Business Services

SDI Group plc

Market Cap (£m) 170.3
Listing AIM

Analysts

Company Description

SDl Group is an AIM-quoted group specialising in the acquisition and development of a portfolio of companies that design and manufacture niche analytical technology products for use within digital imaging and sensing and control applications in science, technology and medical markets. The group operates a well-established buy and build strategy, supplementing organic growth with earnings-accretive acquisitions of complementary businesses that have sustainable profits and cash flows. Targets are primarily UK businesses with established reputations, capable of achieving significant organic growth through developing export markets. SDI Group takes a decentralised approach, with seasoned local management given broad discretion to run group businesses within defined limits. SDI Group typically acquires businesses generating up to £1m EBIT for around 4-6 times EBIT plus net assets, including earnout payments.

Investment Summary

SDI Group successfully completed 11 acquisitions from 2014 to 2020 and the group demonstrated its resilience during 2020, with one-off COVID-19-related contracts boosting sales of two product lines, offsetting the effects of the pandemic's disruption to other group businesses. SDI Group historically funded acquisitions largely through issuing equity. However, management prefers to acquire using internal funding, and acquisitions since 2018 have been mostly self-funded. Growing free cash generation should enable SDI Group to fund future acquisitions from internal cash flows, reducing the likelihood of the group issuing equity to maintain its growth profile. Earnings forecasts only reflect organic growth, and future acquisitions have to potential to boost SDI Group's earnings significantly, based on the group's proven track record of delivering significant inorganic earnings growth.

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Company Management Team

  • Mike Creedon

    Chief Executive Officer

    Mike joined the Board in 2010. A Chartered Certified Accountant with an MBA from Henley Management College, Mike brings to SDI considerable experience of working within quoted companies and technology businesses, and fundraising, mergers and acquisitions. In particular, he has recent experience of AIM-listed technology companies. Previous Finance Director posts include Ninth Floor plc and Ideal Shopping Direct plc.

  • Ami Sharma

    Chief Financial Officer

    Ami joined the Board in August 2022. He has over 30 years’ experience in public and private companies of various sizes. Most recently, Ami was Group CFO at FTSE 250 listed Ultra Electronics Holdings plc, an international manufacturing group with a focus in the aerospace and defence market.  He was also CFO of Gibbs and Dandy plc, a smaller listed company.  Ami has, in the past, held senior finance roles at Senior plc and Saint Gobain Building Distribution and has extensive experience of corporate transactions, driving operational improvements, and raising finance.  Previously, he was an audit manager with KPMG and is a Fellow of the Institute of Chartered Accountants.

Key Dates

Apr 2020
23rd
Q4 TU
Actual
Jul 2020
21st
Finals
Actual
Sep 2020
23rd
AGM
Actual
Oct 2020
22nd
Q2 TU
Actual
Dec 2020
9th
Interims
Actual
Feb 2021
10th
Q3 TU
Actual
May 2021
26th
Q4 TU
Actual
Jul 2021
20th
Finals
Actual
Sep 2021
22nd
AGM
Actual
Nov 2021
4th
Q2 TU
Actual
Dec 2021
7th
Interims
Actual
May 2022
6th
Q4 TU
Actual
Jul 2022
21st
Finals
Actual
Sep 2022
21st
AGM
Actual
Nov 2022
4th
Q2 TU
Estimate
Dec 2022
7th
Interims
Estimate
May 2023
6th
Q4 TU
Estimate
Jul 2023
21st
Finals
Estimate
Sep 2023
21st
AGM
Estimate