Sdi Share Discussion Threads

[rivaldo] 11/2/2019 14:14

For the record, here's Finncap's summary from last week's note, in which they raise their target price to 48p and their orecasts to 2.5p EPS to 30/4/19 and 2.9p EPS for the coming year:

"9% accretive acquisition – complements ATC

SDI is acquiring Thermal Exchange Ltd, a manufacturer and supplier of cooling
and temperature control equipment for the industrial, medical and scientific
markets. The company is paying c.£1.1m to acquire the company, which
represents historic FY 2018 EV/Sales and EV/EBIT multiples of 0.8x and 5.3x,
respectively. The acquisition is being funded from cash with net cash at year-end
expected to be c.£0.7m.

This transaction represents another example of the company building out a suite of complementary businesses that should offer cross-selling opportunities to drive organic growth. We expect the acquisition to be 2% accretive to adjusted EPS in FY 2019 (neutral to statutory EPS, given c.£60k of acquisition costs) and c.9% in FY 2020.

We raise our target price by 9% to 48p to reflect the earnings accretion. Based on our 2020 forecasts, this would place SDI on EV/Sales of 2.2x, EV/EBITDA of 9.6x and adjusted P/E of 16.4x with a FCF yield of 4.6% in FY 2019 rising to 5.8% in FY 2020.

 The acquisition. Thermal Exchange designs, manufactures and sells a range of
process cooling and temperature control systems for industrial, medical and scientific applications. Based in the UK (Leicester), Thermal Exchange reported FY 2018 revenues of £1.4m, 14% of which are exported, with pre-tax profits of £0.21m.

 Consideration. SDI is paying c.£1.1m to acquire Thermal Exchange, free of any
cash and/or debt, which implies paying 0.8x and 5.3x historic FY 2018 sales and
EBIT, respectively. The acquisition is funded from cash, with year-end net cash of
c.£0.7m expected, having drawn c.£1.4m from its £5m banking facility. The net asset
adjustment, payable upon completion accounts, is expected to be less than £300k
and is included in the acquisition price. It will be funded out of cash resources.

 Strategic rationale. Thermal Exchange complements the range of chillers and heat
exchangers that Advanced Thermal Control already sell, more than doubling the size
of its thermal chiller revenue base. Given the geographic proximity of the two
companies and the skills and resources in ATC, there is the potential for cost
synergies (logistics) as well as cross-selling opportunities, respectively.

 Forecasts and valuation. We forecast Thermal Exchange to contribute £350k and
£50k to FY 2019 revenue and EBIT forecasts, respectively, rising to £1.5m and
£0.25m in FY 2020. The acquisition is 2% and 9% accretive to adjusted fully diluted
EPS in FY 2019 and FY 2020. We raise our target price by 9% to 48p (from 44p), at
which level the stock would trade on FY 2020 EV/Sales of 2.2x, EV/EBITDA of 9.6x
and adjusted P/E of 16.4x with a FCF yield of 5.8% in FY 2020."

[buywell3] 08/2/2019 23:53

.............. CWD and the future of the USA ...............

America has a massive problem on its hands as CWD( a TSE prion disease as was BSE in Cattle in the UK ) in White Tailed deer which is the most common deer species in America ( none in Alaska or Hawaii ) continues to spread at ever faster rates across 26 USA states and into Canada ( 3 provinces ).


The CDC I am afraid is paying lip service to the problem , and each state is doing its own thing

Some states are even promoting the eating of roadkill ... which goes against CDC guidance . It's a complete mess.

The Government of the USA soon will have to step in and act.

I am sure Mr Trump knows the score regarding the potential harm that CWD can do to the economy of the USA, as well as the potential human harm it might already be doing ... ie some humans may have acquired a form of CWD and be un-diagnosed.

Somehow I can't see any government initiative coming from the Republicans with Mr Trump going for a second term.

The Democrats are a bunch of dummies so don't hold your breath there either, Public opinion and action is needed or a CWD Human outbreak is only a matter of time.

The UK decided to burn all herds of BSE affected cattle ... the equivalent TSE disease in Cattle V CWD the TSE in Deer.

I guess deer farms that have deer which have CWD positive tested deer will soon be the first actions to receive similar treatment ie the burning of the entire herd.

