TIDMSDI
RNS Number : 9813H
SDI Group PLC
09 December 2020
SDI Group plc
("SDI", "SDI Group", the "Company", or the "Group")
Interim results for the six months ended 31 October 2020
SDI Group plc, the AIM quoted Group focused on the design and
manufacture of scientific and technology products for use in
digital imaging and sensing and control applications, is pleased to
announce another strong set of results and solid operational
progress for the six months to end October 2020.
Financial Highlights
-- Revenue increased 23% to GBP14.13m (2019: GBP11.45m) including 7.7% organic growth
o Strong contribution from products designed into equipment used
in testing for and treating COVID-19, offset by impact of the
pandemic on the broader economy
-- Adjusted operating profit* for the period increased 52% to GBP3.20m (2019: GBP2.10m)
o Reported operating profit increased 56% to GBP2.53m (2019:
GBP1.62m)
-- Adjusted profit before tax* increased 52% to GBP3.03m (2019: GBP2.00m)
o Reported profit before tax increased 56% to GBP2.37m (2019:
GBP1.52m)
-- Adjusted diluted EPS* increased 45% to 2.47p (2019: 1.70p)
o Reported diluted EPS increased 48% to 1.95p (2019: 1.32p)
-- Cash generated from operations increased 130% to GBP4.72m (2019: GBP2.05m)
-- Net debt** at 31 October 2020 is GBP0.34m (30 April 2020: net debt of GBP4.04m)
* before reorganisation costs, acquisition costs, amortisation
of acquired intangibles and share based payment costs
** bank finance less cash and cash equivalents
Operational Highlights
-- While maintaining safe working conditions, the Group has
adapted to changing patterns of demand and has dramatically
increased capacity and output in areas where its products could
contribute to the global response to the COVID-19 pandemic
-- Post period end, acquisition of Monmouth Scientific Limited
Ken Ford, Chairman of SDI Group, said:
"We are pleased to report another strong set of financial
results. I would like to thank all our staff for their hard work
and ability to rapidly adapt to changing working environments. Our
business model has shown resilience in the period and despite the
ongoing uncertainties, the Board remains confident that SDI will
deliver a full year financial performance in line with market
expectations."
Enquiries
SDI Group plc 01223 320480
Ken Ford, Chairman
Mike Creedon, CEO
Jon Abell, CFO
www.thesdigroup.net
finnCap Ltd 020 7220 0500
Ed Frisby/Kate Bannatyne - Corporate Finance
Andrew Burdis/Sunila de Silva - ECM
JW Communications 07818 430877
Julia Wilson - Investor & Public Relations
About SDI Group plc:
SDI designs and manufactures scientific and technology products
for use in digital imaging and sensing and control applications
including life sciences, healthcare, astronomy, manufacturing,
precision optics and art conservation. SDI operates through its
company divisions: Atik Cameras, Synoptics, Graticules Optics,
Sentek, Astles Control Systems, Applied Thermal Control, MPB
Industries, Chell Instruments and Monmouth Scientific.
SDI continues to grow by developing its own technology
advancements and by improving its global sales channels, as well as
through pursuing strategic, complementary acquisitions.
www.thesdigroup.net
Chairman's statement
Despite the coronavirus pandemic, for the six month period ended
October 2020, the SDI Group plc is pleased to report revenues,
adjusted profit before tax and profits before tax, all
significantly higher than the equivalent six month period ended 31
October 2019. Although trading conditions remain challenging, the
need for digital imaging and sensing and control products in the
life science and medical industries has been robust and during this
pandemic, some of our companies have been awarded large one-off
contracts to supply equipment to help test for, or treat, COVID-19.
These contracts have ensured that the Group is trading broadly in
line with forecasts set prior to the pandemic.
During the period the Group put in place measures for a safe
working environment for our staff to continue to manufacture
products which are essential in the fight against the COVID-19
pandemic. Changes to our working practices and reorganising our
work force to keep our staff safe allowed us to keep all operation
open throughout the period.
Trading
Across the Group, orders were negatively impacted at the
beginning of the half year, in May 2020, but began to steadily
increase as the global lockdown eased and demand returned. By
September 2020 order intake had returned to near pre-pandemic
expectations with many of our businesses fulfilling order to supply
OEM products for contracts which had previously been put on hold by
our major industrial and life science equipment customers.
