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Share Name Share Symbol Market Type Share ISIN Share Description
Sdi Group Plc LSE:SDI London Ordinary Share GB00B3FBWW43 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -7.00 -3.63% 186.00 184.00 188.00 192.00 183.50 190.50 213,121 16:18:34
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Electronic & Electrical Equipment 35.1 5.6 4.8 38.7 186

SDI Group PLC Final Results

20/07/2021 7:00am

UK Regulatory (RNS & others)

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From Jul 2021 to Jan 2022

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RNS Number : 7429F


20 July 2021

SDI Group plc

("SDI", the "Company", or the "Group")

Final Results

SDI Group plc, the AIM quoted Group focused on the design and manufacture of scientific and technology products for use in digital imaging and sensing and control applications, is pleased to announce its final audited results for the year ended 30 April 2021.

Financial Highlights

   --       Revenue increased by 43.2% to GBP35.1m (2020: GBP24.5m) including 19% organic growth 
   --       Adjusted operating profit* increased by 67.3% to GBP7.7m (2020: GBP4.6m) 

o Reported operating profit increased 69% to GBP5.9m (2020: GBP3.5m)

   --       Adjusted profit before tax* increased by 70.5% to GBP7.4m (2020: GBP4.3m) 

o Reported profit before tax increased 73% to GBP5.6m (2020: GBP3.3m)

   --       Adjusted Diluted EPS* increased by 74.0% to 5.97p (2020: 3.43p) 

o Reported diluted EPS increased 79% to 4.58p (2020: 2.56p)

-- Cash generated from operations increased by 125.0% to GBP11.7m (2020: GBP5.2m), benefitting from one-off customer downpayments

   --       Net cash (cash less bank finance) was GBP0.8m (2020: net debt of GBP4.0m) 
   --       Earnout of GBP2.35m for Monmouth Scientific agreed and settled post year end 

Operational Highlights

   --       Two new acquisitions added to the Group - Monmouth Scientific and Uniform Engineering 

-- Companies across the Group adapted quickly to challenging market conditions of Covid and Brexit

Ken Ford, Chairman of SDI said:

"The past year has been extraordinary with possible permanent changes to the way we work. The resistance, adaptability, dedication and hard work of our team has led to further growth this past year. The outlook, thanks to our agile business model, is positive and we are planning for further organic growth, including from one-off COVID-19 related orders, and appropriate acquisitions during 2021-22. Trading in our 2021-22 financial year remains in line with market expectations and we look to the future with confidence."

* before reorganisation costs, share based payments, acquisition costs and amortisation of acquired intangible assets.


 SDI Group plc 
  Ken Ford, Chairman 
  Mike Creedon, Chief Executive Officer 
  Jon Abell, Chief Financial Officer                           01223 727144 
 finnCap Ltd 
  Ed Frisby/Kate Bannatyne/Milesh Hindocha 
  - Corporate Finance 
  Andrew Burdis/Sunila de Silva - ECM           020 7220 0500 
 JW Communications 
  Julia Wilson - Investor & Public Relations      07818 430 877 

About SDI

SDI designs and manufactures scientific and technology products for use in digital imaging and sensing and control applications including life sciences, healthcare, astronomy, manufacturing, precision optics and art conservation. SDI operates through its company divisions: Atik Cameras, Synoptics, Graticules Optics, Sentek, Astles Control Systems, Applied Thermal Control, MPB Industries, Chell Instruments, Monmouth Scientific and Uniform Engineering.

SDI continues to grow by developing its own technology advancements and by improving its global sales channels, as well as through pursuing strategic, complementary acquisitions.

Audited Report and Financial Statements

The results have been extracted from the audited financial statements of the Group for the year ended 30 April 2021. The results do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. Whilst the financial information included in this announcement has been computed in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 that applies to companies reporting under IFRS, this announcement does not itself contain sufficient information to comply with IFRS. The Group will publish full financial statements that comply with IFRS. The audited financial statements incorporate an unqualified audit report. The Auditor's report on these accounts did not draw attention to any matters by way of emphasis and did not contain statements under S498(2) or (3) Companies Act 2006.

Statutory accounts for the year ended 30 April 2020, which incorporated an unqualified auditor's report, have been filed with the Registrar of Companies. The Auditor's report on these accounts did not draw attention to any matters by way of emphasis and did not contain statements under S498(2) or (3) Companies Act 2006. The accounting policies applied for the financial year ending 30 April 2021 are consistent with those described in the Annual Report & Accounts for the year ended 30 April 2020.

The Group's Annual Report for the year ended 30 April 2021 will in due course be available to view on the Company's website: and be sent to shareholders, together with a notice of AGM which will also be available on the Company's website.

Chairman's Statement


In the financial year ended 30 April 2021, despite the global economy being affected by the COVID-19 pandemic, SDI achieved another record year of revenues and profits together with the completion of two acquisitions.

Whilst protecting the health and safety of all our staff remained a priority, the Group was able to take proactive, practical measures to maintain our manufacturing capabilities. This resulted in protecting our profitability and cashflow which arose due to an increase in orders from some life science sectors which the Group serves. SDI finished the year with profits above market expectations and strong trading cash flows, enabling the Group to continue to take advantage of new market opportunities and acquire two companies, one of which offers sought-after clean air technologies which has been required in greater quantities during this pandemic.

The strength of SDI's business model has allowed us to complete the acquisition of Monmouth Scientific (Monmouth) in December 2020 for GBP6.1m and Uniform Engineering (Uniform) for GBP0.5m in January 2021. Monmouth offers clean air systems and during the COVID-19 pandemic the company's biological safety cabinets have been in high demand. SDI acquired Uniform to secure Monmouth's supply chain for metal cabinet housings and Uniform also offers a potential supply of cabinets to other SDI Group divisions. Both companies have become part of our Sensors and Control segment of the SDI Group.

To part fund these new acquisitions, SDI issued 230,680 new Ordinary Shares in December 2020. SDI's record profits and cash generation in the period, alongside the Group's banking facilities, ensure the Group has a good level of funding available for acquiring new companies, as well as investing in our existing companies and technologies.

