SDI Group Share Price (SDI)

Universal Investment GmbH have declared they have a 4.99% stake in SDI, or 5.22m shares:

Https://uk.advfn.com/stock-market/london/sdi-SDI/share-news/SDI-Group-PLC-Holdings-in-Company/93913454

They must be a new major shareholder, as they don't appear on SDI's major holder list as at 10th April:

Https://sdigroup.com/investors/shareholder-information/

The reason for their declaration is that they fell below 5% due to the shares issued on 3rd April, but I can't see any RNS noting their initial stake of 5% or above? Maybe someone else can.

Interesting to see sector comparator JDG fall by 1000p folowing their trading statement today, due to company-specific issues.

Even despite the fall, JDG are still on a forward P/E of almost 27.7....compared to SDI's of 9.9.

Finncap have reiterated their 175p target price.

They also reiterate their forecasts of historic 5.8p EPS and 7.4p EPS for the current year, i.e a P/E of 9.4.

Progressive Research maintain their forecast of 7.3p EPS this year - a couple of extracts FYI:

"Solid update reflects strong second half

SDI Group’s trading update for the year ended 30 April 2024 is in line with current guidance for FY24, with good momentum heading into FY25. This reflects the hands-on approach under the new CEO, addressing short-term issues that had led to underperformance in some businesses. The underlying portfolio performed well in terms of profitability and cash generation, with improved trading in a number of businesses. The increased cashflow in H2 and significant headroom within its banking facilities leave SDI well placed to continue its buy and build strategy."

"Encouraging start to the year and forecasts maintained for FY25.

Performance was strong in the second half from a number of businesses. Atik Cameras received a large OEM order in November. Monmouth, following internal reorganisation, experienced increased clean room and cabinet sales. Chell Instruments experienced improved demand for its DAQ product range. Fraser Anti-Static also saw a pick-up in revenues. Sales at SVS are inherently lumpy with a slower H2, having delivered a large contract in H1. We leave FY25 estimates unchanged at this stage and look forward to further detail at the July results.

▪ FY24 delivered and strategy on track.

SDI delivered a solid performance in FY24, despite some continued disruption to ordering patterns and the well-flagged end to its large Chinese OEM contract within Atik Cameras. Most importantly, it has continued to do what we expect of it, successfully delivering on its buy and build strategy, coupled with underlying profitable growth and strong cash generation."

Great to see SDI trading nicely in line with expectations, no major surprises, the likes of Monmouth recovering nicely etc.

That confirms 5.8p historic EPS is in the bag. Progressive Research have this morning left their current forecast unchanged at 7.4p EPS.

That's a current year P/E of only 8.6.

Plus there's the prospect of more acquisitions given the following:

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

One would hope at such a cheap multiple that the recent rally will continue (though there might be some profit-taking by those who bought for short-term gain).

Given 7.4p forecast EPS there's potential for the share price to rally to say 100p as a nice round number for starters.