Sdi Share Discussion Threads

[worldwidet] 08/4/2024 20:25

For more than a year now, all the warning lights have been on (The massive selling of executives and the fact that no executives are buying massively even though the share price has fallen 75%). I have shown them but the permabulls have consistently ignored them. Sp -75%. Congratulations bulls.
It is sad how SDI has developed. I had hoped for something different, but I recognized early on where the journey was heading.
Whether they achieve the reduced forecasts in the short term or not is irrelevant. SdI has massive structural problems.
1. managers who are not personally committed to the company in the long term with their own money. No executive DNA of long-term thinking managers who feel like owners.
2. no M&A competence and no M&A networks. SDI always relies on consultants and intermediaries. SDI has no network of its own and no experienced and globally networked M&A executives.
3. no high-quality existing business that produces stable FCF. Past acquisitions were too expensive and of questionable quality. This can be seen in the Monmouth disaster and the collapsing FCF
4. high debt / interest burden and thus an M&A wheel that has come to a standstill.
5. poor corporate communication and poor corporate governance.
The way the CEO's departure was communicated and forecasts that were massively cut a few weeks after the announcement.
7. the new CEO has no M&A expertise. A new COO/M&A manager has to be found and sdi has to fall back on external people because there are no capable managers in its own ranks.
8. the CEO currently seems to be concentrating on the existing business, probably for a given reason. There seem to be massive problems here.
9. the CEO seems to be concentrating on M&A in the USA. Why? UsA is expensive and complex DD is necessary. Risky.
A lot can happen here. I expect the next misstep in the foreseeable future. My opinion. Make your own DD.

[nchanning] 08/4/2024 16:50

Have to agree that the fact that the rest of the board were buying at 120p a few months ago and are now not interested at half price is concerning . On the other hand all that really needs to happen for the price to be 100p + again is to confirm that they are still on track to meet expectations for FY25 . (Can forgive a small miss on the current year )

[worldwidet] 05/4/2024 10:08

I think the management should take £100k or £200k and buy a lot of shares if they think 59p is a fair price. But they have no desire to make relevant purchases and will certainly know why.

20-30p share price ?

waiting ...

[rivaldo] 18/3/2024 14:01

News of yet more encouragingly boring institutional buying :o))

BGF Investments have now gone above 13% with 14.375m shares. So they've bought another 1.24m shares in the last week and almost 3m shares in the last three weeks:

[nchanning] 18/3/2024 10:01

David Cicurel is an absolute legend but SDI on 10 x forward earnings is surely better value than Judges on 30x , when SDI has the size advantage to make smaller acquisitions at better prices . As long as new CEO doesn't butcher the model by making expensive acquisitions, trying to integrate the businesses , or issuing equity at low valuations

[nchanning] 18/3/2024 09:02

They have a perfect model to copy in Judges , just buy the businesses on their own merits , don't integrate them , share best practices . SDI still small enough to make acquisitions at tiny multiples that wouldn't move the needle for Judges

[nchanning] 18/3/2024 08:53

Don't love the emphasis on cross-selling and strategic acquisitions

[nchanning] 18/3/2024 08:47

There's only 1 thing I really want to hear from the new CEO , that he's firmly committed to the strategy of buying niche scientific businesses at 4-6 x EBIT, funded from debt and cashflow . Acceptable if he wants to spend a year improving operational performance and repairing balance sheet first

[rivaldo] 18/3/2024 07:35

Good to see the CEO buying another 14,000 shares at 71.25p:

[worldwidet] 14/3/2024 13:54

A change from rivaldo's boring unimportant copy paste contributions...

A CEO without M&A expertise. Executives who don't buy shares because they supposedly have too low a salary to buy shares. Is this what SDI needs?I sticking with it... not investable (my personal opinion).


2 investors met with the new CEO and CFO and spoke at length.


Read and form your own opinion here.


From the report:

"...On Stephen Brown and Strategy: SDI Group's investment thesis changed from being a serial acquirer to a turnaround company. Right now the company is at an inflection point, and I leave the meeting not knowing what the business model of the "new SDI" is going to be. Are they going to go back to their past business model of serial acquirer (inorganic growth), or are they going to pivot to an industrial holding business model (organic growth)? I would like the answer to be the first option. However, the new CEO seems to have the right qualities for the second strategy (he has a background in operations and product development, and would make a great COO), but he does not have the qualities needed to lead a serial-acquirer (Mike was an expert in financial engineering). Everything will depend on the person they bring in to lead the M&A, his capabilities and, above all, how much they let him do and undo. We shall see..."

The original is in Spanish you have to translate it.

Here is the full length:

[rivaldo] 11/3/2024 08:59

BGF Investment Management are still buying. They now own 12.62%, or 13.134m shares - so they've bought another 1.66m shares in just the last two weeks:

[rivaldo] 08/3/2024 09:27

FYI Octopus AIM VCT2's results this morning had this to say:

"SDI Group disappointed a couple of times over the year due to the end of a contract with Atik cameras, which had been lucrative over the Covid period. However, we are encouraged by the recent change in the management team and the new CEO comes with a wealth of operational experience in the sector."

[dr biotech] 26/2/2024 11:55

LOL, why would he have heard of Lifco?

Might as well asked him whats the capital of Burkina Faso.

