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SDI Sdi Group Plc

70.50
6.90 (10.85%)
Last Updated: 15:35:02
Delayed by 15 minutes
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 Shares Traded Last Trade
  6.90 10.85% 70.50 1,217,506 15:35:02
Bid Price Offer Price High Price Low Price Open Price
70.00 71.00 72.50 63.50 63.50
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Coml Physical, Biologcl Resh 67.58M 3.87M 0.0372 19.09 73.88M
Last Trade Time Trade Type Trade Size Trade Price Currency
15:48:43 O 1,437 70.05 GBX

Sdi (SDI) Latest News (5)

Sdi (SDI) Discussions and Chat

Sdi (SDI) Most Recent Trades

Trade Time Trade Price Trade Size Trade Value Trade Type
14:48:4470.051,4371,006.62O
14:41:3471.00400284.00O
14:35:0570.7511,2917,987.82O
14:35:0371.002819.88O
14:34:5470.3020,00014,060.00O

Sdi (SDI) Top Chat Posts

Top Posts
Posted at 20/5/2024 09:20 by Sdi Daily Update
Sdi Group Plc is listed in the Coml Physical, Biologcl Resh sector of the London Stock Exchange with ticker SDI. The last closing price for Sdi was 63.60p.
Sdi currently has 104,050,044 shares in issue. The market capitalisation of Sdi is £73,875,531.
Sdi has a price to earnings ratio (PE ratio) of 19.09.
This morning SDI shares opened at 63.50p
Posted at 20/5/2024 09:29 by steeplejack
Under the guidance of Stephen Brown,SDI appears to be a tighter ship all round,addressing itself to debt control and solid cash flow growth.Ratios,single figure PE etc,suggest this is a good entry point after marked underperformance.A more benign interest rate environment should further assist the share price.If one could believe that the risk appetite for UK small caps was meaningfully on the turn,then SDI is clearly good value.Haven't held for a good while but will reevaluate after this reassuring update.
Posted at 20/5/2024 07:51 by worldwidet
Debt was not reduced and remains high. ~3mio cash so no relevant acquisition possible. If SDI wants to continue to grow at 10-20%, they need to make 4-5 acquisitions with a total volume of ~£8-15m.
They still have to deduct the constant dilution through share options of ~2.5% from the growth per share.

A boring update that does nothing to change the extreme structural problems.

The TU confirms the red flags. Pay attention if insider buy... I don't think they will buy

Traders have pushed the share price out of an oversold state on low volume and closed the gap between 65-70p. Downtrend intact. share price 20-30 ... Waiting.

No reason to buy.

My opinion...
Posted at 08/4/2024 20:25 by worldwidet
For more than a year now, all the warning lights have been on (The massive selling of executives and the fact that no executives are buying massively even though the share price has fallen 75%). I have shown them but the permabulls have consistently ignored them. Sp -75%. Congratulations bulls.
It is sad how SDI has developed. I had hoped for something different, but I recognized early on where the journey was heading.
Whether they achieve the reduced forecasts in the short term or not is irrelevant. SdI has massive structural problems.
1. managers who are not personally committed to the company in the long term with their own money. No executive DNA of long-term thinking managers who feel like owners.
2. no M&A competence and no M&A networks. SDI always relies on consultants and intermediaries. SDI has no network of its own and no experienced and globally networked M&A executives.
3. no high-quality existing business that produces stable FCF. Past acquisitions were too expensive and of questionable quality. This can be seen in the Monmouth disaster and the collapsing FCF
4. high debt / interest burden and thus an M&A wheel that has come to a standstill.
5. poor corporate communication and poor corporate governance.
The way the CEO's departure was communicated and forecasts that were massively cut a few weeks after the announcement.
7. the new CEO has no M&A expertise. A new COO/M&A manager has to be found and sdi has to fall back on external people because there are no capable managers in its own ranks.
8. the CEO currently seems to be concentrating on the existing business, probably for a given reason. There seem to be massive problems here.
9. the CEO seems to be concentrating on M&A in the USA. Why? UsA is expensive and complex DD is necessary. Risky.
A lot can happen here. I expect the next misstep in the foreseeable future. My opinion. Make your own DD.
Posted at 09/10/2023 14:58 by worldwidet
The problem is that the CEO has focused everything on himself for the last few years. When he leaves SDI (which he will probably do soon) he will leave an absolute mess.

