Sdi Share Discussion Threads

[fuji99] 14/9/2023 11:18

WorldwideT: "Not even the CEO trusts his managers with more responsibility. Instead of using his own managers, he relies on external managers provided by intermediaries." - If management is just playing the role of "passengers" in the company the future of SDI will be cloudy and uncertain. They could also just sell it at any price giving them a profit and move on elsewhere to repeat the same process again. If a manager doesn't have any roots in a company he is just an opportunist looking at maximizing his own profit as quickly as possible. There is no long term for such "managers".

[worldwidet] 13/9/2023 09:55

As long as the executives don't feel like buying massive amounts of SDI shares, I see no reason to do so.

The biggest problem I see with SDI is that the executives are not rooted in the company for the long term through shareholdings.

Executives who own large stakes in shares themselves think long-term like shareholders.

At SDI, there are no founders or executives who are rooted in SDI.

SDI also does not have an intelligent long-term strategy to develop leaders internally. SDI always has to rely on external managers.

I think under Mike Creedon it is difficult to develop your full potential as a leader.

Why can't SDI develop its own top leaders?

Was there no high quality CFO at subsidiary level qualified to move to HQ in the finance department to become CFO later?

Is there no executive at subsidiary level qualified to become COO?

I think this shows that the existing business is not as high quality as it is assumed to be. Not even the CEO trusts his managers with more responsibility. Instead of using his own managers, he relies on external managers provided by intermediaries.

I think SDI is nowhere near the quality and sophistication that many assume.

[arregius] 13/9/2023 08:01

You buy when others are fearful

[worldwidet] 07/9/2023 18:31

The 80p area could offer an attractive risk/return profile from a chart and valuation perspective. I would possibly consider an entry in the area around 80p.

[worldwidet] 05/9/2023 14:44

102p and the executives continue to have no desire to buy.

But by not buying at 102p ... are telling us all we really need to know!

[isa1m] 25/8/2023 08:29

I agree with Shanklin that this is positive. Either because he can help fix organic profit growth, or (possibly) because the board want another exec on board before the CEO is allowed to leave.
The last few board hires all show that the board's priority is not M&A, but rather to strengthen operations and marketing. Im not sure they were hired by the CEO, who has always been proud of his ops management.

[worldwidet] 24/8/2023 13:20

Those were my thoughts. In my opinion, SDI needed exactly the opposite. A new leader who had been in charge of JDG HLMA DPLM etc. for years and now has the motivation and vision to create something equal or even better with SDI. A visionary who has experience in a larger, more mature serial acquirer and has helped to build it up. Someone who has the potential to think big and has a global network of contacts. And most importantly, he must be able to identify with the company from the heart and be willing to take a large share position to be on board with the shareholders in the long term.

The new COO looks like the exact opposite to me.

SDI lacks a leader like David Elie Cicurel who owns 10% of the company and is therefore willing to make very different decisions and who has implemented shareholder-oriented genetics in the company by demonstrating that there is value in buying shares as an executive.

I don't see SDI with the current management having the potential to take SDI to the level of Halma or JDG later on.

What should the new COO do? Has he brought two bags of £10m cash to spin the M&A wheel?

SDI is at the end of its financial tether. What are they going to use to fund M&A?

The FCF is collapsing just like the organic growth.

The new COO is the standard type found through a job recruiter. One of these types who registers with various intermediaries and then changes every 1-3 years.

The whole thing is not very continuous.

But you don't find really good managers or successors through job agencies.

You promote the really good managers yourself in the company or get them from other very good companies through your own network.

But Mike does what he always does and has always done in M&A. He uses consultants and intermediaries.

Mike lacks his own network.

Mike is simply not the type who has made a name for himself in the serial acquirer network and has built up a network.

He cannot present SDI in an attractive way.

I know I am harsh and have a lot of criticism but that is how I see SDI CURRENTLY.


SP 80-100p I'm waiting ...

