Presentation by the management team of SDI – 14/08/2023

Panelists: Mike Creedon, Chief Executive Officer and Ami Sharma, Chief Financial Officer

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.

SDI - Full Year Results FY23 Presentation

Watch the full presentation below or navigate to the segments and questions that interest you the most.

1. With regard to the debt, can you talk a little bit about the cost of the financing.

2. On the working capital front, what do you think the profile looks like over the coming year or so? Is it going to unwind or have we got more to invest?

3. Referring to the adjusted operating profit being £1.6m lower due to PCR camera sales, it would appear to be above group gross margin, and the acquisitions that you’ve made are below group gross margin. FinCap have got a pretty much stable gross margin forecast. What are your thoughts on the gross margin going forward?

What’s the competitive landscape for acquisition opportunities?

Can you provide some colour on the opportunities for geographic expansion?

We've experienced a marked mismatch sometimes between valuations in public markets and private markets. On the acquisition front and your price criteria, do you sense much change in vendors’ expectations?

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