Full year Revenues of GBP35.1m have increased by 43.2% from 2020 and Adjusted Profit before Tax* at GBP7.4m is up 70.5% from the previous year. Reported Profit before Tax has increased by 73.3% to GBP5.6m. This performance has been achieved through an exceptional 19% organic sales growth, demonstrating continued commercial demand for the niche technologies SDI provides. The newly acquired Monmouth and Uniform have delivered an earnings enhancing contribution in line with the Board's expectations for this financial year.


The Group's successful buy and build strategy is unchanged as this is still creating shareholder value. We will continue to seek targeted acquisitions, funded by earnings and cashflows from our existing businesses where possible. The Group's policy is to acquire small/medium-sized companies with technologies in the digital imaging and sensing and control sectors. However, we are open to acquiring companies with broader scientific applications or associated supply chain businesses like Uniform Engineering if they provide significant benefits to the Group. To obtain immediate, continuing earnings enhancements, we seek to acquire businesses with high-quality, niche technologies that have sustainable profits and cashflows. The pandemic and current economic climate in the UK is providing greater opportunities for purchasing companies and we expect to acquire one or two new businesses for the Group in the coming financial year. To ensure we maintain the right level of operating capital and funding for acquisitions, without the need to take on additional debt, the Board has decided not to pay a dividend this financial year but will review again in 2022.

The need for SDI products, particularly in the life science and medical industries remains robust and there has been strong demand for technologies from several companies in our Group for use in the fight against the COVID-19 pandemic. The volatility in many global markets caused by the pandemic has impacted companies in our Group both positively and negatively this financial year, and we expect this to continue into 2022. However, underlying market drivers such as automation and in-line and off-line analysis for use in continuous processes, as well as the production of affordable vaccines and biologics globally means many of our technologies will continue to be in demand especially with original equipment manufacturers (OEMs) with which SDI companies have long standing trading relationships.

Delivering returns to our shareholders is a key objective of the SDI Group. In this financial year, due to the increase in manufacturing throughput and the price of raw materials, our costs have been increasing. However, our overall costs are not yet at pre-pandemic levels and has meant that our gross margins remain in line with forecast at 65.2%. We intend to continue reviewing operating costs and will where appropriate pass on unexpectedly high materials costs to our customers to maintain profitability.

Corporate Governance

It is the Board's responsibility to ensure that the Group has a corporate governance framework that is effective whilst dynamic, as a foundation for a sustainable growth strategy, and identifying, evaluating and managing risks and opportunities that will be the foundation for long term value creation.

In 2019 the Group adopted the 2018 QCA Corporate Governance Code after concluding that it was the one best suited to SDI's business, aims and ambitions. The Board believes that the Group complies with the Code, but is committed to continuously improving its governance over time. Further detail on Corporate Governance is available on the Group's website


SDI now employs over 300 staff across its companies, who have worked tirelessly throughout this financial year, delivering to and ahead of budget and quality targets, often in challenging working conditions. It is thanks to them that all our manufacturing facilities have been able to operate safely to keep our day-to-day production running, with many delivering components for systems that are vital to treat or detect COVID-19. The outstanding results achieved during the 2020-2021 financial year are due to their hard work and flexible approach to new working practices and the Board is grateful for their contribution. The increase in performance in a difficult year underlines the strength of SDI's operating model and is a testament to the dedication of our team.


During the last six years, turnover has grown from GBP8.4m to GBP35.1m and profit before tax from GBP0.5m to GBP5.6m. The policy of delegated responsibility to subsidiaries has allowed this growth to work well with strong central financial control. We have invested in our subsidiaries where required and look for strong organic growth as well as through acquisitions.

Our strong balance sheet, increased debt capacity but most importantly cash generation should allow for further acquisitions. We continue to be shown acquisitions; previous choices and the quality of the subsidiary management has given credibility to our model. We are a buyer of integrity with a strong sense of purpose and attitude.

The past year has been extraordinary with possible permanent changes to the way we work. The resistance, adaptability, dedication and hard work of our team has led to further growth this past year. The outlook, thanks to our agile business model, is positive and we are planning for further organic growth, including from one-off COVID-19 related orders, and appropriate acquisitions during 2021-22. Trading in our 2021-22 financial year remains in line with market expectations and we look to the future with confidence.

Ken Ford


19 July 2021

Chief Executive's Operating Report

The COVID-19 pandemic has had a significant impact on the global business community. Our Group is somewhat protected from that because we operate in a space where we can provide products and services as solutions to help combat the problem. This has resulted in SDI Group revenues for the financial year ended 30 April 2021 progressing from GBP24.5m to GBP35.1m, an increase of 43.2%. During this financial year, we acquired two new businesses, Monmouth Scientific and Uniform Engineering.

Revenues and profit

SDI's digital imaging segment delivered GBP15.8m revenue and a 32.7% adjusted operating profit margin during the 2020-2021 financial year. Revenues have been enhanced by organic growth from Atik and Synoptics both of which had an outstanding year.

Atik Cameras is now the largest business in the SDI Group and grew well above management's expectations for the year. Demand for products from Atik underwent a dip across all global markets during the first quarter of the financial year due to the global shutdown of many academic facilities. However, there was a significant increase in orders from an OEM manufacturer to supply cameras for real-time PCR DNA amplifiers used in COVID-19 testing. Atik has secured a significant follow-on camera order with this OEM which will run for the duration of the 2021-2022 financial year and is an endorsement of the company's design and production capability in life science imaging.

The sensors and control segment grew from GBP13.4m to GBP19.3m in revenue, an increase of 44.0% in this financial year. Adjusted operating margin remained steady at 22.6%. While many of the companies in the division were adversely affected by the pandemic during the first half of 2020, revenues have been enhanced by organic growth of MPB Industries and part year revenues from Monmouth Scientific and Uniform Engineering during the period. The COVID-19 pandemic generated a surge in demand for Monmouth's biological safety cabinets in COVID-19 testing facilities but in this current year we are seeing the product mix returning to a pre pandemic mix. We expect those companies in the segment that have been affected negatively by COVID-19 to experience a period of growth as the impact of COVID-19 decreases.