Revenues
Group revenues for the period ended October 2020 increased by
23% to GBP14.13m (2019: GBP11.45m) including 7.7% organic
growth.
Sales in our digital imaging reporting segment grew by 23% to
GBP6.94m (2019: GBP5.64m). The increase in turnover has come from a
one-off contract related to the supply of equipment to test for
COVID-19 awarded to Atik and from sales of systems being
manufactured at the Synoptics site. Synoptics has posted good
revenues with its Synbiosis division having a record month for
turnover in October 2020.
The sensing and control reporting segment showed overall
positive turnover growth of 24%, due to the contribution from MPB
of a one-off contract completed during the period to supply 40,000
flowmeters for production of Rapidly Manufactured Ventilator
Systems to treat COVID-19 patients, and to the revenues generated
by Chell Instruments acquired after the October 2019 period
end.
Profits
Group profit before tax increased by 56% to GBP2.37m (2019:
GBP1.52m). The increase in profitability was driven by organic
revenue growth, Chell Instruments (acquired after the period ended
October 2019) and reduced overheads. During the reporting period,
the Group has been actively reducing its overall costs, with the
largest decrease in overheads coming from reduction in salary
costs. At our UK and US-based facilities within the Group where
orders were negatively impacted by the COVID-19 pandemic we
furloughed 19% of our workforce during the period under UK and US
Government job retention schemes. Staff are returning to working at
pre-pandemic levels to fulfil orders which were largely deferred
due to the global lockdown. We continue to monitor our forecasts
against the background of second wave lockdowns and potential
Brexit disruption and any supply-chain issues these could
cause.
In addition to GAAP results, the Group also provides adjusted
results in which certain one-time and non-cash charges are
excluded, to help shareholders understand the underlying operating
performance. Adjusted operating profit increased by 52% to GBP3.20m
(2019: GBP2.10m).
Basic earnings per share increased by 48% from 1.37p to 2.03p;
diluted earnings per share also increased by 48% to 1.95p (2019:
1.32p). Adjusted diluted EPS increased by 45% to 2.47p (2019:
1.70p).
Cash flow
Cash generated from operations increased by 130% to GBP4.72m
(2019: GBP2.05m). Contributing to this was a reduction in average
debtor days in both reporting segments and the Group benefitting
from a substantial increase in advanced payments at Atik Cameras.
These have contributed to a substantial reduction in net debt in
the period. Net bank debt, or bank debt less cash, reduced to
GBP0.34m at 31 October 2020 from GBP4.04m at 30 April 2020.
Operations and COVID-19
Following UK government guidelines around social distancing and
hygiene, SDI has invested during the period to make our
manufacturing facilities COVID-19 safe. We operate manufacturing in
many sites across the UK and in addition have a manufacturing site
in Portugal. We have been able to put protocols in place to keep
each facility operational while minimizing risk to our employees.
Production staff are now back working full-time in our
manufacturing facilities, indeed, many did not stop during lockdown
and our sales and administration teams currently operate a shift
system, with time working from home and in the office. To date,
these measures, alongside our staff's diligence and hard work, has
meant we have been minimally impacted by COVID-19 infections among
our employees.
Our planned expansion of the Atik production site in Lisbon,
Portugal was successfully completed in the first quarter of 2020.
Having the site operational with twice the manufacturing capacity
has allowed Atik to safely work on a significant one-off contract
to manufacture cameras for RT-PCR testing equipment (DNA
amplification) to detect the virus which causes COVID-19. Atik
expects to complete delivery of the order by February 2021. This
date ties in with the timing of Atik's OEM contract with a major
life science equipment supplier resuming to similar levels as
previously experienced..
Acquisitions
On 2 December 2020, after the interim period end, SDI acquired
Monmouth Scientific Limited ("Monmouth Scientific") for an initial
consideration of GBP2.66m in cash and shares in SDI Group plc.
