SDI Group reports solid first half

(Sharecast News) - SDI Group reported a strong first half on Wednesday as revenue growth, margin improvements and contract wins underscored continued progress in its buy-and-build strategy.

The AIM-traded specialist lab equipment and scientific instruments group posted a 10.1% rise in revenue to £34m for the six months ended 31 October, with 3.2% organic growth and a further £2.1m contribution from acquisitions.

Gross margins on materials improved to 66.3% from 65.4%.

Adjusted operating profit rose 17.7% to £4.6m, while reported operating profit increased 32.2% to £3.2m.

Adjusted profit before tax was 21.7% higher at £3.8m and reported profit before tax climbed 46% to £2.5m.

Adjusted diluted earnings per share strengthened to 2.77p from 2.37p, with reported diluted EPS rising to 1.70p from 1.18p.

Cash generated from operations eased slightly to £4.2m from £4.7m.

After the period ended, the company expanded its committed loan facility with HSBC to £25m, including an accordion option for a further £15m.

Operationally, SDI completed the acquisition of Severn Thermal Solutions within its lab equipment division and secured significant contracts due for delivery in the second half of the year.

It also advanced efforts to drive greater collaboration across its portfolio and brought new senior leadership into place to support long-term expansion.

The company said new products launched last year were now generating revenue, reinforcing its focus on innovation.

Chief executive Stephen Brown said the group's diversified model continues to provide resilience.

"We have delivered a great set of results despite challenging market conditions, which is testament to our operating model, our strategy and the determination of our team," he said.

Brown added that SDI remains "on track to meet full-year market expectations" and was seeing "attractive opportunities to add to our proven track record of value-enhancing acquisitions".

The group said it expected a similar weighting of profits between the first and second halves as last year and said it has good visibility for the remainder of the 2026 financial year.

Brown said SDI's structure and leadership team leave it "well positioned to achieve our long-term objectives" through continued innovation, synergies and growth.

At 1305 GMT, shares in SDI Group were up 2.15% at 76p.

Reporting by Josh White for Sharecast.com.

SDI Group