Basic earnings per share increased by 80.8% from 2.66p to 4.81p; fully diluted earnings per share before adjusting items also improved by 78.9% to 4.58p (2020: 2.56p).


The UK is a centre of excellence for product innovation and manufacturing with many world-leading businesses operating in life science and technology niches. As a buy and build group, finding those businesses with niche capabilities is key to our success. The SDI Group has a reputation as a supportive owner that invests to improve staff expertise and facilities, as well as trusts subsidiary management teams with their day-to-day operations. This approach has allowed companies in our group to upgrade capacity, efficiency and safety in their manufacturing facilities and their businesses to thrive.

On 2 December 2020, the Group acquired 100% of the share capital of Monmouth Scientific for a total consideration of GBP6.1m, including an earnout cash payment of GBP2.35m paid after the year end, funded from existing cash resources and our revolving credit facility with HSBC UK Bank. For the year ended 31 March 2020, Monmouth generated revenues of GBP6.2m, and profit before tax of GBP0.4m. Monmouth manufactures biological safety cabinets, fume cupboards, laminar flow cabinets and cleanrooms. Its biological safety cabinets sales have increased six-fold in 2020 and 80% of production is now dedicated to these product lines as they are in high demand globally for ensuring operator safety at COVID-19 testing sites.

On 29 January 2021, SDI acquired the business and net assets of Uniform Engineering, a component supplier to Monmouth Scientific and other companies with a requirement for metal fabrication, for a cash consideration of GBP0.5m. For the year ended 31 May 2020 Uniform generated GBP1m in revenue and profit before tax of GBP0.1m. The company, a manufacturer of bespoke metal enclosures and housings is being managed by Monmouth but is currently maintaining its separate premises in Highbridge, Somerset.

Our acquisition of Monmouth Scientific and Uniform Engineering this year has added two new manufacturing sites with clean air expertise. It has also ensured Monmouth, as well as other companies in the Group access to a key supplier of fabricated metal enclosures and is vital to the security of the Monmouth business. Our new acquisitions have contributed GBP3.6m of third-party revenues to SDI in this financial year, and have been immediately earnings enhancing.


The pandemic has meant we have had to reassess our working practices to accommodate social distancing in our manufacturing areas and provide the IT capabilities to our workforce to where possible work from home efficiently. This has meant that all our manufacturing sites have remained fully operational and due to safety measures put in place we have fortunately had few cases of COVID-19 amongst our staff, and none have become seriously ill.

SDI is continually investing in improving its facilities and staff expertise, as well as developing new technologies and manufacturing capacity where required. To this end, we are investing in larger purpose-built premises for Monmouth Scientific. The new site, which will provide 25% more space for the company and will consolidate operations on one site, is expected to be ready for use by the first half of calendar 2022. Our R&D effort, aimed at increasing the breadth and competitiveness of our product range, has continued during the year, although with some resources distracted on supply chain issues and with product launches more muted than usual. We continue to see R&D as a source of growth for our businesses.

While many of our businesses have seen revenues negatively impacted by the COVID-19 pandemic, two (Atik and MPB) secured significant one-time contracts for equipment relating respectively to testing and treatment of COVID-19. Atik has a follow-on contract with a global OEM until April 2022 to supply customised CCD cameras for use in real-time PCR DNA amplifiers that can be used for COVID-19 testing. Atik has the capacity and expertise to fulfil this large contract safely because SDI has invested in a larger production site in Lisbon, Portugal which is now fully operational and has recruited extra R&D and manufacturing staff. There is no certainty of further orders once this contract has been fulfilled.

In this financial year, MPB also completed a major contract from a medical devices company Penlon, to supply 40,000 human anaesthetic variable area flowmeters for ventilator systems to help treat patients suffering with COVID-19. Again, fulfilling this contract was made possible due to the additional investment SDI made in state-of the art tube washing plant, laser engraving equipment and IT infrastructure. MPB is now in a stronger manufacturing position and has a solid order book, including for veterinary gas anaesthesia flowmeters, making their business secure going into the new financial year.

Synoptics had a good year for orders of its Syngene DNA imaging systems in Asia-Pacific and Europe and has also sold five Synbiosis AutoCOL fully automated systems for colony counting. The AutoCOL is the highest priced equipment the company has ever produced, and Synoptics staff have become highly proficient at on-line demos and training which is helping with orders. To date, systems have been delivered to a top ten pharma company and to major contract research organisations, where they are being used for environmental monitoring.

OEM production of Fistreem water purification systems by Synoptics for a major US life science supplier continues to provide a steady flow of orders. Synoptics forecasts that its product mix of low-end consumable type products and high-end automation will continue to be in demand and will ensure Synoptics sales and profitability are robust in the new financial year.

Graticules Optics has been working hard with key customers and suppliers to perfect definition and production of grids made from molybdenum, gold, and other rare metals to satisfy demand from leading customers in applications such as semiconductors, life sciences and material analysis, and is investing in production equipment for both process and capacity improvement.

Cash and Liquidity

SDI has a strong balance sheet with current year-end cash at more than GBP3.8m, and GBP5.0m of undrawn bank facility, which ends in April 2023. The Group therefore has sufficient funds that can be used, with its steady cash flow, to acquire new companies with niche technologies. SDI expects to announce further expansion of the Group with the acquisition of one to two new companies by the end of the 2021-2022 financial year.

Trading Outlook

Many of the academic and pharma/biotech laboratories are now operating at normal capacity and have budget to spend. The pandemic is still affecting global travel and scientific conventions, but we have been able to resume UK-based service contracts and have become highly efficient with our on-line demos and training and are now able to sell and install even our high-cost systems outside the UK this way.

Due to the increase in the price of raw materials, labour and logistical costs, our costs of goods sold are increasing. However, our operating expenses are not yet at pre-pandemic levels. We intend to continue reviewing all costs and will where appropriate pass on cost increases to our customers to maintain profitability.

