Sdi Share Discussion Threads

[buywell3] 20/7/2019 09:01

I won't post very often on this thread so don't worry:

And buywell notes zero mention of ProReveal in the results; buywell can read between the lines better than most.

I will pass comment on the results just this once , regarding a couple of points which those people talking to members of the BOD might seek clarification on,

Namely:

Adjusted Operating Profit



Digital Imaging ... 2019= 1,954M ... 2018= 1,041M ( buywell= over 90% better )

Sensors & Control . 2019= 2,165M ... 2018= 2,007M ( buywell= only 8% better )

Other ............. 2019=(1,017)M .. 2018= (702)K ( buywell= loss 45% worse )



From this it seems obvious that currently the Digital Imaging segment is way out performing the Sensors & Control part of the company.

A) Why is that ?
Should future acquisition investment not be targeted here until Sensors & Control orders pick up.

B) What is Other ?
This was loss making in the 2018 results at 702K and has worsened to over 1,017M pounds which has in fact dented profits, now becoming an obvious concern.

From the results:

The Digital Imaging segment incorporates the Synoptics brands Syngene, Synbiosis and Synoptics Health, the Atik brands Atik Cameras, Opus and Quantum Scientific Imaging, and the Fistreem, Ionscope and Graticules Optics businesses acquired during the year. These businesses share significant characteristics including customer application, technology, and production location. Revenues derive from the sale of instruments, components for OEM customers' instruments, and from accessories and service.



The Sensors & Control segment combines our Sentek, Astles Control Systems and Applied Thermal Control entities, and the Thermal Exchange and MPB Industries businesses acquired during the year. All of these businesses enable accurate control of scientific and industrial equipment. Their revenues also derive from the sale of instruments, major components for OEM customers' instruments, and from accessories and service.

So buywell says:

IMO .... Other .... needs explaining in more detail

dyor

[pireric] 19/7/2019 18:04

Will update the header over the weekend. On the calcs Ron; H1 the year prior, they haven't disclosed the organic growth, so actually much harder to figure out than I thought - If I recall, they had some big deals in Q4 of that year though, which makes me think that organic growth will have been at least to a degree H2 skewed even if total growth was flat between the halves

Total organic growth for the year prior to last was c. 11%. So quite possible once you start putting in seasonality into that (i.e. H2 likely stronger), that there would have been a 3-5 point swing in growth rate comparatives.

Still, to go from 11 to 5 implies pretty much no growth in H2 last year so won't account for the whole slowdown. So looks to have either been some underlying slowdown, or the comparative was much tougher in H2 the year prior than just 3-5 points, or there was some non-recurring revenue in the prior year H2 (which does somewhat correlate to what they've mentioned in the past).

Stepping back a level, 5% for the year is good and absolutely happy to take that year in year out, but the phasing of 11 in H1 down to 5 for the full year is clearly the small negative within that, esp when now up against a strong 11% organic comparative this year

That potentially poses a challenge for the share price over the next 6 months IF we were to believe SDI don't do any acquisitions, but that seems unlikely. And combined with a pretty low rating here, I think it's fine on balance, but probably do need an acq to get the share price recognised again.

[ronwilkes123] 19/7/2019 11:18

Actually rebought a few days later for a trade on results which failed - my posts were frustration led yesterdayApologies

[buywell3] 19/7/2019 11:15

This you Ron?

Comments on #SDI & #DRV (11th March) coincide with ones you made on these boards.



Sold SDI on 8th July?


ronwilkes12319 Jul '19 - 10:57 - 154 of 155
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I’d repurchased in the last few days, as a trade on the results. At 53p, so I’m now stuck in. I should really take the loss. I probably will.

Yesterday I let frustration get the better of me apologies all.



Ryan Wilkes
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@RyanWilkes20
Jul 11
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Looking like an excellent move to sell down #sdi recently, now back under 50p with a 10-20k block seller

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Ryan Wilkes
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@RyanWilkes20
Jul 8
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Sold #SDI lack of any positive movement week before finals means I’m out - may return but under 50p

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Ryan Wilkes
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@RyanWilkes20
May 29
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#sdi those who bought at 64p now selling at 51p silly imho

[xajorkith] 19/7/2019 11:01

We all get frustrated here at times (BUR has been doing my head in), so no worries on that account.

Always happy to read a contrarian view when well argued.

[ronwilkes123] 19/7/2019 10:57

I'd repurchased in the last few days, as a trade on the results. At 53p, so I'm now stuck in. I should really take the loss. I probably will.Yesterday I let frustration get the better of me apologies all.

[xajorkith] 19/7/2019 10:54

This you Ron?

Comments on #SDI & #DRV (11th March) coincide with ones you made on these boards.



Sold SDI on 8th July?

[ronwilkes123] 19/7/2019 08:36

Despite my frustration yesterday was looking forward to reading pierics calculations - I don't think he's posted them yet looking on here and twitter

[mrnumpty] 18/7/2019 13:57

Ronwilkes . Thanks for such a civil reply - I had expected something far worse . I believe your explanation that you bought too high and tried to sell too low . Believe me , I’ve done the same often enough , hence my name . The price appears now to be recovering . As I wrote , I shall await the comment in SCSW on 10th August , but don’t ask me to paste and copy here . However , SDI forms part of SCSW’s Growth Portfolio of its highesg conviction tips . By the way , don’t think I’m a clever investor . Anyway , to put things into perspective , does anybody have anything helpful to say in comparing SDI with our larger comparator company Judges Scuentific ?