[trident5] 24/8/2023 12:41

To be fair, he doesn't look like a man who likes to stay in the same job very long

[rivaldo] 24/8/2023 12:17

For the record Finncap retain their 200p target price today:

"COO appointment

As intimated at the FY 2023 results in early August, the company has announced the forthcoming appointment of Stephen Brown as Chief Operating Officer (COO), who will join the Group on 28 September. He brings a skillset and experience to the company that should provide the company with the additional management bandwidth to enable it to continue to grow through its buy and build strategy. Stephen has an engineering background, having held a number of senior positions with global product and technology focused businesses. Recent roles include: Group COO (non board) at AB Dynamics and CEO & Operating Partner at BP Launchpad, part of BP. Prior to this, he held multiple leadership roles, including (i) Global Vice President at Romax Technology, (ii) Research and Development Director (Technology and Production business unit) at Vestas Wind Systems A/S, (iii) Technical Director at the Industrial Power Group, part of Rolls Royce Holdings plc and prior to this other executive level roles in early-stage growth companies.

No change to forecasts and we reiterate our 200p target price, at which level the stock would trade on FY 2024E EV/EBIT and P/E multiples of 19.5x and 27.9x respectively, falling to 17.5x and 24.7x in FY 2025E; supported in our view by 14% adjusted EPS growth in FY 2025E, a FCF yield of 4.5% (FY 2025E) and the prospect of accretive acquisitions not yet included in the forecasts."

[shanklin] 24/8/2023 08:03

Objectively, and I currently have no position here, I find it very difficult to view this appointment as anything other than a +ve for SDI.

[worldwidet] 24/8/2023 07:57

I would have found it expedient to replace the CEO. Mike did his job at SDI and paved the way for retirement when he sold almost all his shares.

A new CEO capable of taking SDI to a new level would have been better in my view.

I have my doubts whether Mike Creedon is capable of taking SDI to the next level.

Mike is the type who likes to just keep doing what he is doing but that will not be enough at sdi.

The next 10 years will be much harder for SDI than the last 10, but let's just wait and see what happens.

Currently I see no reason to buy here. Neither do the executives, for that matter.

Large institutional investors have sold under large volumes. Currently, the stupid small money is buying the share price shakily upwards under low volume.

I expect much lower share price in SDI in the coming recession and a market-wide sell-off when large institutional investors have to adjust their risk budgets into 5% safe bond yields.

[trident5] 24/8/2023 07:50

Jeez, haven't you been banging on about the need to strengthen the senior team? And aren't some of those directorships within the same group (AB Dynamics)?

[worldwidet] 24/8/2023 07:46

Recent roles include Stephen's position as Group COO (non board) at AIM quoted AB Dynamics plc and CEO & Operating Partner at BP Launchpad, part of BP plc.

Current directorships:

AltEnergis Plc
Cross-Flow Energy Company Limited
Technology (Bath) Limited


Historic directorships and partnerships in previous 5 years:

ABD Solutions Ltd
Ansible Motion Limited
Anthony Best Dynamics Limited
Bath Sales & Lettings Ltd
Brown Investment (Bath) LLP
Elmtronics Group Limited
Hubsta Limited
MER Fleet Services Limited
Stryde Limited


The new COO seems to be very busy. Seems to be the kind of personality who always has to dance at 5 weddings at the same time in order to live up to his exalted ego.

To the trackrecord:

Stephen Brown was appointed as a director of Nordic Windpower Limited ("NWL") on 29 September 2011 and resigned as a director on 15 May 2012, following which in October 2012 Nordic Windpower Holdings Inc (NWL's parent company) filed for Chapter 7 bankruptcy and on 26 March 2013 NWL was dissolved via compulsory strike-off.


But SDI could also appoint a chimpanzee as COO and the permabulls like Hastings and revaldo would sing praises.

We will see what the new COO brings, apart from additional personnel costs.

The coming recession and longterm high interest rates will bring all the weaknesses to light.