We are in a strong position financially with good operational cash flows and robust orders from our companies involved in supplying products and services in the fight against COVID-19. To date the effects of the pandemic on our trading performance has been limited because we are a diversified group of companies. Our Group has shown its resilience and adaptability in the past year and we expect to trade profitably this year.

Mike Creedon

Chief Executive Officer

19 July 2021

Chief Financial Officer's Report

Revenue and Profits

SDI Group revenues for the year were GBP35.1m, compared with GBP24.5m in 2020, an increase of 43.2% over 2020. Sales growth from acquired businesses, including sales of Chell Instruments in the period to the acquisition anniversary at end November 2020 and post-acquisition sales of Monmouth Scientific and Uniform Engineering, contributed GBP6.1m, while organic sales growth was GBP4.5m or 19%. Sales arising from two specific one-off COVID-19-related contracts, at Atik for cameras into PCR instruments and at MPB for flowmeters into ventilators, totalled GBP6.1m in the year. The contract at Atik is continuing in 2022.

Gross profit increased to GBP22.9m (2020: GBP16.6m), with margin reduced to 65.2% (2020: 67.8%) due to significant product mix changes including lower than average gross margins at Monmouth Scientific and on the Atik PCR camera sales.

Operating profit for the year was GBP5.9m (2020: GBP3.5m), and Adjusted Operating Profit (AOP) was GBP7.7m (2020: GBP4.6m) before reorganisation costs, share based payments, acquisition costs and amortisation of acquired intangible assets, an increase of 67.3%. Significant drivers of the increase were the organic sales increase, plus the added contributions of the acquired businesses.

Under the major disruption to activities of the COVID-19 pandemic, all of our businesses responded by reducing costs, while also taking advantage of the UK government's Coronavirus Job Retention Scheme to maintain employment and skills in the early phase. As economic activity recovered and customers' buying resumed, our businesses each returned to full active employment. Two businesses, Atik Cameras and MPB Industries, have repaid the government furlough subsidy received for the years 2020 and 2021 in the light of their COVID-19-related sales. The total subsidy received across the Group in the year was GBP273k. The Group did not receive business rates relief.

Investment in R&D

Under IFRS we are required to capitalise certain development expenditure and in the year ended 30 April 2021 GBP367k (2019: GBP536k) of cost was capitalised. Much of the work of our growing R&D teams does not qualify for capitalisation, and is charged directly to expense. Amortisation and write-offs for 2021 were GBP425k (2020: GBP528k). The carrying value of the capitalised development at 30 April 2021 was GBP1.0m (2020: GBP1.2m) to be amortised between 3 - 5 years.


The Board carried out a thorough review of the operations and cost structure of the Group and this gave rise to GBP132k (2020: GBP110k) of reorganisation costs in the year impacting several businesses, which should bring benefits in the current year.

Acquisition Costs

There were costs of GBP179k (2020: GBP58k) in relation to stamp duty, legal fees, and other advisor remuneration for the acquisitions completed in the year.


Financing costs totalled GBP287k (2020: 254k), reflecting the drawdown on loans effected early in the year as the outcome of the pandemic was uncertain.


Taxation accrued for the year was GBP936k (2020: GBP666k) with the increase arising mainly through improved profitability. The net tax rate was 16.6% (2020: 20.4%). 2020 was impacted adversely by the reversion to a 19% enacted UK statutory tax rate (previously 17%) on deferred tax liabilities which resulted in additional expense of GBP158k. The group continues to benefit from R&D tax credits.

Earnings per Share

Diluted earnings per share for the Group was 4.58p (2020: 2.56p). Adjusted diluted EPS, an alternative performance measure which excludes certain non-cash and non-recurring expenses was 5.97p (2020: 3.43p), an increase of 74.0%.

Cash Flow and Working Capital

During the year the Group generated cash from operations of GBP11.7m (2020: GBP5.2m). Most notable was the GBP3.5m increase in customer advanced payments received, which Is largely attributable to COVID-19 related contracts in Atik. Taxes paid increased from GBP786k to GBP1.2m.

Our investment in fixed assets increased to GBP667k (2020: GBP506k) with significant investments in Atik and Monmouth.

Capitalised Research and Development expense at GBP367k (2020: GBP536k) was lower than amortisation of GBP425k (2020: GBP528k).

As in prior years, our biggest investment was in the acquisition of new businesses, with GBP6.6m deployed on a cash-free basis (including contingent consideration) for Monmouth Scientific and Uniform Engineering (2020: GBP5.2m for Chell Instruments). At the end of the year contingent consideration of GBP2.35m was outstanding for Monmouth and this has since been paid to the sellers.

National Insurance and Deferred Tax

During the year to 30 April 2021, the share price of SDI Group plc increased from 52.5p to 179p. This will, of course, be welcomed by shareholders. However, this increase, outside of the immediate control of the Group, has had two contrasting effects on the profitability and future cash flows of the company, related to share options issued to directors and management.

Firstly, we have accrued GBP578k for future employer's National Insurance charges on option exercises outside of HMRC approved schemes (2020: GBPnil). As the Group is no longer eligible to issue share options under the EMI approved scheme, shareholders should expect such accruals and cash expense going forward, although the actual cost is directly related to share price movements and to the amount of options outstanding.

Secondly, the exercise of share options by directors and employees generates a tax deduction for the Group, leading to lower cash taxes to be paid. To the extent that the expected tax deduction is higher than the share-based payment expense originally recorded for the same options, part of the tax expense saved is credited directly to equity. In 2021, we have credited GBP1,438k (2020: GBPnil) of deferred tax benefit directly to equity, based on the closing share price at 30 April 2021. Subject to future share price movements, option vesting and exercises, and tax rates, this represents future cash tax savings available to the Group.


Our investments were financed out of our own cash flow, except for the issue of 230,680 shares valued at GBP200,000 as part payment for our Monmouth Scientific acquisition.

