SDI Group ends year ahead of market expectations

Digital imaging and sensing technology company SDI Group said in an update on Friday that, subject to its final accounts and audit, it anticipated revenues and profits for the financial year just ended to “materially exceed” current market expectations.

The AIM-traded firm said sales for the 12 months ended 30 April were expected to be around £49m, up from £35.1m year-on-year.

It said it expected organic sales growth to be at least 20%, further building on the prior year's 19% organic growth.

The company also noted additional sales contributions from the acquisitions of Monmouth Scientific in December 2020, Uniform Engineering in February 2021, Scientific Vacuum Systems in January this year, and Safelab Systems in March.

Adjusted profit before tax was expected to be at least £10.5m, up from £7.4m, with the firm also anticipating “very strong” operational cash flows, “significantly ahead” of market forecasts.

Looking ahead, the board said the last year presented “unprecedented” operational challenges, with an intermittent Covid-19 recovery, the after-effects of Brexit and a war in Ukraine creating uncertainty and generating significant supply chain difficulties and unwelcome inflationary cost pressure.

The group said its “federated” structure and its staff had allowed it to respond to the challenge with record output and improved profitability.

It said its Atik Camera business was still seeing strong demand from PCR original equipment manufacturers (OEMs).

The company also said it had “no material direct exposure” to Ukraine or Russia.

Having continued to invest in its current businesses and in acquiring complementary businesses, it said it expected the 2023 financial year to be its best yet, also ahead of current market expectations.

“We have executed again on all facets of our buy and build strategy, delivering record performance in the 2022 financial year, and setting up what looks like another record year in 2023,” said chairman Ken Ford.

At 1248 BST, shares in SDI Group were up 15.23% at 174p.

Reporting by Josh White at Sharecast.com.