What's your definition of "heavily diluted"? 10%? 5%? 0.5%

If they can find a transformative deal then they should go for it. But I would attribute ZERO credence to a twitter poster who can apparently (and I doubt he did) chat with a CEO but asks such stupid questions.

Was it you? or one of your aliases? You have come up with similar guff

[worldwidet] 26/2/2024 11:24

SDI has no CASH for relevant acquisitions. The FCF is melting, the debt and thus the interest burden are exploding.
The companies subs to be losing value massively (see the Monmouth disaster) and takeovers are becoming increasingly expensive (high M&A multiples).

Shareholders are already being heavily diluted with executive bonus options.

I could well imagine that the new CEO (who has no solid M&A history) will be inclined to issue new shares to experiment with M&A.

On Twitter a comment from someone who spoke to the new CEO (I don't know how credible this user is, check for yourself)

"Talked to $SDI.L new CEO. Was not impressed. He asked what price discipline means (?), had never even heard of $LIFCO and showed willingness to issue shares for a "transformational deal." Management does not understand the basic economics of serial acquirers. Hard pass from me."

Source:

[death by donut] 23/2/2024 13:14

Enough of the irrelevant posts already Riv :-)Keep up the good work.DbD :-)

[rivaldo] 23/2/2024 11:47

BGF Investment Management continue to buy - they now own just over 11% with 11.47m shares:



Since early December they've bought just over 3m shares.

[rivaldo] 22/2/2024 11:48

Amusing that WorldwideT feels so desperately the need to have a dig at me when I'm merely acting as the messenger in factually posting others'/institutional buying, plus making just the one entirely balanced general summary of SDI's current status.

WorldwideT might do himself a favour by sticking to the facts rather than getting personal.

Almost all my shares were acquired in the 10p days, and like any sensible investor I've taken nice profits along the way. And I perceive that there may be good money to be made here from this point, whether or not there are short-term bumps in the road, so will continue to post here when there's something meaningful to say or something interesting happens.

[hastings] 22/2/2024 10:07

Talk about the kettle calling the pot black!I recall you're mentioning that Institutions were selling out and that was indicative of the story.

[isa1m] 20/2/2024 15:41

I'm sure BGF have not added without some informal discussion with SDI board following (or possibly preceeding?) the CEO change.
Other shareholders also need to know more about it, but it's a positive sign.
New CEO still very much to prove himself. Need to demonstrate that they can still source and execute value-creating acquisitions, as well as start to manage the existing lot. Economy stagnant. But I'm ready to call a significant upside in excess of downside here.

[rivaldo] 20/2/2024 07:10

BGF Investment Management continue to buy - they've bought around another 600,000 shares in the last week, and now have 10.18% (up from 9.57%), or 10.59m shares:

[rivaldo] 13/2/2024 12:04

BGF Investment Management have been buying - they now have 9.57% (up from 8.03%), or 9.96m shares:

[rivaldo] 26/1/2024 09:32

I've been away from the BB for a week, so just catching up comments-wise - the RNS was a surprise to say the least!

Ken Ford is a highly successful and experienced guy, so there are likely to be good reasons for Mike's departure. My gut feeling is that Mike has done a terrific job in getting SDI to where it is today, but that he's not necessarily the man who can extract maximum organic growth from the melange of businesses which have been acquired as he's perhaps always looking for the "next thing" and not necessarily running the existing business in the best manner.

Nevertheless, it shouldn't be forgotten that Mike has grown what was a tiny microcap to a now £67m m/cap company and taken the share price from 10p or less (where I invested here) to the current 60p+ and at one time 200p. And it's good to see Mike thanked in the RNS and Mike being similarly complimentary in his comments.

With 5.8p EPS forecast for the year ending soon, and 7.4p EPS for the year starting on 1st May, it's possible that this is now a fantastic buying opportunity on an incredibly low P/E - if those figures are merely met then the share price could double or more.

On the other hand, if you believe Mike's departure presages a further warning then there may still be further pain to come. Certainly the macro background isn't promising. You pays your money....

[worldwidet] 24/1/2024 19:10

So the same as with Monmouth? there was also the handover to the new CEO and the Monmouth EX owner wanted to continue working as a consultant for SDI. The EX Monmouth owner was never heard from again. The new CEO took over and then there was a massive write-off in which Monmouth lost about half its value.
At Fraser, the former owner steps down as CEO and, as you write, he should continue to work as a consultant. A new external CEO takes over and a few weeks later, after the new Fraser CEO has taken over, the SDI CEO leaves SDI in a hurry.
Do you recognize any similarities? Could be a coincidence. Or not.
Perhaps creedons DD grievances were so serious that the board got too hot to handle. A Monmouth disaster 2.0?
I don't believe that the current CEO (EX COO) was intended to be CEO. An engineer with no M&A experience as CEO?
The departure of CEO Creedon looks rushed and unplanned. In the middle of the month. No announcement, the RNS delayed and no TU. I think SDI is in an internal review process and the board and management are not yet aware of the real disaster which is why there is no TU yet.
I could be wrong but the hasty departure of Creedon, the amateurish communication and the fact that none of the management and board are buying at ~60p shows me that there seems to be massive problems. My opinion! No recommendation!

[nchanning] 24/1/2024 18:33

As discussed on August 11th presentation , former CEO gave 6 months notice for personal reasons and stayed on as a consultant . Already announced James clothier as replacement then . Fake news pal