Having started the year with our bank loan facility almost completely drawn down during the initial phase of the COVID-19 pandemic, with gross bank debt of GBP9.3m and cash of GBP5.3m, we closed 2021 with loans of GBP3.1m and cash of GBP3.8m. Our committed but undrawn loan facility was GBP5.0m. Our lender has signalled that it is willing to increase our facility further, and our increasing cash flow and resilience during the pandemic gives directors confidence that the Group can support a higher level of borrowing if needed.

Jon Abell


19 July 2021

Strategic Overview

SDI Group is an AIM-quoted group specialising in the acquisition and development of a portfolio of companies that design and manufacture products for use in digital imaging and sensing and control applications in science, technology and medical markets. Corporate expansion is being pursued, both through organic growth within its subsidiary companies and through the acquisition of high-quality businesses with established reputations in global markets.

The Board believes there are many businesses operating within the market, a number of which have not achieved critical mass, and that presents an ideal opportunity for consolidation. This strategy will be primarily focused within the UK but, where opportunities exist, acquisitions in Europe and the United States and elsewhere will also be considered, particularly if these also enable geographic expansion of our existing businesses.

We intend to continue to buy stand-alone businesses as well as smaller entities and technology acquisitions which bolt onto our existing ones. Our track record over the last seven years has been good, with thirteen businesses acquired across our digital imaging and sensors and controls segments.

An important element of our strategy is that we are known to be a good acquirer, able to help sellers to achieve a sale quickly and easily, and without surprises.

We keep a lean headquarters, and our businesses are run by seasoned local management with broad discretion within defined limits. Our aim is to grow them, profitably, and we seek to provide them with the resources necessary to grow. Acquired businesses often find that they can grow faster within the SDI Group than they were prepared to do under private ownership, and they are able to learn from and share experience with other companies in the Group.

Our current businesses fall broadly into two segments, which we call Digital Imaging and Sensors & Control, and within these groupings there are significant commonalities of applications, industries served and technologies employed. This provides additional opportunity for knowledge sharing, which we encourage.

Growth in revenues and profit within our businesses depends on both technology advancement and seeking new customers, often by expanding geographical reach, and the Board sees geographical expansion as a driver of organic growth for the future.

By lowering the cost of capital of businesses we acquire and by facilitating their profitable growth, our business model has demonstrated that it can provide good returns to shareholders and can be scaled into the future.

Key Performance Indicators

A range of financial key performance indicators are monitored on a monthly basis against budget by the Board and by management, including order pipeline, revenue, gross profit, costs, adjusted operating profit, and cash.

In support of our acquisition strategy as outlined above, we monitor our acquisition pipeline, including any prospects that fail to progress. Post-acquisition, the Board discusses integration progress, and monitors financial performance against our initial plans. Over a longer period, we monitor the return on total invested capital of all of our businesses.

The Board regularly discusses progress in all major research and development and other projects with project and business leaders, including with respect to cost, timelines and adherence to the projects' initial objectives.

Additionally, the Board reserves a specific agenda item for discussion of health and safety and other employee welfare-related issues.

Consolidated income statement and statement of comprehensive income

                                        2021      2020 
                              Note   GBP'000   GBP'000 
 Revenue                       2      35,076    24,498 
 Cost of sales                      (12,206)   (7,899) 
                                    --------  -------- 
 Gross profit                         22,870    16,599 
 Other income                             21        19 
 Operating expenses                 (16,960)  (13,107) 
 Operating profit                      5,931     3,511 
 Net financing expenses                (287)     (254) 
 Profit before tax             3       5,644     3,257 
 Income tax                    4       (936)     (666) 
 Profit for the year                   4,708     2,591 
 Earnings per share 
 Basic earnings per share      7       4.81p     2.66p 
 Diluted earnings per share    7       4.58p     2.56p 

All activities of the Group are classed as continuing.

                                                     2021        2020 
                                                  GBP'000     GBP'000 
Profit for the year                                 4,708       2,591 
Other comprehensive income 
Items that will subsequently be reclassified 
 to profit and loss: 
Exchange differences on translating foreign 
 operations                                          (96)          41 
                                               ----------  ---------- 
Total comprehensive income for the year             4,612       2,632 
                                               ----------  ---------- 

Consolidated balance sheet

Company registration number:          2021      2020 
 6385396                        Note 
                                      GBP'000   GBP'000 
Intangible assets                     26,237    21,650 
Property, plant and equipment         4,131     3,901 
Deferred tax asset                    1,697     246 
                                      --------  --------- 
                                      32,065    25,797 
Current assets 
Inventories                           6,059     3,728 
Trade and other receivables           6,743     3,617 
Cash and cash equivalents             3,836     5,290 
                                      --------  --------- 
                                      16,638    12,635 
Total assets                          48,703    38,432 
                                      --------  --------- 
Non-current liabilities 
Borrowings                       6    (3,764)   (10,376) 
Deferred tax liability                (2,479)   (2,134) 
                                      --------  --------- 
                                      (6,243)   (12,510) 
Current liabilities 
Trade and other payables         5    (12,826)  (3,350) 
Provisions for warranties             (230)     (85) 
Borrowings                       6    (1,880)   (1,910) 
Current tax payable                   (750)     (513) 
                                      --------  --------- 
                                      (15,686)  (5,858) 
Total liabilities                     (21,929)  (18,368) 
                                      --------  --------- 
Net assets                            26,774    20,064 
                                      ========  ========= 
Share capital                         984       975 
Merger reserve                        2,606     2,606 
Merger relief reserve                 424       424 
Share premium account                 9,092     8,746 
Share based payment reserve           714       467 
Foreign exchange reserve              85        181 
Retained earnings                     12,869    6,665 
                                      --------  --------- 
Total equity                          26,774    20,064 
                                      ========  ========= 

