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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Sdi Group Plc | SDI | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| -0.60 | -1.02% | 58.00 | 16:35:09 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 59.00 | 58.50 | 59.00 | 58.00 | 58.60 |
| Industry Sector |
|---|
| ELECTRONIC & ELECTRICAL EQUIPMENT |
| Top Posts |
|---|
Posted at 30/10/2024 08:52 by worldwidet SDI had a meager ~£1m of its own cash to finance the acquisition. Another ~6m GBP had to be borrowed expensiv credits?1st takeover multiple ~7.3x EBIT (hurdle rates ?) 2. takeover almost completely financed with expensive loans (SDI will certainly have to pay 3.5-4% interest?). Own business generates far too little free cash flow! It looks to me like another far too expensive acquisition. Debt is increasing massively but FCF is not! My personal opinion. |
Posted at 30/10/2024 08:35 by rivaldo Cavendish have raised their EPS forecast slightly after today's news to 6.1p EPS as stated above. And that's likely to be conservative given the usual guidance to analysts.Personally I'd rather see SDI growing via acquisition and showing that it can actually achieve improved results via cross-selling and other synergies. There's much greater upside over time from this than from a share buyback. I also suspect that the vendors probably wanted to achieve a sale prior to today's Budget moves on capital gains, which increases the likelihood that SDI achieved a good value acquisition price. |
Posted at 30/10/2024 08:16 by hydrus SDI are expected to generate £8m EBITDA on mcap of £55.4m so a ratio of 6.9They are buying a company on a (net) purchase price/EBITDA ratio of 7:3At an EPS level therefore it is likely to be dilutive. Therefore surely they would have been better off just buying their own shares back and that doesn't even take into account the transaction costs. Can't see the attraction of SDI unless they produce organic growth AND buy companies that improve EPS. |
Posted at 10/10/2024 11:56 by red ninja Tipped in Shares Magazine todayThree Small Shares To Buy Now A casual glance at the share price chart might put a quick end to investors’ research into SDI (SDI:AIM), but that’s a mistake, in our view. This is a small cap company which has stuck to its largely successful knitting for years, and we expect its fortunes to significantly improve over time. SDI is a collection of subsidiaries involved in the design and manufacture digital imaging, sensing and control equipment used in life sciences, healthcare, astronomy, manufacturing, precision optics and art conservation applications. It’s a buy and build model which closely resembles that of health, safety and environmental kit maker Halma (HLMA), a constituent of the FTSE 100, buying good value businesses which add consistent cash flow and profits to the overall company. Not only does SDI’s growth stretch back multiple years, it has been high-quality growth. Gross margins typically run at around 60% to 65%, high for a manufacturing business, while returns on investment and operating margins are in the double-digits and above industry averages. The end of the pandemic has tossed many a challenge at SDI as customers de-stocked after a prolonged spell of over-ordering. Higher borrowing costs haven’t helped either, but both issues now seem set to improve. This leaves substantial upside on the table, partly as SDI continues to find attractively priced acquisition targets to supplement organic growth, and from a change in market mood. This is a stock which has previously traded on a 20-plus PE (price to earnings), now just 12. History is on its side, we believe. Over the last 10 years, SDI has grown turnover from £7 million to £65.8 million in the year to 30 April 2024 and adjusted operating profit from around £57,000 to £9.6 million. The share price has increased from around 10p to over 200p at its peak, yet today is available at 50p. Not for long, we suspect. [SF] |
Posted at 08/10/2024 07:48 by rivaldo Late RNS yesterday shows Shareholder Value Beteiligungen Aktiengesellschaft, based in Frankfurt, as a new 3.94% shareholder with 4.12m shares:Assuming I'm not mistaken - they weren't on the prior company list of major shareholders AFAICS. Their web site is here: "The business purpose of Shareholder Value Beteiligungen AG is to invest its own funds primarily in listed companies. The aim is to achieve the highest possible increase in the value of the portfolio through price increases and dividends received. Shareholder Value Beteiligungen AG follows the concept of stock picking, which is based on investments in selected individual companies - and not in entire sectors and markets. The aim is to concentrate on a certain number of stocks. This achieves sufficient risk diversification (portfolio diversification) and at the same time enables effective focus on the selected individual stocks. This strategy enables an intensive analysis of the individual company, the balance sheet quality, the management, the products and the markets. The investment strategy of "value investing" is followed, i.e. investing in stocks with high substance and high returns. Due to its existing know-how, Shareholder Value Beteiligungen AG focuses primarily on investing in small and mid-caps, i.e. small and medium-sized companies with a market capitalization of one billion euros. Due to the limited investment volumes, such stocks are rarely in the focus of banks and other large institutional investors. Accordingly, they tend to be neglected by their analysts. This repeatedly opens up exceptionally favorable investment opportunities in excellently positioned companies that are often world market leaders in their respective niches. The investment horizon for equity investments is generally medium to long-term. However, individual short-term opportunities are also taken into account. The stock selection focuses primarily on German, Swiss and Austrian stocks. This deliberate regional restriction makes it possible to have a sufficiently reliable overview of the markets. With this investment approach, the initiators have achieved sustained success over the past decades, including as managing director of the R 3000 investment club." |
Posted at 26/9/2024 09:04 by rivaldo So:- full year results are expected to be in line with 6.0 EPS forecasts - net debt reduced strongly in H1 by almost £2m - H1 has been slow, but given we're now half way through the period SDI hopefully have the revenue visibility to back up their belief that the final outturn will be nicely in line. Either you believe the above, in which case today's fall is overdone and SDI are a complete bargain on a P/E of 8.9. Or you might not trust that trading will improve as flagged in H2, in which case any downside is hopefully priced in anyway at the current share price. OT : apologies dd46, my post crossed with yours! |
