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Good to see the share price up today. Heavily oversold imo given the extremely low P/E for the sector and the strong outlook with the business "performing well" and trading nicely in line with expectations.
Looks as if Worldwide T/Sweetunicorn on the other board ,short term analysis on SDI is coming to fruition. Directors appear to have no interest in the depressed SP …only lining their pockets on cashing in options ….May be some time before 200p is reached ….if ever !
Taken as opportunity here - topped up (averaged down). May as well give up on UK plc if a innovative company like this continues to tank.
Don’t think we’ll see FC target of 200p anytime soon unless a takeover occurs. JDG drops ~ 3% today and SDI. Down ~6% !
Whats happned to old CEO thought he was the reason for growth so far here?
For the record Finncap retain their 200p target price today:
"COO appointment
As intimated at the FY 2023 results in early August, the company has announced the forthcoming appointment of Stephen Brown as Chief Operating Officer (COO), who will join the Group on 28 September. He brings a skillset and experience to the company that should provide the company with the additional management bandwidth to enable it to continue to grow through its buy and build strategy. Stephen has an engineering background, having held a number of senior positions with global product and technology focused businesses. Recent roles include: Group COO (non board) at AB Dynamics and CEO & Operating Partner at BP Launchpad, part of BP. Prior to this, he held multiple leadership roles, including (i) Global Vice President at Romax Technology, (ii) Research and Development Director (Technology and Production business unit) at Vestas Wind Systems A/S, (iii) Technical Director at the Industrial Power Group, part of Rolls Royce Holdings plc and prior to this other executive level roles in early-stage growth companies.
No change to forecasts and we reiterate our 200p target price, at which level the stock would trade on FY 2024E EV/EBIT and P/E multiples of 19.5x and 27.9x respectively, falling to 17.5x and 24.7x in FY 2025E; supported in our view by 14% adjusted EPS growth in FY 2025E, a FCF yield of 4.5% (FY 2025E) and the prospect of accretive acquisitions not yet included in the forecasts."
The new COO has a good track record. ABDP has been an unambiguous success post-IPO, and with senior leadership roles at BP, Vestas and Rolls Royce in addition he has a pretty impressive CV:
Https://uk.advfn.com/stock-market/london/sdi-SDI/share-news/SDI-Group-PLC-Board-Appointment/91886378
So it should - min fair value imo £1.50.
Hopefully a sign that the institutional presentations post-results went well.
Great new article by the Private Punter - looks like further acquisitions are on the way:
Https://martinflitton1.wixsite.com/privatepunter/post/sticking-with-sdi-group-10-08-23
It's starting to roll over now. Finally, a great opportunity to buy in (or top up) may be coming!
Whilst some may not agree with Worldwide T/Sweet unicorn on the other board, there were comments which were worthy of a little consideration, after viewing the decline in SP from 150p after recent update to 120p today.
Finncap have retained their 200p target valuation.
They point out that SDI have the capacity to add between £2.5 to £4m EBITDA to the forecast £13.3m EBITDA for this year. This would obviously increase the forecast 7.2p and then 8.1p EPS nicely.
The share price has already now factored in the known headwinds of (1) the cessation of the one-off Atik PCR sales, (2) the increase in C.Tax rates to 25% this year, and (3) interest rate increases, and is now well below the ratings of its comparators and on a big discount which hopefully has minimal downside from here.
There may or may not be more acquisitions imminently, but I'm pretty sure there will be more in the current financial year. I doubt Ken and Mike are the types to take transformational acquisition risks, but I'd be quite happy with further accretive acquisitions with upside such as that achieved by the likes of Atik and Sentek.
Really surprised at the weakness of this share. “Telegraph” punters won’t be happy!
Results are in line with the trading statement guidance at £11.8m PBT and 9.02p EPS.
Above all it's good to see confirmation that "we remain optimistic for the year ahead and we expect to deliver FY24 results in line with expectations."
