return on Equity typically ranging between 15% and 22% over the multi-year period (currently tracking around 16.3%). [1]
Dividends: Rewarded shareholders with a stable and growing payout; the interim fully franked dividend for 2026 reached AU$0.068 per share, reflecting a dividend yield near 2.65%. [1, 2]

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IPD Group Limited (ASX:IPG) trades at a current P/E ratio of roughly 15.1x to 18.7x, with recent historical annual P/E ratios fluctuating between roughly 11x and 24x over recent years, alongside a Return on Equity (ROE) averaging near 15.5%. [1, 2]

Valuation and P/E Ratios

Current P/E Ratio: ~15.1x – 18.7x
2025 P/E Ratio: ~11.8x – 12.9x
2024 P/E Ratio: ~19.5x – 20.5x
2023 P/E Ratio: ~22.3x – 24.3x
2022 P/E Ratio: ~10.9x [1, 2, 3, 4, 5]

Profitability and Returns

FY2025 Return on Equity (ROE): 15.97%
FY2024 Return on Equity (ROE): 15.43%
FY2025 NPAT (Net Profit After Tax): $26.19 million
FY2024 NPAT: $22.36 million [1]

Key Financial Metrics

Price to Book (P/B): ~1.89x (FY2025) up to 3.22x (FY2024)

Dividend Yield: ~4.2% (fully franked)

Current Ratio: ~2.02x

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For IPD Group Limited (ASX:IPG), a full 10-year historical track record of annual Return on Invested Capital (ROIC) versus Weighted Average Cost of Capital (WACC) is unavailable because the company only listed on the ASX in December 2021. Current trailing data shows an ROIC of approximately 12.8% to 17.65% against a WACC of about 12.2% to 12.8%, indicating the company is generating positive excess economic value. [1, 2, 3, 4, 5, 6]

Current Return Metrics

ROIC / Return on Capital: ~12.83% to 17.65% (trailing twelve months)
WACC: ~12.22% to 12.80%
Economic Spread: Positive (+0.6% to ~4.8% spread), meaning returns currently exceed the hurdle cost of capital [1, 2, 3, 4]

Public Trading Context

IPO Date: December 16, 2021 at an initial listing price of A$1.20.
Data Limitations: Because IPD Group operated as a private entity prior to late 2021, a complete year-by-year 10-year public spread history cannot be computed from audited public exchange filings

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buffett tests

An analysis of electrical equipment distributor IPD Group Ltd (ASX: IPG) reveals high operational efficiency and an acquisition-heavy approach to expansion. [1, 2]

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Historical Return on Equity (ROE) Trends

IPG exhibits strong and improving financial efficiency metrics. Its historical ROE over recent fiscal years demonstrates an effective utilization of shareholder equity to generate profits: [1, 2, 3]

Fiscal Year	Return on Equity (ROE)	Shareholders Equity	Net Income
FY2024	15.4%	$150.7M	$22.4M
FY2025	16.6%	$163.9M	$26.2M
FY2026	17.62%	$181.8M	$30.5M

Steady Expansion: The ROE has climbed incrementally from 15.4% to 17.62%. This trend indicates that the company's recent high-profile acquisitions are integrating smoothly and turning accretive. [1, 2, 3, 4]
Earnings outstripping Equity Growth: Profits increased by 16.3% in FY26, outpacing the 10.9% growth in total equity. This fundamental driver actively pushed the ROE upward rather than relying heavily on financial engineering or excessive leverage. [1, 2]

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Capital Allocation vs. Warren Buffett Benchmarks

Warren Buffett evaluates management through a strict capital allocation framework emphasizing high returns on capital, low capital intensity, disciplined retention of earnings, and strategic clarity. [1, 2]

1. The $1 Test (Retained Earnings Performance)

Buffett Benchmark: A company should generate at least $1 of market value for every $1 of earnings retained.
IPG Performance: Meets Benchmark. IPG's share price surged 89.33% across FY26, closing at $5.68 (and trading near $5.95). Retained earnings over the last three years have driven compounding EPS growth of 13% p.a.. This structural capital gain easily outperforms the net dollars retained by the business. [1, 2, 3]

2. Organic Growth and Return on Invested Capital (ROIC)

Buffett Benchmark: High returns on all invested capital (ROIC) are required, showing a true competitive "moat". [1, 2]
IPG Performance: Strong. IPG boasts a 14.44% ROIC and an 18.75% Return on Capital Employed (ROCE). Both figures comfortably clear its Weighted Average Cost of Capital (WACC) of 9.18%, demonstrating net economic value creation. [1]

3. M&A Execution vs. Organic Compounding

Buffett Benchmark: Buffett generally prefers organic compounding but approves of bolt-on acquisitions if executed strictly at a rational price without diluting shareholders.
IPG Performance: Mixed. IPG relies heavily on programmatic M&A to buy growth, completing major transactions like CMI Operations (~$100M) and Platinum Cables ($45M). While these deals unlocked massive thematic growth via data center and AI infrastructure exposure, they came at the cost of a 12% shareholder dilution and increased long-term debt to $69M. Buffett typically detests equity dilution to fund acquisitions unless the economics are unequivocally superior. [1, 2, 3]

4. Dividend Payout Consistency

Buffett Benchmark: Capital should only be returned via dividends if management cannot find higher-return internal projects.
IPG Performance: Balanced. IPG maintains a strict 50% dividend payout ratio. This balanced strategy allows the company to reward passive investors with a stable ~2.4% yield while retaining the other half of its net profits to fund internal growth initiatives

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