That will be a radical step however for the CDC

To date they are sitting on the fence and say this

To be as safe as possible and decrease their potential risk of exposure to CWD, hunters should take the following steps when hunting in areas with CWD:

Do not shoot, handle or eat meat from deer and elk that look sick or are acting strangely or are found dead (road-kill).

When field-dressing a deer:

Wear latex or rubber gloves when dressing the animal or handling the meat.
Minimize how much you handle the organs of the animal, particularly the brain or spinal cord tissues.

Do not use household knives or other kitchen utensils for field dressing.

Check state wildlife and public health guidance to see whether testing of animals is recommended or required.

Recommendations vary by state, but information about testing is available from many state wildlife agencies.

Strongly consider having the deer or elk tested for CWD before you eat the meat.

If you have your deer or elk commercially processed, consider asking that your animal be processed individually to avoid mixing meat from multiple animals.

If your animal tests positive for CWD, do not eat meat from that animal.

The U.S. Department of Agriculture’s Animal and Plant Health Inspection Service regulates commercially farmed deer and elk.

The agency operates a national CWD herd certification programExternal.

As part of the voluntary program, states and individual herd owners agree to meet requirements meant to decrease the risk of CWD in their herds.

Privately owned herds that do not participate in the herd certification program may be at increased risk for CWD.




It's called '' Passing the Buck ''

[buywell3] 07/2/2019 22:17

Cont'd


11. The USA Drinks Industry which re alcoholic drinks can be divided into

a) Non-Distilled Beverages
i) Beer
ii) Takju
iii) Sour
iv) Shchi
v) Boza
vi) Shaosinghjiu,
vii) Chongju,
viii)Sake
ix) Kvas

And b) Distilled Beverages ... spirits

Fortunately, prions are proteins with a molecular weight of over 35,000 Daltons. This corresponds to a molecular diameter of approximately 3 to 4 nm. Therefore, they can be filtered out of purified water by suitable filtration - nano-filtration, ultrafiltration or reverse osmosis - or removed by distillation. Passage through oxidising 185nm UV and mixed ion exchange resins are also likely to contribute to prion removal.

Thus we only have the a) list to be concerned with because many use grains of various cereals


Raw material (cereal grains) Beverage

a) Wheat based beverage Takju, Sourich Shchi,Boza
b) Rice based beverage Shaosinghjiu, Chongju, Sake, Kvas, Takju
c) Maize based beverage Chicha, Sora, Sekete, Boza
d) Millet based beverage Thumba, Jaanr, Burukutu.
e) Sorghum based beverage Gowe, Merissa.
f) Barley based beverage Beer, kvas, Sourich Schi


The USA uses adjuncts in the beer brewing industry “( … any carbohydrate source other than malted barley which contributes sugar to the wort” such as corn, rice, rye, oats, barley, wheat and sugar. Adjuncts are used mainly because they are readily available and provide fermentable carbohydrates at low cost as compared to sugars available from malted barley.

The most common adjunct materials used are corn (46% of total adjunct), rice (31%), barley (1%), and sugars and syrups (22%) and in the United States, non–malt adjuncts have been estimated to be 38% of total brewing materials employed (Marchbanks, 1987). The addition of adjunct in the wort results in beers with greater physical stability, better chill-proof qualities and higher brilliancy. Adjuncts like rice and corn contribute little or no soluble protein to the wort while wheat and barley adjuncts add more soluble protein and thus enhance protein level of wort.

The proportion of adjuncts used by brewers varies from 10 to 30% in Europe, to 40 to 50% in United States.


Water is primarily used for steeping/soaking malted barley and for diluting wort to desired sugar level prior to fermentation. Breweries have traditionally been established near rivers but brewers generally use river water only for running and cooling machinery. For brewing, ground water from well or spring is used in most of the breweries. The ground water varies in pH and concentration of some important ion from one geographical location to the other and thus it immensely affects both styles and tastes of beer (Scholefield, 1956).

Malting

In malting, barley is steeped to increase its water content from 12% to about 45%. It takes about 48 hours and consists of 2 or 3 rounds when grain is immersed in water with air rests in between. Moist grain is allowed to germinate for 3-4 days. During germination gibberellins diffuse from embryo into the endosperm and this stimulates aleurone cells to produce hydrolytic enzymes viz., amylases, proteases, cellulases and hemicellulases enzymes.

