Sdi Share Discussion Threads

[rhomboid] 20/12/2016 09:56

Hi supernumerary

From the RNS "Astles designs, manufactures, supplies and services bespoke chemical dosing systems and operates in niche markets, predominantly two piece beverage can manufacture. Astles makes sales of its chemical dosing systems via its direct sales channel and also undertakes its own maintenance and servicing for clients. Astles' chemical dosing solutions include control systems, pumps, parts, sensors and maintenance. Over the 14 months to July 2016, Astles' product mix comprised:"

Average sale price is £50k , seems to me to be an excellent fit and gives a route into a new but technologically linked market? What's not to like?

[ramridge] 20/12/2016 09:54

The deal is very good. A pre tax profit of £873K on £2m revenues is near twice what SDI could manage on £8.5m revenues. The deal looks significantly earning enhancing.
But management is greedy, untrustworthy and the deep discount of the placing is just too steep.
I will not be buying.

[hastings] 20/12/2016 09:54

It isn't a manufacturer of the cans, rather it provides monitoring systems within the production process.

In terms of its core customer line this is the two-piece beverage canning industry, which accounts for about 85% of revenues.

In the canning industry, it is critical that after the aluminium cans are pressed that any residues are removed and the cans cleaned before being sprayed with a protective coating.
This requires dipping in a water bath with chemical solutions which are monitored by various sensors provided by Astles and automatically adjusted by the control systems that are designed and installed by the company.

[supernumerary] 20/12/2016 09:45

I struggle to see what the interest is in a beverage can manufacturer. Certainly nothing to do with 'Scientific' or 'Digital' or 'Imaging'...

[the prophet] 20/12/2016 09:41

This looks to be another good acquisition by SDI at an attractive price. SDI made the Sentek one work well, so if they can do the same with Astles, SDI will be getting a good reputation for being able to succesfully make this acquisition policy work.
Yes, would have been nice to see the fund-raising done at 14p or 15p, but from all accounts it sounds like they tried to get it away at a higher price. There is a danger if these things take too much time that the share price slips as those insiders somehow manage to chuck a few over-board, so 13p isn't the end of the world and probably where they were at to get the deal away in a timely manner.

[hastings] 20/12/2016 09:24

Some very valid points well laid out.I think it is also worth noting that Ken Ford was criticised by some for not partaking in the last placing also at a discount, yet is now effectively chastised for taking part this time round.I see both sides, but from a personal perspective happy to sit tight as I feel the shares have the ability to trade a good deal higher over the next two years if things pan out as expected.

[troutisout] 20/12/2016 09:15

A perfect example here of how placings bring up emotions in people that aren't logical.

1. I bet most PIs wouldn't buy shares in an Open Offer even if they profess to have wanted that for fairness.

2. It is not an ideal market to raise funds in and others have had far greater discounts and have had to use bucket shop flippers - the share price held steady here before the placing news.

3. The placing price is where the share price was only 4 months ago.

4. We have had one poster here point out he was offered an opportunity to take part in the placing at 15p and turned it down....isn't that proof enough that the Company/Brokers were trying to get it away at a higher price, but that others like the poster obviously weren't interested until the price was lower (he points out that maybe he would have been interested at 13p, but is that hindsight?).

5. I would say on the face of it, a good acquisition, paid for mainly with new capital at a price that historically is a good one (even though it has risen above that in recent months the rise allowed them to raise at 13p, if it hadn't risen from 13p in August then the placing could have been in single figures).

[greyingsurfer] 20/12/2016 09:00

I'm happy to accept that the acquisition is a good one. However, the terms of the placing stink - and also suggest the others are not that convinced by the quality of the acquisition.One of the "highlights" in today's RNS is that the chair has helped himself to 250,000 shares at a discount of nearly 30% to what he would have had to pay on the market over the past few days. It's not the sort of highlight that I want from companies I invest in.Of course they will argue that this was the quickest cheapest way to raise the cash. But it's not that cheap for the bulk of shareholders excluded from the deal who suffer dilution.I would have no problem with a 10% discount if there was really no practicable way to offer this to all shareholders. But this is far too much for a company that is not (we hope) in financial dire straights. My view is this has been cobbled together quickly to minimise hassle for those involved, and pass a bit if xmas goodwill about amongst.I will vote against. Not from any objection to the acquisition, but because of the way funds have been raised.Peter

[rhomboid] 20/12/2016 08:57

I'd have preferred an open offer alongside and/or a smaller discount qv.ABDP but I like the deal overall, its as big a deal as they could have reasonably contemplated and the price seems very attractive so I'm content to let my holding here grow with the business over time.