*See note 8

Consolidated statement of cashflows

                                                   Note  2021      2020 
                                                         GBP'000   GBP'000 
Operating activities 
Net profit for the year                                  4,708     2,591 
Depreciation                                             973       831 
Amortisation                                             1,589     1,189 
Finance costs and income                                 287       254 
Impairment of intangible assets                          130       22 
(Decrease)/increase in provisions                        (15)      74 
Taxation in the income statement                         936       666 
Employee share-based payments                            305       276 
                                                         --------  ------- 
Operating cash flows before movement in 
 working capital                                         8,913     5,903 
Decrease in inventories                                  (977)     (539) 
(Increase)/decrease in trade and other 
 receivables                                             (2,363)   726 
Increase/(decrease) in trade and other 
 payables                                                6,137     (921) 
                                                         --------  ------- 
Cash generated from operations                           11,710    5,169 
Interest paid                                            (287)     (253) 
Income taxes paid                                        (1,166)   (786) 
                                                         --------  ------- 
Cash generated from operating activities                 10,257    4,130 
Investing activities 
Capital expenditure on fixed assets                      (667)     (506) 
Sale of property, plant and equipment                    67        - 
Expenditure on development and other intangibles         (367)     (582) 
Acquisition of subsidiaries, net of cash                 (4,057)   (5,182) 
                                                         --------  ------- 
Net cash used in investing activities                    (5,024)   (6,270) 
Financing activities 
Finance leases net repayments                       6    (489)     (511) 
Proceeds from bank borrowing                        6    5,404     6,496 
Repayment of borrowings                             6    (11,652)  (1,143) 
Issues of shares and proceeds from option 
 exercise                                                155       80 
                                                         --------  ------- 
Net cash from financing                                  (6,582)   4,922 
Net changes in cash and cash equivalents                 (1,349)   2,782 
Cash and cash equivalents, beginning of 
 year                                                    5,290     2,494 
Foreign currency movements on cash balances              (105)     14 
                                                         ========  ======= 
Cash and cash equivalents, end of year                   3,836     5,290 
                                                         ========  ======= 

Consolidated statement of changes in equity

                                                       Merger                            Own          Share 
                                                       relief                         shares          based 
                                    Share    Merger   reserve    Foreign     Share   held by        payment     Retained 
                                  capital   reserve             exchange   premium       EBT        reserve     earnings     Total 
                                  GBP'000   GBP'000   GBP'000    GBP'000   GBP'000   GBP'000        GBP'000      GBP'000   GBP'000 
 Balance at 30 April 2019             972     3,030         -        140     8,696      (17)            284        3,981    17,086 
 Restatement (note 8)                   -     (424)       424          -         -         -              -            -         - 
                             ------------  --------  --------  ---------  --------  --------  -------------  -----------  -------- 
 Restated balance 30 April 
  2019                                972     2,606       424        140     8,696      (17)            284        3,981    17,086 
 Shares issued                          3         -         -          -        50        17              -            -        70 
 Share based payment 
  transfer                              -         -         -          -         -         -           (93)           93         - 
 Share based payments                   -         -         -          -         -         -            276            -       276 
 Transactions with owners               3         -         -          -        50        17            183           93       346 
 Profit for the year                    -         -         -          -         -         -              -        2,591     2,591 
 Foreign exchange on 
  consolidation of 
  subsidiaries                          -         -         -         41         -         -              -            -        41 
                             ------------  --------  --------  ---------  --------  --------  -------------  -----------  -------- 
 Total comprehensive income 
  for the period                        -         -                   41         -         -              -        2,591     2,632 
 Balance at 30 April 2020             975     2,606       424        181     8,746         -            467        6,665    20,064 
                             ============  ========  ========  =========  ========  ========  =============  ===========  ======== 

Consolidated statement of changes in equity

                                Share    Merger    Merger    Foreign     Share       Own          Share     Retained      Total 
                              capital   reserve    relief   exchange   premium    shares          based     earnings 
                                                  reserve                        held by        payment 
                                                                                     EBT        reserve 
                              GBP'000   GBP'000   GBP'000    GBP'000   GBP'000   GBP'000        GBP'000      GBP'000    GBP'000 
 Balance at 30 April 2020 
  (previously stated)             975     3,030         -        181     8,746         -            467        6,665     20,064 
 Restatement (note 8)               -     (424)       424          -         -         -              -            -          - 
                             --------  --------  --------  ---------  --------  --------  -------------  -----------  --------- 
 Restated balance at 30 
  April 2020                      975     2,606       424        181     8,746         -            467        6,665     20,064 
 Shares issued                      9         -         -          -       346         -              -            -        355 
 Tax in respect of share 
  options                           -         -         -          -         -         -              -        1,438      1,438 
 Share based payment 
  transfer                          -         -         -          -         -         -           (58)           58          - 
 Share based payments               -         -         -          -         -         -            305            -        305 
 Transactions with owners           9         -         -          -       346         -            247        1,496      2,098 
 Profit for the year                -         -         -          -         -         -              -        4,708      4,708 
 Foreign exchange on 
  consolidation of 
  subsidiaries                      -         -         -       (96)         -         -              -            -       (96) 
                             --------  --------  --------  ---------  --------  --------  -------------  -----------  --------- 
 Total comprehensive income 
  for the period                    -         -         -       (96)         -         -              -        4,708      4,612 
 Balance at 30 April 2021         984     2,606       424         85     9,092         -            714       12,869     26,774 
                             ========  ========  ========  =========  ========  ========  =============  ===========  ========= 

Notes to the consolidated financial statements


The Group uses Adjusted Operating Profit, Adjusted Profit Before Tax, Adjusted Diluted EPS and Net Operating Assets as supplemental measures of the Group's profitability and investment in business-related assets, in addition to measures defined under IFRS. The Group considers these useful due to the exclusion of specific items that are considered to hinder comparison of underlying profitability and investments of the Group's segments and businesses, and is aware that shareholders use these measures to evaluate performance over time. The adjusting items for the alternative measures of profit are either recurring but non-cash charges (share-based payments and amortisation of acquired intangible assets) or exceptional items (reorganisation costs and acquisition costs).

