Sdi Share Discussion Threads

[hastings] 26/9/2018 17:10

Also pleased to see the Director buys and this piece too https://www.synbiosis.com/news/major-london-hospital-uses-protocol-3-automated-colony-counter/

[cfro] 26/9/2018 15:27

Great news with both the Ned and CFO share purchases. Shows confidence.

[nw99] 26/9/2018 15:07

Added more

[cheshire man] 26/9/2018 14:01

Always reassuring to see and a nice move up on the chart :-)

[rivaldo] 26/9/2018 13:52

RNS out - great to see the CFO making his maiden purchase of shares, with around £25k at 42.8p (and a small purchase by an NED):

[supernumerary] 26/9/2018 10:46

Garbet - I'm no expert, but I don't think they're claiming their solution is particularly novel, only that they can manufacture a pure version at scale, at an economic price. They also seem to be claiming that it stores better than previous versions - a function of purity? - I dunno.

There is a link to a science paper on the site apparently justifying their claims, but I'm not involved enough to spend the time on it. I expect buywell will eventually give us all a brief 2000-word summary...

[garbetklb] 26/9/2018 09:43

Hi Supernumerary

I've just had a quick look at Briotech's website. At a quick glance, the magic solution (pun intended) appears to be Hypochlorous Acid (HOCl), but not just any HOCl, a special Briotech formulation. Not entirely sure how special their formulation can be of a molecule consisting of 3 atoms - H, O & Cl.......

It all sounds a bit too wonderful. Much as I'd love a wonder cleaner to have been found, I rather doubt this is it.

[supernumerary] 26/9/2018 09:06

These people claim to be able to disable 100% of prions in a simple cleaning operation: If so, it could be a game changer:

DESTROYING PRIONS

Prions are abnormal, misfolded body proteins that go out of control and begin to multiply themselves, spreading throughout the body and invading the brain. Prions are most commonly transmitted orally, but can also contaminate medical and surgical instruments, transplanted tissues, and equipment used in food processing. A new, fast, convenient and safe method for decontamination of medical instruments, surfaces, and tissues—by simple immersion in an aqueous solution of Briotech’s pure BrioHOClTM—can overcome a critically important deficiency in infection control today. It can mitigate risks, and limit liabilities related to healthcare procedures and hospital acquired diseases.

Prion diseases are most widely known as the cause of Mad Cow Disease (BSE). Prions also cause Creutzfeldt-Jakob Disease (CJD) in humans, a fatal dementia with a long incubation period. Recently, research has shown that most other chronic degenerative diseases that lead to dementia, including Alzheimer’s, result from prions. Currently untreatable, and inevitably fatal, controversy swirls around their possible transmissibility as referenced in Nature (nature.com/news/the-red-hot-debate-about-transmissible-alzheimers)

Prions are uniquely resistant to the disinfection and sterilization procedures in common use in healthcare practice today. Extreme measures are needed. Current prion decontamination protocols are hazardous to people, damaging to instruments and surfaces, and therefore impractical for transmission control. “Briotech has developed an enabling technology, one that offers for the first time a practical and safe way of destroying infectious prions, the disease agents at the very top of the food chain when it comes to resistance to disinfection measures,” said Jeff Williams, PhD, BVSc, Chief Scientific Officer at Briotech. “We believe we’ve just exposed the tip of the iceberg when it comes to revealing the full potential of the pure HOCl in controlling and preventing many transmissible diseases. That’s so important today when rampant antibiotic resistance is challenging established approaches to infectious disease management all over the world. The discovery reported in PLOS Pathogens has opened new avenues for researchers to explore in understanding the relationship between the HOCl made in the brain, its possible involvement in prion inactivation there, and the disease processes that lead to dementia. Understanding those processes is one of the most urgent priorities facing biomedical science at this time.”

[hastings] 26/9/2018 08:52

The wipes do not remove all of the dangerous stuff hence new DOH guidelines for surgical instruments which has rightly raised the bar.ProReveal does just that identifying and revealing.I'm sure Buywell could explain better he's posted ample stuff on CJD etc.

[gdjs100] 26/9/2018 08:42

Aren't Tristel wipes used in 90%+ of hospitals to clean endoscopes? How does ProReveal fit in alongside that? How many endoscopes continue to be cleaned using machines rather than using the wipe system?

[rivaldo] 25/9/2018 23:26

Great report hastings, cheers. Everything's looking extremely positive.

For the record, SDI are presenting on October 29th for Blackthorn Focus at 78 Cannon Street in London (along with MATW and SGM) for those interested in applying:

[cfro] 25/9/2018 18:10

Thanks Hastings for your effort in attending the AGM and the extensive write-up.

[interceptor2] 25/9/2018 17:58

Really appreciate the write up hastings, interesting to note that the chap who assists with acquisitions worked for Judges for a time.

There is much detail to absorb in your write up, think I will it read again.

[pugugly] 25/9/2018 17:53

Hastings - Many thanks for write-up - Most interesting and useful - Good to hear ex Judges man on board - If SDI can do as well as Judges or even half as well potentially a long term core holding (imo)

[hastings] 25/9/2018 17:40

Here we go, hopefully of interest.


The perfect morning for a bike ride to the other side of Cambridge, where I duly arrived with a good 15 minutes to spare.
On my arrival, it was good to meet two other private investors who had travelled to the AGM where we were soon joined by the SDI people who had just concluded a board meeting.

Fortunately we convened in a room large enough to seat everyone which included representatives from each arm of the Group, including the chap who assists Mike Creedon and Ken Ford in identifying potential acquisitions, (he has in the past worked with Judges too).

