SDI Group (SDI) H2 2025 earnings summary

Executive summary

• Achieved group revenue of £66.2 million for FY2025, with a buy-and-build strategy and 17 businesses operating globally; 47% of revenue from overseas markets.

• Growth driven by strategic acquisitions, operational excellence, and focus on high-growth scientific and processing niche markets, combining organic and inorganic growth.

• Adjusted operating profit rose 4% to £10 million, while reported profit before tax declined 3.6% to £5.5 million.

• Delivered three strategic acquisitions: InspecVision, Collins Walker, and Severn Thermal Solutions.

• Business model demonstrated resilience amid challenging global conditions.

Financial highlights

• Revenue increased to £66.2 million, with inorganic growth of £2.8 million and a 1.6% organic revenue decline overall but organic growth in the second half.

• Adjusted EBIT rose to £10 million, with operating margin improving to 15%; adjusted profit before tax up 6.7% to £8.5 million.

• Gross profit margin increased by 2.8% to 64.9% (materials only); cost base rose 3%, in line with inflation.

• Operating cash conversion exceeded 100%, generating £3 million more than last year; free cash flow after leases was £7 million, up 103% year-over-year.

• Net debt ended at £13.8 million, leverage at 1.1x net debt to EBITDA, within the board's preferred range.

Outlook and guidance

• Strategy remains focused on organic growth, new product development, operational synergies, and high-quality acquisitions.

• Entering FY2026 with positive momentum, a strong order book, and robust acquisition pipeline; results expected in line with market expectations.

• Targeting circa 5% organic growth for the current financial year, with 5-7% range considered feasible.

• Guidance incorporates impacts from employer NI and minimum wage changes (£600,000 effect), and no significant impact expected from U.S. tariffs.

• Business model considered resilient against economic uncertainties.