SDI Group set to end year in line with forecasts

20th May 2024 11:31

(Sharecast News) - Scientific digital imaging, sensing and control technology company SDI Group said in a trading update on Monday that, pending its final accounts and audit, it expected to report revenue of £65.9m for the year, in line with current market expectations, but slightly down from £67.6m in 2023.

The AIM-traded firm said it anticipated an adjusted operating profit of around £9.6m, down from £12.8m in the prior year, and an adjusted profit before tax of £8m, compared to £11.8m a year earlier.

Those results were in accordance with market expectations.

The board said the second half of the financial year saw improved profitability and cash generation from operations.

Atik Cameras received a significant order from a major OEM customer in November, boosting second-half performance.

Monmouth Scientific and Chell Instruments experienced strong sales in clean rooms, cabinets, and DAQ product ranges, respectively.

Fraser Anti-Static Techniques also reported increased revenue.

However, Scientific Vacuum Services (SVS) had a slower second half, following a large contract delivered in the first half of the year.

The company said it maintained its net debt position at £13.2m in the second half, despite a cash outflow of £3.3m for acquisitions, including Peak Sensors of £2.3m and the SVS earnout of £1m.

Gross debt at the end of the year stood at £14.6m, with £10.4m available within the revolving credit facility and an additional £5m accordion option with HSBC.

SDI Group noted that it disposed of Uniform Engineering in February for a nominal sum, resulting in a loss of £0.2m, classified as a non-recurring item.

Uniform Engineering reported external revenue of £0.45m and a small loss for the 10 months up to February.

SDI said it remained committed to investing in its existing businesses and acquiring complementary companies, continuing its buy-and-build strategy into 2025.

"I am pleased to report that the group had a good finish to the financial year, with better trading performances at a number of SDI businesses," said chairman Ken Ford.

"Stephen Brown, our new CEO, has settled into his role well and is already making an impact.

"The group's cash generation from operations improved over the second half which leaves us well placed to continue our buy and build strategy."

At 1100 BST, shares in SDI Group were up 12.08% at 71.28p.

Reporting by Josh White for Sharecast.com.