The following table is included to define the term Adjusted Operating Profit:

                                                   2021       2020 
                                                GBP'000    GBP'000 
--------------------------------------------  ---------  --------- 
 Operating Profit (as reported)                   5,931      3,511 
 Adjusting items (all costs): 
 Non-underlying items 
 Share based payments                               305        276 
 Amortisation of acquired intangible assets       1,153        647 
 Exceptional items 
 Reorganisation costs                               132        110 
 Acquisition costs                                  179         58 
 Total adjusting items                            1,769      1,091 
 Adjusted Operating Profit                        7,700      4,602 
--------------------------------------------  ---------  --------- 

Adjusted Profit Before Tax is defined as follows:

                                                   2021       2020 
                                                GBP'000    GBP'000 
--------------------------------------------  ---------  --------- 
 Profit before tax (as reported)                  5,644      3,257 
 Adjusting items (all costs): 
 Non-underlying items 
 Share based payments                               305        276 
 Amortisation of acquired intangible assets       1,153        647 
 Exceptional items 
 Reorganisation costs                               132        110 
 Acquisition costs                                  179         58 
--------------------------------------------  ---------  --------- 
 Total adjusting items                            1,769      1,091 
 Adjusted Profit Before Tax                       7,413      4,348 
--------------------------------------------  ---------  --------- 

Adjusted EPS is defined as follows:

                                                   2021              2020 
                                                  GBP'000         GBP'000 
---------------------------------------------  ------------  ------------ 
 Profit for the year                                  4,708         2,591 
 Adjusting items (all costs): 
 Non-underlying items 
 Share based payments                                   305           276 
 Amortisation of acquired intangible assets           1,153           647 
 Exceptional items 
 Reorganisation costs                                   132           110 
 Acquisition costs                                      179            58 
---------------------------------------------  ------------  ------------ 
 Total adjusting items                                1,769         1,091 
 Less taxation on adjusting items calculated 
  at the UK statutory rate                            (336)         (207) 
                                               ------------  ------------ 
 Adjusted profit for the year                         6,141         3,475 
 Divided by diluted weighted average number 
  of shares in issue 
  (note 7)                                      102,799,084   101,206,148 
 Adjusted Diluted EPS                                 5.97p         3.43p 
---------------------------------------------  ------------  ------------ 

The following table is included to define the term Net Operating Assets:

                                                      2021       2020 
                                                   GBP'000    GBP'000 
-----------------------------------------------  ---------  --------- 
 Net assets                                         26,774     20,064 
 Deferred tax asset                                  1,697        246 
 Corporation tax asset                                  17         52 
 Cash and cash equivalents                           3,836      5,290 
 Borrowings and lease liabilities (current and 
  non-current)                                     (5,644)   (12,286) 
 Deferred consideration                            (2,350)          - 
 Deferred tax liability                            (2,479)    (2,134) 
 Current tax payable                                 (750)      (513) 
-----------------------------------------------  ---------  --------- 
 Total adjusting items within Net assets           (5,673)    (9,345) 
 Net Operating Assets                               32,447     29,409 
-----------------------------------------------  ---------  --------- 
   2               SEGMENT ANALYSIS 

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

The Sensors & Control segment combines our Sentek, Astles Control Systems, Applied Thermal Control, Thermal Exchange, MPB Industries, Chell Instruments, Monmouth Scientific and Uniform Engineering businesses. All of these businesses provide products that 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.

The Board of Directors reviews operational results of these segments on a monthly basis, and decides on resource allocations to the segments and is considered the Group's chief operational decision maker.

                                                   2021       2020 
                                                  Total      Total 
                                                GBP'000    GBP'000 
--------------------------------------------  ---------  --------- 
    Digital Imaging                              15,788     11,050 
    Sensors & Control                            19,288     13,448 
 Group                                           35,076     24,498 
 Adjusted Operating Profit 
    Digital Imaging                               5,165      2,382 
    Sensors & Control                             4,360      3,028 
    Other                                       (1,825)      (808) 
--------------------------------------------  ---------  --------- 
 Group                                            7,700      4,602 
 Amortisation of acquired intangible assets 
    Digital Imaging                               (175)      (182) 
    Sensors & Control                             (978)      (465) 
 Group                                          (1,153)      (647) 
--------------------------------------------  ---------  --------- 

Analysis of amortisation of acquired intangible assets has been included separately as the Group considers it to be an important component of profit which is directly attributable to the reported segments.

The Other category includes costs which cannot be allocated to the other segments, and consists principally of Group head office costs.

                                                       2021       2020 
                                                      Total      Total 
                                                    GBP'000    GBP'000 
------------------------------------------------  ---------  --------- 
 Operating assets excluding acquired intangible 
    Digital Imaging                                   7,895      6,281 
    Sensors & Control                                 9,683      5,993 
    Other                                               131        120 
------------------------------------------------  ---------  --------- 
 Group                                               17,709     12,394 
 Acquired intangible assets 
    Digital Imaging                                   5,195      5,370 
    Sensors & Control                                20,251     15,068 
 Group                                               25,446     20,438 
 Operating Liabilities 
    Digital Imaging                                 (5,439)    (1,190) 
    Sensors & Control                               (4,204)    (2,087) 
    Other                                           (1,064)      (158) 
------------------------------------------------  ---------  --------- 
 Group                                             (10,707)    (3,435) 
 Net operating assets 
    Digital Imaging                                   7,650     10,550 
    Sensors & Control                                25,731     19,042 
    Other                                             (934)      (183) 
------------------------------------------------  ---------  --------- 
 Group                                               32,447     29,409 
    Digital Imaging                                     461        435 
    Sensors & Control                                   505        389 
    Other                                                 7          7 
------------------------------------------------  ---------  --------- 
 Group                                                  973        831 

The geographical analysis of revenue by destination, analysis of revenue by product or service, and non-current assets by location are set out below:

Revenue by destination of external customer   2021     2020 
                                              GBP'000  GBP'000 
United Kingdom (country of domicile)          15,343   10,249 
Europe                                        5,137    5,129 
America                                       3,365    3,290 
China                                         6,854    910 
Asia (excluding China)                        3,088    3,582 
Rest of World                                 1,289    1,338 
                                              -------  ------- 
                                              35,076   24,498 
                                              =======  ======= 
Revenue by product or service   2021     2020 
                                GBP'000  GBP'000 
Instruments and spare parts     34,640   23,894 
Services                        436      604 
                                -------  ------- 
                                35,076   24,498 
                                =======  ======= 

16% of Group revenue was from a single customer during the year.