After the formal business Ken Ford opened the meeting up to questions which saw each of us putting forward various points that also carried on after the meeting was concluded.
Rather than say who asked what, I'll just give a summary although given that we weren't together the whole time, there may be one or two aspects that I wasn't privy to.

The acquisition was not surprisingly raised and they agreed that it was a good one executed at a good price for SDI.
The background is that Applied Thermal Control which is also based in Leicestershire was already aware of Fistreem and had raised its presence to the board. It appears the main player of the Fistreem business is in his seventies now and was looking to exit.
No doubt the various pre-nuptials were played out before a tying of the knot, where now complete, there would certainly appear to be potential in terms of synergies going forward as it does indeed look another good fit.

In terms of a positive contribution to the Group, Fistreem will be wholly earning enhancing in its first full year, the FD John Abell pointing out that the performance in the remainder of the current year will include acquisition costs, although there will be a small positive benefit.

Expanding on the buy model, it was pointed out to us that SDI has a strict criteria for bolt-on-buys particularly where Mike Creedon is concerned, who is keen to not overpay, rather secure a deal at a good price to the company and shareholders.

There are it appears plenty of potential targets and SDI has a strong pipeline of these in what is a very fragmented space, many smaller players being out there which wouldn't appeal to the bigger boys, but do make for ideal earning enhancing additions.
There have however been a couple of instances where SDI has walked away, which is no bad thing in the grand scale of things.

With the banking facility in place (which could be upped if they chose) and positive cash on the balance sheet they can do two or three more similar purchases with this mix, although further ahead they wouldn't rule out a placing to support something larger.

On this aspect Ken Ford said that they are extremely mindful of not biting off more than they can chew, so I don't think SDI would ever over reach, more a case of continuing the current way of doing things.

There is certainly nothing planned in terms of a placing at present, but both Ken and Mike said that if they were to undertake a raise again in the future, this time there would be some provision in place for private investors to take part alongside the Institutions the latter of which would readily support the process.

The various aspects of the company are pleasingly all going well as per the TU, but we also heard more close at hand from a couple of those.

ATIK was represented by Steve Chambers who filled us in on the purchase made earlier this year of assets and IP of Quantum Scientific Imaging.
The background here was that Quantum's owner had passed away which left the business seemingly without direction thus opening the door for ATIK to acquire the brand.

Chambers pointed out that Quantum had a good reputation and served the higher end of the market and now sits nicely alongside its own products.
The real positive though is that through Quantum the profile of ATIK's offerings have been raised positively providing for new or expanded markets.

Next up for a word was Kate George sales and technical director at Synoptics who filled us in on ProReveal's progress.
As far as the NHS goes she says ten per-cent of the total Hospitals that should be conforming with DOH guidelines have now adopted the system and they continue to push with the remainder, but it is difficult dealing with the NHS.
Perhaps more positively there are talks now with the actual washing machine manufacturers which with a more recent development has seen a player focused on the cleaning of endoscopes improving the cleaning process which would as part of its operation include ProReveal.
Kate also confirmed that the wider Synoptics division is now into a second year of profitability having been for so long operating at break even.

As a company, Ken Ford confirmed that they will only release news when it is required or noteworthy, adding that they are not into trying to fluff the share price up. He's also very relaxed about the latter at present and is intent on building the business to a substantial size, much greater than the current market cap.

John Abell added that since he came on board he's been impressed having worked in much bigger organisations and wonders just how Mike managed to do so much on his own, which I think is what many of us have thought, so a good addition to my mind.

Going forward, Abell talks of the company now needing to get the earnings per share up, which would then see the share price follow to the benefit of investors.

Potential dividends were also raised and Ken Ford said this had been discussed and could be implemented in the future for a progressive path without affecting the buy-build strategy.
He does point out that high cover would be a prerequisite and talks of 4-5x being the marker.

All in all a good hour well spent where it was nice to be warmly welcomed alongside catching up with a couple of very nice fellow investors.

[cheshire man] 25/9/2018 13:19

Will look forward to that hastings :-)

[ihatemms] 25/9/2018 13:08

Thanks from us all Hastings - much appreciated.

[hastings] 25/9/2018 11:51

Excellent AGM three of us PI's present, I trust they were as impressed as myself. I'll add comment in due course.

[garbetklb] 25/9/2018 10:46

I'm much happier with SDI's policy of small, steady, acquisitions than trying to find the "transformational" deal that seems to destroy value. Couldn't make the AGM this year.

Hastings - wonder if the BOD would consider holding a future AGM on site and combining with more of a presentation about the business / tour. Although the Cambridge site only produces a small % of their range, so maybe less practical. Also, their meeting room is rather small!

[brucie5] 25/9/2018 10:30

Great share, great management, back in. (Why did I ever leave?)

Stocko has this as a Martin Zweig Growth stock, of which the great man says, "I've found that investors who rely on crystal balls frequently wind up with crushed glass. I'm satisfied if I can predict a market trend, get in tune with it and stay with that trend for as long as it lasts."

[pireric] 25/9/2018 10:27

Theoretically also depends on the lost interest on the cash, seasonality of the Fistreem business etc.but

Nice acquisition, nice trading update. Another building block in place :0)

[sue1alan] 25/9/2018 09:46

Hastings,

If possible, could you ask the following question at the AGM.

Is the acquisition immediately earnings enhancing?

Why the question.

It is a cash buy and was profitable in 2016/17. Why therefore the statement... “ is expected to be earnings enhancing in its first full year of ownership”. Surely,if still profitable it would be earnings enhancing in SDI’s current year.

Thanks. Alan

[hastings] 25/9/2018 09:40

Steady as she goes, it's been a nice journey getting to where we're at now, more of the same please. I also wouldn't be surprised to see another acquisition completed in the coming months.