Further payments will be made up to a maximum total consideration
of GBP6.94 million depending on net assets delivered at completion
and on profits made by Monmouth Scientific in the 12 months to 31
March 2021, and these will be funded through our existing cash and
loan facilities. Monmouth Scientific specialises in the design,
manufacture and service of clean air solutions for a variety of
scientific, medical and other technical sectors, protecting the
purity of the air of both the controlled activity and of the
operator. Principal products are bespoke and modular cleanrooms,
biological safety cabinets, fume cupboards and laminar flow
cabinets. For the year ended 31 March 2020 the Company achieved
revenues of GBP6.2m, and profit before tax of GBP0.28m. The
Acquisition is in line with the Group's strategy of acquiring
complementary businesses serving scientific, medical and other
technical sectors with capable management teams in place and with
opportunities to grow further under the SDI Group structure.
Monmouth Scientific will be part of SDI Group's Sensors and Control
reporting segment. The acquisition is in line with our previously
announced strategy of organic and acquisitive growth and is
expected to be immediately earnings enhancing.
The Group continues to look for complementary acquisitions
fitting our criteria, and we would hope to identify at least one
that we can complete in 2021.
Outlook
The SDI Group's diversified portfolio of companies has meant
that we have been protected against the worst of the commercial
downturn caused by the pandemic and some companies in our Group
have secured significant one-off contracts because of it. The Board
would like to thank all our staff for their hard work and ability
to rapidly adapt to changing working environments which have all
contributed to help secure SDI's stability and future growth. Due
to the resilience of our business model to date, and despite the
potential for economic variability, influenced by possible second
or third wave global lockdowns, political conditions (including
Brexit) and currency fluctuations, the Board is confident that SDI
will deliver a full year financial performance in line with market
expectations.
Ken Ford, Chairman
8(th) December 2020
Product Portfolio
Digital Imaging
The digital imaging segment consists of three divisions, Atik
Cameras, Graticules Optics and Synoptics.
Atik Cameras
Atik Cameras offers three brands of camera:
(a) Atik - highly sensitive cameras for life science and
industrial applications, as well as deep-sky astronomy;
(b) Quantum Scientific Imaging (QSI) - high performance cameras
with applications in astronomy, life science and flat panel display
inspection; and
(c) Opus Instruments - infrared reflectography cameras for art
conservation and restoration.
Graticules Optics
Designs and manufactures precision micro pattern products on
glass, film and metal foil.
Synoptics
Offers a range of instruments under four brands:
(a) Syngene - advanced systems for documentation and analysis of
gels for molecular biologists. This brand utilises some of the
range from Atik Cameras;
(b) Synbiosis - equipment for microbiologists to automate colony
counting and zone measurement;
(c) Synoptics Health - ProReveal, to detect residual proteins on
surgical instruments; and
(d) Fistreem - water purification products and vacuum ovens.
Sensors and Control
The sensors and control segment currently encompass six
divisions: Applied Thermal Control and Thermal Exchange, Astles
Control Systems, Chell Instruments, MPB Industries, Sentek and
Monmouth Scientific,
Applied Thermal Control and Thermal Exchange
Applied Thermal Control and Thermal Exchange have been merged
into a single division and manufacture and supply chillers, coolers
and heat exchangers used within industrial, medical and scientific
markets.
Astles Control Systems
Astles is a supplier of chemical dosing and control systems to
manufacturing customers worldwide.
Chell Instruments
Specialises in the design, manufacture and calibration of
pressure, vacuum, and gas flow measurement instruments for a
variety of sectors including aerospace, vehicle aerodynamics, gas
and steam turbine testing and power generation industries.
MPB Industries
Designs and manufactures flowmeters and other equipment for
measuring liquids and gases for industrial and scientific
applications.
Sentek
Sentek manufactures and markets off-the-shelf and custom-made,
reusable and single-use electrochemical sensors for use in
laboratory analysis, food, beverage, pharmaceutical and personal
care manufacturing, as well as the leisure industry.
