SDI Group (SDI) H2 2024 earnings summary

Executive summary

• FY 2024 saw a challenging first half and a stronger second half, with revenue declining 2.6% to £65.8m as COVID-related sales unwound and organic revenue remained broadly flat.

• Adjusted operating profit fell 25.2% to £9.6m, and adjusted profit before tax dropped 32.8% to £8.0m, while reported profit after tax increased 9.0% to £4.3m due to lower non-recurring charges.

• Leadership transition brought a new CEO and management team, with a refined strategy focused on sustainable growth through organic and inorganic means.

• The business was resegmented into lab equipment, industrial and scientific sensors, and industrial and scientific products to drive synergies and targeted growth.

• Stronger cash generation in H2, with free cash flow of £4.2m for the year.

Financial highlights

• Revenue: £65.8m (FY23: £67.6m), with 10.7% inorganic growth from acquisitions and a GBP 8.5 million decline in COVID-related revenues.

• Adjusted diluted EPS: 5.78p (down 35.9% year-over-year), impacted by a higher tax rate (19% to 25%).

• Cash generated from operations: £9.4m (FY23: £10.9m); free cash flow: £4.2m.

• Net debt remained flat at £13.2m at year-end, with RCF extended to Nov 2026 and increased headroom.

• Gross margin stable at 63.1% (FY23: 63.3%).

Outlook and guidance

• FY24 delivered in line with revised guidance; FY25 EBIT guidance revised down from GBP 11.5m to GBP 9.7m, reflecting a conservative sales outlook and changes in key contracts.

• Long-term organic growth target is 5%-8%, supported by operational efficiency initiatives and an active M&A pipeline.

• Continued focus on operational efficiency, margin growth, and M&A.