The highest temp reached in the process is 100 degrees centigrade

Prions can withstand temps of 460 degrees centigrade

Conclusions

1. The potential for prion contamination of beer brewed in the USA , from CWD prions being shed by CWD infected White Tailed or Mule Deer in particular (most common species affected) exist via either:

a) contaminated water supply containing CWD prions or
b) contaminated cereals containing/coated with CWD prions

2. The brewing process and methods used in beer making ie a non-distilled beverage, does not remove prions because temperatures do not reach 460 degrees, and rarely if at any time exceed 100 degrees centigrade.

3. The USA Beer Industry alone is worth $111.4 billion.





Fancy an American pint ?


I have not mentioned Cattle or Sheep or Goats in the last few posts ... as many know wild goats roam aplenty ... as do some wild cattle and sheep





Re the last link

How many dead deer are there in the various USA waterways, rivers and streams that are there because the animal had CWD when it wandered in and drowned ?

How long will those CWD prion contaminated deer carcasses go on shedding pieces of infected prion protein into the water column/table/supply till the carcass disappears ? months or years ?

[buywell3] 05/2/2019 01:29

I get the feeling that the TE sales side has done a decent job for the company re 3rd party agreements eg EF Cooling.and LAUDA KG

I would imagine that Applied Thermal Control will cherry pick between their products and TE products to decide which are the best to go forward with and develop plus look at EF Cooling and Lauda KG to see what if any of their products were in direct competition to Applied Thermal Controls ... and then make the necessary appropriate trading/sales decisions.

TE have geared up to provide service technicians for both EF Cooling and LAUDA KG

Service & Repair
EF & Ultracool(LAUDA) Chillers Connected to Hewlett Packard Printing Presses


Your HP printing press represents a large investment, which is critical to your business and its profitability. Likewise, the process chiller that provides your press with cooling water is equally critical.

Consequently, you need to be sure that you can rely on quick and efficient service support. The best people to provide that invaluable support are the experts trained by both Hewlett Packard’s approved chiller manufacturers, EF Cooling & Ultracool.

Thermal Exchange provide nationwide support using a network of skilled service technicians.

Thermal Exchange

Located in Leicester the design team are experts in the fields of process control, heat transfer and refrigeration and are able to provide customers with cost effective solutions to a wide range of cooling and temperature control problems. Typical examples include the temperature control of equipment in car production plants, laboratories and hospitals, pharmaceutical sites and petrochemical industries.

In 2006 TE entered into a distribution agreement with LAUDA KG, a world-renowned German manufacturer of thermostat and heating-cooling systems. This strengthened the product portfolio and LAUDA's acquisition of Ultracool in 2011 has broadened the product range further.

A recent distributor agreement with the US Company ACE Glass Inc has lead to the addition of their laboratory glassware, allowing Thermal Exchange to forecast continued growth, offering solutions into a wide range of industries.

In june 2018 TE partnered with Swiss based EF Cooling AG





Seems like quite a bit of HP work going on

[pireric] 04/2/2019 19:56

Neat acq, can't complain. Stock still cheap :0)

[buywell3] 04/2/2019 18:17

One would imagine that SDI will terminate the Swiss based EF Cooling partnership that
TE entered into on june 2018 if it impacts adversely in any way with Applied Thermal Control products.

Otherwise who knows .. perhaps EF Cooling are next

Recirculating Chillers Market expected to reach US $1.75 Bn by 2023 at a CAGR of over 4%

The general Chillers market is expected to reach US $11.33 Billion by 2022, at a CAGR of 4.4% from 2017 to 2022.

Not too shabby

Looks like USA sales are due a lift

UL-Approved Chillers from ATC

17 December 2018

Compliance with UL standards is an optional and globally recognised accreditation and a standard ATC has chosen to conform to, showing our continued commitment to quality and supporting our international OEM customers.

UL stands for Underwriters Laboratories – a US-based safety and certification company, who adopt standards produced by international standards writers such as the International Electrotechnical Commission.