There are no quality leaders at SDI because the CEO has consistently made sure that good people leave SDI and the existing leaders are not rooted in SDI.

The chairman, who is well over 70, will also be leaving SDI in the foreseeable future.

The CEO should have created more potential in the fat years of COVID when interest rates were close to zero and the FCF was bubbling. Now that interest rates are at 5-6% and demand/cash flows are collapsing, it is too late to develop further.

The CEyo has sold his shares and will not buy because he is deep in thought and already retired with his wife and daughter.

I see big problems at SDI and when I think that the next few years will be marked by a deep recession, I see share prices that no SDI bull wants to think about today. I wouldn't be surprised if the recession is deeper and longer than expected and the big institutional players like Danske and JPM, etc., are not going to be able to keep up with it. Start selling into the illiquid market with panic. Also the chairman or his heirs might start selling the last stock.

More and more problems are coming to light.
Massive write-off at subsidiaries.

Strange adjustments to the figures.

Massive insider sales.

Short-term change of CFO. Abell's retirement was very spontaneous).

A 70+ year old chairman and a CEO who looks like he is preparing for retirement.

A lot can happen in the next months and years.

I remain on the sidelines here. All my personal opinion, do what you think is right and make your own decisions.
Posted at 29/9/2023 12:47 by worldwidet
Good investors recognise when a paradigm shift has taken place and a decade-long cycle of interest rate cuts has come to an end.

A good investor recognises when the framework conditions have turned 180 degrees and the management and corporate strategy are overwhelmed by the new situation.

We are not talking about a short recession like in 2020 after Covid and central banks that then bring the interest rate close to 0 and flood the markets with money.

What happens in the next 1-3 years will have an impact for the next decades.

Feel free to say today that I am exaggerating with my pessimism. But look at the bond markets because they tell you what will happen.

I would advise investors to sit on a mountain of money and buy a few ounces of gold and see what happens in the next few years. I think it's going to get pretty ugly.

Just my humble opinion and I don't make recommendations as a matter of principle.

The SDI share price seems to prove me right.

I'm out of here again and will take my time to see what happens.
Posted at 24/8/2023 07:57 by worldwidet
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.
Posted at 09/8/2023 12:43 by worldwidet
Do it even better and ignore the developments of the past that were possible in a 180 degree different environment (strong economic growth, low inflation, interest rates close to 0 and liquidity surges from central banks and fiscal stimulus from government spending.

Think about what massively rising interest rates, high inflation and cooling economy/demand mean for the future development of SDI. The good past has been priced in. The share price has risen from just over 40p a good 4 years ago to currently ~110p. The good developments of recent years have been rewarded by the market with strong returns for shareholders. For shareholders who are now considering buying, it is a matter of considering how SDI will develop under the future framework conditions. Can SDI continue to maintain these high growth rates of 30% p.a.? is that likely?

Let's assume (which I don't believe in a recessionary environment) SDI manages to generate £8m FCF. with current cash ~GBP 2.5m they could make a ~GBP 10m takeover. Assuming a 7,2x EBIT multiple then for a full FY this new business would contribute ~GBP 0.9m FCF. We are then talking about 10% FCF growth. The following FY, SDI would then have to make an 11-12m acquisition to get the same 10% FCF growth. However, the existing financing costs alone have risen to almost GBP 1 million. If SDI now falls back on more debt to make more acquisitions, the financing costs will continue to rise massively at 5-7% interest and burden the FCF.

SDI is facing extreme challenges and I think it is almost impossible that SDI can continue to develop as it has in recent years.

In general, stock markets are still overvalued. The bond markets have long since arrived in the new interest rate landscape, the stock markets are still dreaming of AI and cheap money from the central banks, which will no longer exist in the next few years.

The risk premium for equities is historically low. Investors are still willing to pay historically high valuations for historically low risk premiums for equities compared to a safe 4-5% for safe bonds. I think that will change in the coming months/years.

My opinion! I've really said enough here.
Posted at 06/6/2023 09:11 by worldwidet
Halma 38x FCF
SDI 30x FCF

If you think SDI is worth paying 30 times FCF then buy.

I think the risk premium at the current valuation is too low to buy.

SDI lacks a strong management team that is ready to take SDI to the next level.