[ronwilkes123] 18/7/2019 12:27

Good point mrnumpty, I suppose I'm locked in now having bought at 53p. After the frustration of this morning has abated I'll fade back into the background too, let the smarter people discuss.

[mrnumpty] 18/7/2019 12:24

Ronwilkes . I’m intrigued by your comment if 8.05 this morning , namely that “ Bought some a few days ago and now can’t shift them “ . To me this suggests that you are inexperienced , as the transactions you refer to are the opposite of the old stock market adage “ buy on
the rumour and sell on the news “ . Anyway , why put negative comments on a publicly open forum like this , since those comments might tend to encourage further selling , thereby forcing the price down further and making the market makers less likely to want stock ? For me , I shall hold and look firward to the next copy of Small Company Share Watch on 10th August .

[cockerhoop] 18/7/2019 12:04

Hastings, Eric,

I'm slightly confused by their organic LFL methodology.

In the Finncap note they use FY2018 rev (14.496m) as a base, add 0.7m organic, 0.9m for 2018 acqs (ATC, QSI) and £1.3m for 2019 acqs.

My issue is that the base figure FY2018 includes 7 months of ATC rev (0.9m) as it was purchased in Aug 2017.

If i'm reading this correctly it's skewing the organic growth downwards.

[xajorkith] 18/7/2019 11:45

SDI is a "buy & build" company delivering operational efficiencies through economies of scale. It's not all about organic growth.

Yes, this has slowed, but it is clear from the operations section that they expect this to increase going forward, referring to capex & stating:

"The Group has made these investments to facilitate future growth of revenues and profits while also growing in the current year."

Finncap appear to agree & have upgraded their forecasts accordingly, leaving SDI on a rolling PE under 14 below 50p.

Clearly "sell on news" out in force today, but still a LTBH for me given their proven quality & continued opportunities going forward.

[hastings] 18/7/2019 11:38

Good point Eric. Just to throw my thoughts in, I'm pretty sure the 11% figure was skewed by the previously highlighted one off order for ATIK from a large OEM customer, I'll clarify when I speak with management tomorrow. Personally I'm happy with organic growth between 5-10% per year and interesting to note that FinnCap is forecasting 6% for the next year, so not declining!I'd say a good measurement of the business health is a 26% increase in cash generation along with profits 24% higher. Anyway, each to their own and I've taken the opportunity to average up a touch this morning.

[mrnumpty] 18/7/2019 11:35

In the latest edition , which reached subscribers nearly two weeks ago , Small Company Share Watch anticipated adjusted PBT of £ 2.9 million , as opposed to the £ 3.0 million just announced . No doubt there will be a comment in the next edition of SCSW , which is due too reach subscribers on 10th August , though three weeks is a ling time to wait in the stock market . Surely the share price movements are nothing more than an illustration of the old adage " buy on the rumour and sell on the news " .

[pireric] 18/7/2019 11:25

You have to work out the base comparative Ron. For illustration, if the H1 base was -15% then 11% organic wouldn't look good. Equally, if the H2 base was +12%, then an implied second half growth rate of low single digit # is actually good

Haven't done the calc myself yet but will this eve

[ronwilkes123] 18/7/2019 10:56

True pieric but people look for organic growth numbers it's slowing and that's a warning sign. Imo it's not investable this high up.

[pastybap] 18/7/2019 09:33

In fairness anyone with half a brain knew his posts were nonsense. If I recall correctly, that's why this board was started.

[nimbo1] 18/7/2019 09:27

this is what happens when buywell constantly ramps and everyone from Twitter to Rosier jumps on board...no marginal buyers left...

[pireric] 18/7/2019 09:20

While true Ron (and I pointed out the slower org growth on twitter), I need to spend 5 mins to work out the comparative for H2 to see how tough it was and whether it was a slowdown in organic growth or just a high comparative. Will do that later. H1 next year is a high bar to jump over organically

All considered, I'm very happy holding the rest of mine as going to look like low to mid teens P/E multiple before any further acqs, which is attractive

[ronwilkes123] 18/7/2019 09:17

Down 8% market doesn't like the results

[ronwilkes123] 18/7/2019 09:14

Terrible results buywell stop jazzing them up - underlying growth in the main business is slowing - rating is now too high

[buywell2] 18/7/2019 08:59

It would seem that Finncap have upped their forward guidance to 60p

Based upon either


1)the fact that SD hit over 62p a couple of months ago following Investors Chronicle positivity V the stock and recent acquisition news or


2)that the PBT for the year to come is expected to now rise to 4.2M , an increase of 40% on the numbers released today of 3M



buywell notes that at 50p , an increase of 40% = 70p



Thus have they done their maths wrong ? or

Does forwards guidance = backward share price numbers already hit ?

This seems to now be the case for the previous 2 years

[ronwilkes123] 18/7/2019 08:52

The rating is way too high if organic growth is slowing. The share price needs to be pared back. Anyone expecting 60p plus will have a long wait imo