Underwriters Laboratories are an independent Nationally Recognised Testing Laboratory (NRTL) as certified by the US Occupational Safety and Health Administration (OSHA). Their perceived dominance in the group of 19 NRTLs (at time of writing) stems from the two parts of their business; one focused on standards writing (where the prefix ‘UL’ is added prior to the standard number), the other part focused on testing and certification. All NRTLs are authorised by OSHA to assess products against UL standards, and to declare compliance with that standard. An OEM can thereafter ‘mark’ their product with the symbol of the certifying NRTL. ATC have a longstanding relationship with Intertek, that have over 130 years’ experience in the field, and ensures ATC meet the required quality, safety and social accountability standards. As a recognised NRTL, Intertek can declare ATC’s products compliant to UL standards. When Intertek do this, they issue the authorisation to ‘ETL Mark’.

ATC’s products span across four ‘Constructional Data Reports’ (CDRs, also known as listing reports). Since the products are not ‘UL-listedR17; they won’t be found on Underwriters Laboratories listing directory, but they can be found on Intertek’s ETL-listing directory. The safety critical components within ATC’s products carry a mark from at least one NRTL. Chillers are listed in the ETL-listed directory under the UL61010 and Canadian CSA22.2#61010 standards (general lab equipment).

UL compliance demonstrates the highest standard of product engineering for safety. Products are inspected with consideration of fire, voltage and energy risk and how they interact with the user during typical and foreseeable misuse scenarios. Electrical safety standards are applied, to ensure the product doesn’t become unsafe in the event of a failure.

Intertek conduct quarterly onsite inspections of the components used in approved chillers to ensure these continue to be UL compliant. During the visit, the current approval status of the components are reviewed, ATC’s testing procedure checked, and more generally, the status of the Quality Management System. This includes pressure testing and a review of the testing equipment used to measure dielectric strength and quality of earth bond.

The need for UL compliance has been customer driven. Our customers often request UL compliance as a means of reducing the time to UL approve their own equipment (where the chiller is a component part) and often to satisfy risk assessments for facilities where fire safety is paramount. ATC are committed to development and working closely with OEM’s to service their needs. Seeking UL accreditation for our chillers is a demonstration of our commitment to quality and safety, supporting our global customers.

UL shows a mark of quality and safety, the latest chiller, Mini will be sent for approval at the end of 2018.






ATC Announce Partnership with West Coast Mbartech

Posted: 22 November 2018

Mbar operates within the laboratory and university markets, with OEM vacuum equipment builders, and with all end users of vacuum equipment.

Mbartech functions as sales representatives under contract, selling vacuum pumps, gauges, RGA’s, chambers, fittings, process tools, leak detection equipment, and now chillers. Based in California, they predominately service customers who are scientists or engineers.

Founded in 2001 by current President John Freeman who has 40 years’ experience in the field of vacuum technology as a premier professional manufacturer's representative company on the West Coast.

John graduated with a BA from Northeastern University (Boston) in 1971, and completed further postgraduate training in physics and math. John gained experience in the field working as a thin-film optical coating technician in his early career, then as Vice President of Sales in the United States for companies like Balzers, Pfeiffer, and VAT. He often hosts short courses at the National Labs on topics like cryogenic pumping, vacuum gauging, and Residual Gas Analysis.

ATC have been in touch with Mbartech since 2008, building our relationship and west coast coverage, but the timing wasn’t right for Mbar who had a competing line at the time. Mbartech came recommended to Ryan Watson, ATC’s Sales and Marketing Manager, by their long-standing sales representative for southern California.

Mbartech has vast application knowledge and experience as well as a focus on helping define the best solution for the customer. ATC is a good fit for this ethos, by producing a quality product, good service at competitive prices.

ATC Managing Director Robert Poniatowski included a visit to west coast Mbartech in a recent trip the US. This included visiting customers, a trip to Berkeley Labs and a training session on ATC chillers.

We are thrilled at the prospect of working in conjunction with John and Mbartech providing chiller solutions to customers on the west coast.







USA East coast partner soon covering the Boston Area Bio-Hub ?

[pugugly] 04/2/2019 15:33

Yes but how many of those clients were buying 3rd party products for which they were the distributors eg.
However agreed an imprssive list and the the Thermal Controls web-site is NO Micky Mouse presentation -
Check out the product lists

[buywell3] 04/2/2019 13:56

SDI appear to be taking over Leicestershire , Applied Thermal Control , Fistreem and now Thermal Exchange ... all about 12.5 miles from each other and all with complimentary skill sets and production capabilities .

With Applied Thermal Control as the biggest and hence lead role in this ménage à trois, this mini group within a group ... will very shortly be set IMO to tackle together some decent sized orders that the individual entities themselves would have never been able to handle. Economies of scale come into play in what would imagine is going to be a happy, busy little combine.

