Presentation by the management team of SDI Group – 26/07/2022

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.

Panelists: Mike Creedon, CEO and Jon Abell, CFO

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

1. Do you build up inventory to help manage supply chain issues?

2. What percent of the Atik’s revenue was covid related and do you think revenue will change come September or is there opportunity to build in other areas?

3. How are you finding staffing costs and do you have many vacancies to fill?

4. Following your recent, strong set of results, what do you expect your medium term organic revenue and margins to look like going forward?

5. Are there many more acquisition opportunities in the market at the moment?

6. What are the opportunities for geographic expansion?

7. You mentioned that the companies across your group have coped very well with the challenging supply chain issue. Is that, in your opinion, largely behind you? Looking forward do you still foresee issues with this?

8. You have been in a very strong growth phase for a while now, is there any prospect of a dividend? Furthermore, are your investors mainly institutions or retail investors, and does this impact your decision to issue dividends?

9. When you make acquisitions, do you issue shares to sellers who want to stay involved in your business?

10. With 2 million net debt, including the consideration, how will you finance any new deals this year if the cash comes in later from the business units?

11. In the current environment, is the risk of contingent consideration likely to go lower or higher?

12. How do you determine capital allocation and what is your level of control within each of your businesses?

13. In terms of the number of units and separate divisions, have you considered consolidating?

14. In reference to the cyclicality of the various businesses, how different are they with regard to sales and purchasing and how is this managed?

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