SDI

[galumay]

SDI have really struggled to translate their plans for transitioning the business into reality, the latest check came with a very significant profit downgrade this month for H1 2018. Essentially it was a profit downgrade for 50% from circa $2m to circa $1m. I see an opportunity to increase my position at a much lower cost as the SP has fallen below 50c from my average cost of 75c.

While I am tempted to pick up some more it might be better to wait until the EOFY to see what happens for the full year results.

Quoting Madamswer,

The key milestone that I am looking for before adding to my holdings is an EBITDA figure of $6.5m for JH2018, which will be 15% lower than pcp. (That would translate into Pre-Tax Profit of $4.3m, 20% down on pcp.).

While trying to increase my position in the mid 40c, it spiked 15% to 55c so that dampened my enthusiasm!

price taker, no moat. Potential for moat exists in their patents but the scale of the business works against that.

FY 2018 Looks like SDI might have finally turned the corner, this result is better than expected and if they can maintain this trajectory of earnings and cash flow we may make up lost ground! May be the time to top up a bit.

H1 19 a solid half, increased metrics across the board, Brazil remains problematic.


click here to view older commentary

Why will this business be around in 10 years? - Because people will still be going to the dentist, in fact with economic development lifting wealth across the world an ever increasing % of people start accessing dentists. As with so many of our companies, the Lindy effect plays as well - SDI has been around for nearly 50 years.

[galumay]

H1 2021 - a much better than expected result given the impact of covid, the transformation of the business away from amalgam nearly complete now.

[galumay]

SDI exceeded guidance, hitting 110% increase in NPAT, report looks strong on first pass, I like that they also compared metrics to last normalised year (2019), businesses with significant financial impact in 2020 should do this more often. A solid FY 2021

[galumay]

H1 2022, SDI showing the same results as many businesses we hold, increased revenue, big decrease in earnings, negative cash flows, all blamed on a combination of covid, supply restraints and labour inflation. I think its going to be a year or more before we see if there were actually structural issues with some of these businesses, or if they bounce back and recover.

[galumay]

SDI FY 2022 results out and my commentary for the first half is basically my thoughts on the full year! Interesting that although they increased the divvy this year its still only just over 50% payout ratio.

[galumay]

A steady half year for SDI, not much change from PRP, should see some improvement in H2 I suspect They now have a little bit of debt, so will need to watch that closely. No meaningful guidance for 2nd half

[galumay]

A fairly soft FY2023 result, debt continues to be a concern, used for the purchase of land for new site. Will need to continue watching closely. Level of conviction now low. One thing of note is the comment that as Amalgam has become increasingly a smaller part of the overall market, SDI's share has become larger as competitors simply withdraw from producing it. That's an interesting thing to consider with dying markets, can be an advantage if you have a way to leverage. I suspect because other players are much bigger businesses they have just dumped Amalgam products once they dropped to an irrelevant size in the overall business.

[galumay]

A really good half for $SDI, margins much improved. Current debt is still a concern, especially as they have to fund the expansion of their manufacturing site. There will be a return from selling existing site, but its not clear how they will finance the move.