Re the new acquisition ... just check out this list of Clients



Impressive or what

[rivaldo] 04/2/2019 10:13

Good to see another acquisition at a bargain price. It sounds like there are excellent synergies too.

Finncap's EPS forecast for the year starting this May is now 2.9p. So the P/E will soon be down to 12.9 - assuming SDI don't force Finncap to raise their forecasts once more.

[jaf111] 04/2/2019 07:52

what was FinnCap's old target price?

[hastings] 04/2/2019 07:32

FinnCap lifts its target price to 48p and raises adj pre-tax profit for next year to £3.2m. The story continues to build here, with further acquisitions and potential upgrades ahead.

[ayl30] 04/2/2019 07:12

Agree, all on strategy

[hastings] 04/2/2019 07:05

Another welcome acquisition and first glance looks an excellent strategic fit.

[jaf111] 29/1/2019 11:22

yes concur with that...

[hastings] 29/1/2019 11:20

Personally don't see a bid on the horizon and would prefer to see this progress just as it has been. As others have said, it's a great model and if the next acquisition/s replicate the likes of Sentek, then the share price should look after itself and of course investors.

[jaf111] 29/1/2019 10:24

So since the start of the year Octopus has reduced its stake from 8.15% to 4.15%.....
Share price on the rise which is certainly encouraging bid or no bid....

[pugugly] 29/1/2019 10:23

Octopus still selling down - Now down to 4.15% 3,719,640 shares - Still a lot for PI's to absorb - Looks as though trying to sell out completely - If so could easily drive it back to sub 33p - Which previously appeared to be their base level for sales and might trigger some nervous PI sales (imo) as currently seems to be priced for perfection. -

[steve3sandal] 29/1/2019 07:28

Buywell3, thank you for your detective work. We should know soon. I’ll admit to some creating some of the recent volume, but not so much as you’d notice ;0)
Good luck all.

[buywell3] 29/1/2019 01:19

The FT has this


Holder Shares % Held
Herald Investment Management Ltd.
AS OF 31 DEC 2017
7.40m 8.26%

Octopus Investments Ltd.
AS OF 18 JAN 2019
5.78m 6.45%

Universal-Investment-Gesellschaft mbH (Invt Mgmt)
AS OF 20 APR 2018
4.66m 5.20%

Hargreave Hale Ltd.
AS OF 18 SEP 2017
4.08m 4.55%

Miton Asset Management Ltd.
AS OF 14 DEC 2018
3.39m 3.78%

Harwood Capital LLP
AS OF 11 MAY 2017
1.40m 1.56%

Joh. Berenberg, Gossler & Co. KG (Investment Management)
AS OF 30 NOV 2017
273.59k 0.31%

Webb Capital Asset Management Ltd.
AS OF 28 FEB 2017
121.84k 0.14%


No mention of BGF at all ...... so as far as I am concerned they have sold out

It includes recent sales by miton ie up to date and Octopus but

Has not updated Canaccord Genuity to replace Hargreave Hale Ltd.(who they acquired)


BUT we have Universal-Investment-Gesellschaft mbH (Invt Mgmt)
AS OF 20 APR 2018
4.66m 5.20%


The above outfit is now owned by Montagu Private Equity (formerly HSBC Private Equity)
Montagu Private Equity acquires Universal-Investment from Berenberg and Bankhaus Lampe


Notice also the name Berenberg also mentioned in the last annual report
Berenberg Wealth and Asset Management 4,658,873 / 5.20%

So IMO that becomes
Universal-Investment-Gesellschaft mbH (Invt Mgmt)
AS OF 20 APR 2018
4.66m 5.20%

Which should now be called
Montagu Private Equity
As they have acquired Universal-Investment-Gesellschaft mbH (Invt Mgmt)


Montagu Private Equity has been investing in European businesses for over 50 years.
With a large pool of available funds, we lead buyouts of businesses with values ranging from €100 million to €1 billion or more. We work to create value in partnership with the incumbent management team and to help the business achieve its full potential.

If you are looking to buy your business,

have an interesting business to sell,

or just want to find out more, click here.



So what has happened to the 10% plus that BGF owned ?

We need an RNS please to lay out who owns what percentages of the company ASAP and explain the reason for recent high sales volumes.