I expect share price 90-100p 2023/24

[pugugly] 24/8/2023 07:45

We should have invested in his previous company!!!
"
Ab Dynamics PLC, ABDP:LSE summary - FT.com - Financial Times
Web17 Aug 2023 · Price (GBX) 1,755.00 Today's Change -20.00 / -1.13% Shares traded 9.60k 1 Year change +43.27% Beta 0.8861 Data delayed at least 20 minutes, as of Aug 07 2023 …

[rivaldo] 24/8/2023 07:35

Agreed - the new COO has a good track record. ABDP has been an unambiguous success post-IPO, and with senior leadership roles at BP, Vestas and Rolls Royce in addition he has a pretty impressive CV:

[hastings] 24/8/2023 07:04

Looks like a good and welcome addition to the board.

[worldwidet] 21/8/2023 20:46

I agree with Bruce Packard's worth reading analysis and also believe that we will see SDI below 100p in the next months.

[mortal1ty] 17/8/2023 09:43

I agree. Classic micro-cap roll-up story going wrong. Debt going up. Organic growth now negative. Free cash flow generation worsening. De-rating means they can't fund acquisitions with equity anymore. Deferred consideration will eat into cash flow some more. Struggle to integrate all the historical acquisitions.

Always ends badly. Victoria. Kin and Carta etc.

[trident5] 14/8/2023 11:35

He's taking up way too much space in your head, mate.

[worldwidet] 14/8/2023 11:30

You have to compare the framework conditions.

Mike has steered SDI through a period of historically low interest rates from 2010 to 2022. SdI had high leverage and was able to grow FCF strongly in a period of economic strength with high demand. In addition, SDI was still a microcap where it could achieve a huge positive impact on the balance sheet with 1-2 acquisitions. In addition, SDI was one of the big Covid winners with huge one-off orders.

Now the environment has turned 180 degrees. Interest rates have risen as massively as they did almost 25 years ago. Debt is extremely expensive and the economy is massively weakened and facing a deep recession. FCF and organic business seem to be less stable and valuable as assumed (see monmouthdisaster). Acquisitions have become more and more expensive and margins are collapsing as high margins from Covid one-offs disappear.

In addition, SDI has taken on a lot of debt with expensive takeovers, which has tripled the interest burden.

SDI is no longer a microcap and needs 2-4 acquisitions each year to continue to grow in line with expectations.
But with what money are these acquisitions to be realised?

The existing business will show massive weaknesses in an economic downturn. This has already started.

CEO selling his shares at 165p in the face of recession.

This is not the time to play the investment hero.

[nchanning] 14/8/2023 11:08

Mike has never been a polished corporate presenter , but I'll take the amazing track record of creating shareholder value over a corporate droid who's good at PowerPoint presentations . If it was January 2020 with SDI about to report £24 million revenues for the year and 2.6p EPS and you said in FY 24 SDI will be forecasting £70 million in revenues and over 7p in EPS you would think the narrative would be what a wonderful job Mike has continued to do .

[hastings] 14/8/2023 10:04

"Fan Boy" long time since I've been associated with youthfulness, I'll take that as a compliment lol.

[worldwidet] 14/8/2023 09:21

Overwhelming in many places. A management that has absolutely no interest in owning shares. The fish starts to stink at the head. A CEO who wants to do everything on his own and who has no interest in SDI shares. The CEO always gives an absolutely grated and nervous impression. He puts his pen in his mouth and can't sit still in his chair.
At a company presentation, you should be in control.
But it fits the image of the CEO. He is a grated of himself. This kind of person cannot hand over responsibility because he always has to keep himself busy.

The coming recession will expose the many problems at SDI without mercy.
And the weaknesses of the management will only really become visible in the recession.

70-90p could be prices that open the eyes of the Pärmabulls and Ceddon worshippers.

Many posts here and on Twitter cannot be taken seriously. They come from fanboys of the CEO like Hastings who likes to have coffee with the management.

I see things more soberly. There are still a lot of problems that will come to the surface. The good thing about a deeper recession is the clean-up. All the problems come to the surface.