But SDI executives hardly own any SDI shares, so there is no incentive to take SDI to the next level.

CEO Mike Creedon has done a great job in getting SDI to where it is now but it is urgent to expand SDI's structures and install leaders who are able to think bigger.

It doesn't need a one-man army, it needs a competent M&A team to take care of the M&A business so that the CEO and CFO can take care of the core business and strategic direction. It's about taking the existing business global and opening up new regions.

It is about increasing cash generation and optimising structures to increase FCF release to turn the M&A wheel faster.

As long as Mike tries to manage everything on his own, I see considerable risk.

It is about taking SDI to the next level and I have lost faith that Mike Creedon will be the right man to do it.

I respect Mike Creedon for what he has done and the value he has created for SDI shareholders but I see SDI facing huge structural challenges in the face of the RF environment which has changed massively and which are not yet included in the share price

Let's wait until the share price is in the 100p range.
Posted at 05/6/2023 14:50 by worldwidet
FinnCap (the broker closely guides by SDI management) expects only GBP 4.4m FCF for the current FY23. This means that SDI would still be trading at 30 times FCF at the current share price 131p.

Still no acquisitions in the current calendar year 2023. SDI would have to turn the M&A wheel much faster. SDI would have to make 4-6 acquisitions annually and thus constantly increase the FCF and the annual acquisitions.

But SDI is not making the much-needed progress in acquisitions because they are not creating the necessary M&A structures and lack the financial resources.

Everything at SDI is focused on one person, Mike Creedon.

Mike is pretty much handling the M&A activity on his own, but SDI urgently needs to build a competent M&A team that is focused on M&S networks and M&A execution so that the CEO and the leadership team can focus on strategy alignment and organic growth to grow FCF organically.

Mike is resting on his laurels but SDI has been stagnant for 3 years and FCF is actually declining.

If SDI does not manage to expand the M&A structures and build a competent team to minimise the one-man risk of Mike Creedon, I see serious problems.

The valuation with the 30 x FCF is still far too high. If the FCF continues to suffer in the coming recession as organic growth shrinks, the valuation will rise even further.

The share price would have to fall to 90-100p to offer an adequate risk premium.
Posted at 13/4/2023 11:14 by worldwidet
I do not see any relevant risk for SDI in the fact that Mike will eventually retire. Mike is a very smart guy and I trust him to find a worthy successor. It could even be a great opportunity for SDI if Mike were to retire as CEO in the next 5 years and become Chairman of SDI, leaving the operational business to a CEO who is willing to think bigger.

Mike has done great things at SDI and what I write should in no way diminish his achievements!

However, SDI faces very significant structural challenges that roll ups and serial acquirers inevitably bring when they get bigger.

SDI's organic growth has slowed massively in recent years. The extreme growth has mainly been supported by the special factors of Covid in combination with some good smaller acquisitions.

Now, however, SDI is struggling to increase FCF strongly enough because organic growth is cooling off too much and there is too little liquidity available to turn the M&A hamster wheel faster.

With what liquidity should SDI make 6-8 acquisitions per year to keep M&A growth at 205 and how can SDI integrate all the companies with the existing structures into the group to get organic growth back into the high single digits?

When interest rates are close to zero, as they have been in recent years, and companies can obtain credit very cheaply and consumers are in a spending mood due to cheap money, the economy and companies can grow well.

But the general conditions have changed by 180 degrees.

Companies pay interest rates of 5-6% and consumers sometimes no longer get loans at all or only at very high conditions.

The highly liquid bond markets have priced in a deep recession for the next 8-16 months, which I personally think is very likely.

SDI's organic growth has already been severely curtailed over the last 3 years in a well performing economy and SDI is struggling to generate free cash flow.

I think in a recession, when companies massively cut back on capital expenditure and consumption collapses, SDI will experience even bigger problems in FCF generation, which will have a very negative impact on M&A opportunities and thus M&A growth.

SDI is dependent on an ever faster turning M&A hamster wheel and I do not currently see the structures and the financial framework to turn this M&A hamster wheel faster in order to be able to maintain the growth target of ~28% p.a. announced by management, which is currently expected by investors at prices around 160-180p.

It remains exciting. But I see a strong recession coming at a price of 160-180p and that is not priced in.

My personal opinion.
Sdi share price data is direct from the London Stock Exchange

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