Posted at 17/9/2024 08:20 by rivaldo FYI the recent September issue of Techinvest reviewed the prelims and concluded thus:"SDI completed a strategic review during the year, leading to a re-segmentation of the portfolio under three areas: Lab Equipment, Industrial & Scientific Sensors and Industrial & Scientific Products. Management sounded confident that this will enable further synergies for complementary businesses. The five-year CAGR track record for the group remains impressive, at growth of 28% and 20.1% in revenue and adjusted operating profit respectively. Acquisitions have played a key part and management see potential for one or more further additions in fiscal 2025. SDI’s expectation for longer-term organic growth, following the strategic revenue, is in the range of 5-8%. Consensus broker forecast for the current year is net profit of £7.5m and earnings per share of 6.0p. We feel that a prospective P/E of 10.8 represents excellent value given the rate of top- and bottom-line growth SDI has been delivering in recent years. Buy." |
Posted at 21/5/2024 10:04 by worldwidet @NChanningThe problem is such successful companies as JDG HLMA CSU etc. are not as easy to copy as you might think. The few very successful serial acquirers have a very special DNA of executives across all management levels. It takes intelligent managers who are firmly rooted in the serial acquirer and who live the serial acquirer principle. They need the managers to think like shareholders because they own enough shares themselves. JDG HLMA etc. Have strong M&A structures. They have built up strong networks over the years and are firmly networked in the TAM and are not dependent on advisors and intermediaries. SDI does not seem to have a network. They always have to rely on intermediaries who are expensive. The managers at subsidiary level are busy with their own companies and have no bolt-on M&A ambitions. The culture of the executives at SDI is a shambles. They don't own shares and don't think like shareholders. I see SDI bobbing along. Every now and then a small overpriced acquisition of mediocre companies that come through intermediaries. But I don't see SDI becoming a high quality serial acquirer in its current state. I'm also not sure if SDI really wants to be that under the new CEO. My opinion. |
Posted at 06/6/2023 08:11 by worldwidet Halma 38x FCFSDI 30x FCF If you think SDI is worth paying 30 times FCF then buy. I think the risk premium at the current valuation is too low to buy. SDI lacks a strong management team that is ready to take SDI to the next level. But SDI executives hardly own any SDI shares, so there is no incentive to take SDI to the next level. CEO Mike Creedon has done a great job in getting SDI to where it is now but it is urgent to expand SDI's structures and install leaders who are able to think bigger. It doesn't need a one-man army, it needs a competent M&A team to take care of the M&A business so that the CEO and CFO can take care of the core business and strategic direction. It's about taking the existing business global and opening up new regions. It is about increasing cash generation and optimising structures to increase FCF release to turn the M&A wheel faster. As long as Mike tries to manage everything on his own, I see considerable risk. It is about taking SDI to the next level and I have lost faith that Mike Creedon will be the right man to do it. I respect Mike Creedon for what he has done and the value he has created for SDI shareholders but I see SDI facing huge structural challenges in the face of the RF environment which has changed massively and which are not yet included in the share price Let's wait until the share price is in the 100p range. |
Posted at 13/4/2023 10:14 by worldwidet I do not see any relevant risk for SDI in the fact that Mike will eventually retire. Mike is a very smart guy and I trust him to find a worthy successor. It could even be a great opportunity for SDI if Mike were to retire as CEO in the next 5 years and become Chairman of SDI, leaving the operational business to a CEO who is willing to think bigger.Mike has done great things at SDI and what I write should in no way diminish his achievements! However, SDI faces very significant structural challenges that roll ups and serial acquirers inevitably bring when they get bigger. SDI's organic growth has slowed massively in recent years. The extreme growth has mainly been supported by the special factors of Covid in combination with some good smaller acquisitions. Now, however, SDI is struggling to increase FCF strongly enough because organic growth is cooling off too much and there is too little liquidity available to turn the M&A hamster wheel faster. With what liquidity should SDI make 6-8 acquisitions per year to keep M&A growth at 205 and how can SDI integrate all the companies with the existing structures into the group to get organic growth back into the high single digits? When interest rates are close to zero, as they have been in recent years, and companies can obtain credit very cheaply and consumers are in a spending mood due to cheap money, the economy and companies can grow well. But the general conditions have changed by 180 degrees. Companies pay interest rates of 5-6% and consumers sometimes no longer get loans at all or only at very high conditions. The highly liquid bond markets have priced in a deep recession for the next 8-16 months, which I personally think is very likely. SDI's organic growth has already been severely curtailed over the last 3 years in a well performing economy and SDI is struggling to generate free cash flow. I think in a recession, when companies massively cut back on capital expenditure and consumption collapses, SDI will experience even bigger problems in FCF generation, which will have a very negative impact on M&A opportunities and thus M&A growth. SDI is dependent on an ever faster turning M&A hamster wheel and I do not currently see the structures and the financial framework to turn this M&A hamster wheel faster in order to be able to maintain the growth target of ~28% p.a. announced by management, which is currently expected by investors at prices around 160-180p. It remains exciting. But I see a strong recession coming at a price of 160-180p and that is not priced in. My personal opinion. |
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