Non-current assets by location   2021     2020 
                                 GBP'000  GBP'000 
United Kingdom                   29,824   24,872 
Portugal                         396      412 
America                          148      227 
                                 -------  ------- 
                                 30,368   25,511 
                                 =======  ======= 
   3               PROFIT BEFORE TAXATION 

Profit for the year has been arrived at after charging:

                                                     2021     2020 
                                                     GBP'000  GBP'000 
Amortisation and write-down of intangible 
 assets                                              1,589    1,189 
Depreciation charge for the year - Right-of-use 
 assets                                              528      490 
Depreciation charge for the year - Other 
 assets                                              445      342 
Auditor's remuneration Group: 
        *    Audit of Group accounts                 20       18 
Fees paid to the auditor and its associates 
 in respect of other services: 
        *    Audit of Company and of subsidiaries    165      151 
        *    Tax compliance services                 -        34 
        *    Audit related assurance services        12       12 
Currency exchange loss                               72       9 
Reorganisation costs                                 132      110 
Acquisition costs                                    179      58 
   4               TaxATION 
                                         2021     2020 
                                         GBP'000  GBP'000 
Corporation tax: 
Prior year corporation tax adjustment    -        17 
Current tax charge                       1,220    544 
                                         -------  ------- 
                                         1,220    561 
Deferred tax expense/(income)            (284)    105 
                                         -------  ------- 
Income tax charge                        936      666 
                                         =======  ======= 

Reconciliation of effective tax rate

                                              2021     2020 
                                              GBP'000  GBP'000 
Profit on ordinary activities before tax      5,644    3,257 
                                              -------  ------- 
Profit on ordinary activities multiplied 
 by standard rate of 
 Corporation tax in the UK of 19% (2020: 
 19%)                                         1,072    619 
Effects of: 
Expenses not deductible for tax purposes      30       22 
Additional deduction for R&D expenditure      (162)    (135) 
Prior year tax adjustments                    (18)     17 
Update deferred tax liabilities and assets 
 to enacted future tax rate of 19% (2020: 
 19%)                                         -        158 
Other                                         14       (15) 
                                              -------  ------- 
                                              936      666 
                                              =======  ======= 

The Group takes advantage of the enhanced tax deductions for Research and Development expenditure in the UK and expects to continue to be able to do so.

   5               Trade and other payables 
                                     2021     2020 
                                  GBP'000  GBP'000 
Trade payables                      3,347    1,427 
Social security and other 
 taxes                                751      379 
Contingent consideration            2,350        - 
Other payables                        705       90 
Accruals and deferred income        5,673    1,454 
                                   12,826    3,350 
                                  =======  ======= 

Accruals and deferred income includes an amount of GBP3,875k (2020: GBP398k) in respect of contract liabilities for revenues relating to performance obligations expected to be satisfied within the next 12 months. The contract liabilities balance has increased significantly during the year as a result of the significant contract for equipment relating to testing of COVID-19 in Atik. All of the prior year contract liabilities of GBP398k were recognised as revenue during the current year.

At the end of the year, contingent consideration of GBP2.35m was outstanding for Monmouth and this has since been paid to the sellers.

All amounts are short-term. The carrying values are considered to be a reasonable approximation of fair value.

   6               Borrowings 

Borrowings are repayable as follows:

                                   2021     2020 
                                   GBP'000  GBP'000 
Within one year 
Bank finance                       1,371    1,371 
Leases                             509      539 
                                   -------  ------- 
                                   1,880    1,910 
                                   -------  ------- 
After one and within five years 
Bank finance                       1,714    7,962 
Leases                             2,050    2,414 
                                   -------  ------- 
                                   3,764    10,376 
                                   -------  ------- 
Total borrowings                   5,644    12,286 
                                   =======  ======= 

Bank finance relates to amounts drawn down under the Group's bank facility with HSBC Bank plc, which is secured against all assets of the Group. The facility consists of a revolving facility of GBP5.0m and an amortising facility which reduces in quarterly instalments from GBP4.8m when it was taken out in November 2019 to zero by April 2023, when the current agreement expires. The revolving facility is undrawn, and is available for general use. The facility has covenants relating to leverage (net debt to EBITDA), interest coverage, and cashflow to debt service.

   7               Earnings per share 

The calculation of the basic earnings per share is based on the profits attributable to the shareholders of SDI Group plc divided by the weighted average number of shares in issue during the period. All profit per share calculations relate to continuing operations of the Group.

                                 attributable      Weighted     Earnings 
                                           to       average    per share 
                                 shareholders     number of    amount in 
                                      GBP'000        shares        pence 
-----------------------------  --------------  ------------  ----------- 
 Basic earnings per share: 
    Year ended 30 April 2021            4,708    97,852,313         4.81 
    Year ended 30 April 2020            2,591    97,277,721         2.66 
 Dilutive effect of share 
  options : 
    Year ended 30 April 2021                      4,946,771 
    Year ended 30 April 2020                      3,928,426 
 Diluted earnings per share: 
    Year ended 30 April 2021            4,708   102,799,084         4.58 
    Year ended 30 April 2020            2,591   101,206,148         2.56 
-----------------------------  --------------  ------------  ----------- 

At the year end, there were no (2020: 425,000) share options which were anti-dilutive but may be dilutive in the future.

   8               Prior year restatement 

A prior year restatement was made to split out the merger relief reserve of GBP424k from the merger reserve. A third balance sheet is not required for this restatement as per IAS 1.40A given that the only effect on the information in the statement of financial position at the beginning of the comparative period was splitting out the reserve from where it was aggregated in the comparative period.

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