[shanklin] 20/12/2016 08:37

I guess its a bit of six and 2 threes in that the placing price is a bit p&*s poor but the acquisition price looks very reasonable, which is where the money raised is being directed. So, overall, perhaps it is Astles that are the major losers here rather than SDI, and the big winners are the placing participants.

At least SDI don't say the placing was oversubscribed, which would have been irritating, and do state that the acquisition will be earnings enhancing.

The big negative is that the placing make no shares automatically available to existing shareholders.

[hastings] 20/12/2016 08:13

Discount issues aside I like the look of the acquisition's core customers such as Rexam and it's ability to generate cash.Interesting too that it purchases products from Sentek, a nice tie up with further potential benefits for both.

[timbo003] 20/12/2016 08:06

Sorry, the memory is getting a bit fuzzy, I was approached the tentative placing price was 15p/share (not 16p)

[this_is_me] 20/12/2016 07:53

I am not impressed at being excluded from buying shares at 13p. I will vote against it.

[rivaldo] 20/12/2016 07:35

It's also worth noting that today's RNS says that "current trading of the Company is in line with expectations" for H1 to 31/10/16, which is encouraging.

This year's forecast was already for 1.7p EPS - will this be increased following the acquisition?

[timbo003] 20/12/2016 07:24

I was asked last week if I wanted to participate in this placing at 16p/share, my response was no thanks, why didn't you ask me last time at 8p/share?

I would have been somewhat more positive, had they told me that the placing was at 13p/share.

[rivaldo] 20/12/2016 07:22

Exciting stuff. Astles looks a very good acquisition - and at an excellent price.

£3.45m initial consideration and £4.8m on achievement of targets, compared to historic £0.87m PBT - that's extremely cheap. Especially if it achieves the £1.2m PBT necessary for the earn-out.

Plus there are synergies and the likelihood of additional Sentek sales to Astles, which is already a Sentek customer

The placing price is at too much of a discount, but I'd guess this was all done in a hurry pre-Christmas and the institution wanted their pound of flesh.

Overall this looks a terrific bulking-up and heavily earnings-enhancing acquisition.

[hastings] 20/12/2016 07:19

Agreed shanklin already pencilled in.Mind you if the price performs as well from here as from the previous placing I'll not be complaining.

[shanklin] 20/12/2016 07:14

hastings

The last placing at 8p in Oct'15 was at the share price prevailing at the time. Perhaps, if you do speak with management, you could ask why this placing is at such a huge discount?

Thank you.

[hastings] 20/12/2016 07:07

Another acquisition announced then, which taking a quick look at the profit on turnover looks excellent.Will take a closer look, catch up with the CEO and pen something later once a revised broker note is out.

[hastings] 23/11/2016 11:07

Bound to be a few sellers, although it appears those highly impressive institutional holders are sitting tight.

[rivaldo] 23/11/2016 11:03

Finally there are some shares available - online I can buy a maximum 50k shares at 18.9p.

[pj 1] 23/11/2016 08:35

10.5% spread tho so prob dummy trades tell more

[pj 1] 23/11/2016 08:34

6000 v 3000

everything else equal

[noble3r] 23/11/2016 08:32

does anybody have level 2 access? I'd be interested to see what (if any) orders we have on the BUY price. Since we know we can't buy any stock in realtime (i've even tried £50 this morning) an order must be placed.

Is it really the case that the MM's simply don't have any shares to sell? Our free float isn't that low - although I know they are tightly held :-)

[shanklin] 23/11/2016 08:25

At HL, currently impossible to get an online quote to buy 1000 shares.