Forecasts from Progressive this morning are essentially unchanged, reflecting the cessation of the one-off Atik PCR sales, at £9.7m PBT and 7.5p EPS.
There's decent headroom for further acquisitions this year, so the current year P/E of 16.3 will likely reduce somewhat.
Shame about the Monmouth writedown, but that seems to have been turned around/addressed and Monmouth remains profitable.
Organic growth of 6.4% (excluding Atik PCRs) is pretty decent in the current environment. SDI's P/E is far below that of its sector comparators at 122p and is good value in relative terms.
Results confirmed for next Tuesday - good to see an Investor Meet presentation on 11th August too:
Https://uk.advfn.com/stock-market/london/sdi-SDI/share-news/SDI-Group-PLC-Notice-of-Results-and-Investor-Prese/91706472
SDI May now be approaching value at the current SP
Good to see. Hugely undervalued compared to sector comparator JDG and an extremely well run company on its cheapest rating for a long time.
Good to see another institutional investor taking the opportunity to invest at these levels. Vind Equity crossed the threshold on 12th May with 4.35m shares, the day after the update, so were presumably buying/topping up soon afterwards.
There's not much to be found about them online, but they have invested previously in Ideagen and Porvair, so they have form in investing in successful companies:
Https://uk.advfn.com/stock-market/london/sdi-SDI/share-news/SDI-Group-PLC-Holdings-in-Company/91078433
Monet - he may well have.
Then again, the very next post by Steeplejack offers up an alternative view, Take your pick!
Yesterday’s hastily token purchase by CEO was miniscule in comparison with his exercise and sale of options over the past few years and maybe an attempt to shore up the SP prior to selling his remaining shareholding . Growth has stalled and with no dividend there may be attractive investments elsewhere in an era of high inflation and interest rates. Maybe time to revisit when valuation becomes more appealing . WorldwideT/ Sweet unicorn on the other board may have called this one right !
Agreed, the Chairman's comment seemed a bit odd - they'd clearly flagged the OEM sales as one-off so i kind of assumed that meant, well, one-off! Surprised anyone had anything in their forecasts for sales to that customer.
Main thing for me will be to see what second half free cash flow looks like. Been hard to interpret due to advance payments for orders which then reversed, plus inventory build.
As long as organic growth is positive and free cash flow roughly tracks profits then buy and build works well, and in fact compounds over time with higher profits and cash flow leading to larger acquisitions and higher profits and so on.
“ Whilst we have previously highlighted to the market that the Atik PCR OEM sales were of a one off nature, it is disappointing that there are not likely to be any more PCR camera or other product sales to this customer”
I don’t get why the Chairman would say that at this point in time. It almost suggests they were expecting follow on business, even though the market had been told it was one-off related to the pandemic.
Perhaps my interpretation but seemed odd to me.
The year end update is nicely in line with expectations.
The £69m revenues are actually well ahead of Progressive's £66.1m forecast and Finncap's £66.5m, and £11.8m PBT is bang on th average of the two forecasts.
Finncap's new target price is 200p, with 7.3p EPS forecast this coming year reduced due to the Atik PCR camera contract ending.
Good to see supply chain issues being resolved and forecast continued rising revenues despite the finsihing of PCR business, which actually Progressive had already modelled in their forecasts and everyone knew about, so I'm not sure why Finncap were including them at all.
This year should see more acquisitions which are currently unmodelled in forecasts, and I suspect Finncap's forecasts are conservative as they usually are.
SDI's multiple at 175p remains less than JDG's even on the new forecast, so is reasonable in relative terms at that level.
The share price will probably drop somewhat, but SDI remain a quality company and I suspect will announce acquisitions sooner rather than later.
Nice £118,000 buy at 167p reported this morning from late yesterday partly explains yesterday's rise.
Worth noting that sector comparator JDG are on a current year P/E of 26 - now almost 50% above SDI's current year multiple.