News blog
SDI Group
- BY: Andrew Hore |
- POSTED: 28/07/2008 |
SDI Group says revenues were below expectations in the six months to May 2008.
SDI is a systems integrator for materials handling systems for distribution centres. This is capital expenditure for its custoemrs so it is the type of spending that can sometimes be put off. It can take six-12 months to secure an order but it appears that timescale may be lengthening. Two orders were postponed during the period. There is still a strong pipeline of potential work but it is difficult to assess how fast this will come through into firm orders.
The US is struggling at the moment and it had one job which proved problematical. In contrast, Europe is continuing to prosper and accounted for the majority of revenues in the first half.
SDI lost £2.62m on revenues of £23m in the six months to May 2008.
SDI only came into existence when US business SDI Industries Inc and UK associate SDIGreenstone merged to form SDI Group prior to the Aim flotation in July 2007. That means that there are no interim comparisons. Pro forma figures for the year to November 2007 showed turnover 9% higher at £57.5m and profits two-thirds higher at £7.7m.
A new service business has been set up in the US. This is a particularly strong area for the company in the UK. Maintenance income accounted for 10% of 2006-07 turnover and it increased to 13% at the half way stage.
There was a sharp cash outflow in the period with cash falling from £10.1m to £4.4m over the six month period. That was mainly down to the timing of payments for contracts which are still ongoing. Revenues are recognised on the basis of the percentage of the contract completed but payments will be slower. The cash position improved to £5.9m by the end of June.
In April, SDI acquired PEP for €2.76m, which took it into the German market. Management is looking for other bolt-on acquisitions that can be paid for with cash and earn-outs.
SDI is changing its year end from November to March so the next full financial period will be for the 16 months to March 2009. November was originally chosen as the year end because it was the US company’s year end. A 0.9p a share dividend was paid last year but no decision has been made on whether to pay a dividend for the 16 month period.
The shares have been heading downwards since the full year results. They fell a further 0.5p to 12p, valuing the company at £13.1m. SDI joined Aim on 2 July 2007 via a placing at 49p a share.
© 2024 Aim Micro. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
- Browse by issue
- All issues
- Popular tags
- All tags
- AIM Micro feeds
Keep up to date with articles published at AIMMicro.com. Subscribe to AIM Micro RSS Feeds
|