Monmouth Scientific
Acquired on 2 December 2020. The company designs, manufactures
and services clean air solutions specialising in cleanrooms,
biological safety fume cupboards and laminar flow cabinets
Consolidated income statement
Unaudited for the six months ended 31 October 2020
6 months 6 months 12 months
to to to
31 October 31 October 30 April
2020 2019 2020
Note Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------------------------------- -------- ------------ -------- ------------ --------- ----------
Revenue 14,126 11,445 24,498
--------- ----------
Costs of sales (4,724) (3,680) (7,899)
------------------------------- -------- ------------ -------- ------------ --------- ----------
Gross Profit 9,402 7,765 16,599
--------- ----------
Other operating income 7 - 19
--------- ----------
Operating expenses (6,874) (6,144) (13,107)
--------- ----------
Analysed as:
--------- ----------
Reorganisation costs (129) (59) (110)
-------- -------- --------- ----------
Share based payments (152) (140) (276)
-------- -------- --------- ----------
Acquisition and fundraising
costs - - (58)
-------- -------- --------- ----------
Amortisation of acquired
intangible assets (379) (282) (647)
-------- -------- --------- ----------
Expected credit loss - - (165)
-------- -------- --------- ----------
Other operating costs (6,214) (5,663) (11,851)
-------- -------- --------- ----------
Operating expenses (6,874) (6,144) (13,107)
------------------------------- -------- ------------ -------- ------------ --------- ----------
Operating profit 2,535 1,621 3,511
--------- ----------
Net financing expense (164) (104) (254)
------------------------------- -------- ------------ -------- ------------ --------- ----------
Profit before taxation 2,371 1,517 3,257
--------- ----------
Income tax charge (393) (189) (666)
------------------------------- -------- ------------ -------- ------------ --------- ----------
Profit for the period 1,978 1,328 2,591
------------------------------- -------- ------------ -------- ------------ --------- ----------
Earnings per share 5
--------- ----------
Basic earnings per
share 2.03p 1.37p 2.66p
--------- ----------
Diluted earnings per
share 1.95p 1.32p 2.56p
------------------------------- -------- ------------ -------- ------------ --------- ----------
Consolidated statement of comprehensive income
Unaudited for the six months ended 31 October 2020
6 months to 6 months to 12 months to
31 October 31 October 30 April
2020 2019 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
---------------------------- ------------ ------------ -------------
Profit for the period 1,978 1,328 2,591
-------------
Other comprehensive income
-------------
Exchange differences
on translating foreign
operations 48 26 41
----------------------------- ------------ ------------ -------------
Total comprehensive profit
for the period 2,026 1,354 2,632
----------------------------- ------------ ------------ -------------
Consolidated balance sheet
Unaudited at 31 October 2020
31 October 31 October 30 April
2020 2019 2020
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
------------------------------- ----- ----------- ----------- ---------
Assets
---------
Non-current assets
---------
Intangible assets 21,110 16,900 21,650
Property, plant and equipment 3,584 3,281 3,901
Deferred tax asset 219 182 246
------------------------------- ----- ----------- ----------- ---------
24,913 20,363 25,797
Current assets
Inventories 4,087 2,785 3,728
Trade and other receivables 4,456 3,425 3,617
Cash and cash equivalents 3,436 2,727 5,290
------------------------------- ----- ----------- ----------- ---------
11,979 8,937 12,635
------------------------------- ----- ----------- ----------- ---------
Total assets 36,892 29,300 38,432
------------------------------- ----- ----------- ----------- ---------
Liabilities
---------
Non-current liabilities
---------
Borrowings 6 2,400 3,300 7,962
---------
Lease liabilities 6 2,211 2,058 2,414
---------
Deferred tax liability 2,037 1,356 2,134
------------------------------- ----- ----------- ----------- ---------
6,648 6,714 12,510
------------------------------- ----- ----------- ----------- ---------
Current liabilities
---------
Trade and other payables 5,412 2,927 3,350
---------
Provisions for warranty 85 16 85
---------
Borrowings 6 1,371 - 1,371
---------
Lease liabilities 6 562 449 539
---------
Current tax payable 510 597 513
------------------------------- ----- ----------- ----------- ---------
7,940 3,989 5,858
---------
Total liabilities 14,588 10,703 18,368
------------------------------- ----- ----------- ----------- ---------
Net assets 22,304 18,597 20,064
------------------------------- ----- ----------- ----------- ---------
Equity
---------
Share capital 978 972 975
Merger reserve 3,030 3,030 3,030
Share premium account 8,805 8,696 8,746
Share-based payment reserve 619 424 467
Foreign exchange reserve 229 166 181
Retained earnings 8,643 5,309 6,665
------------------------------- ----- ----------- ----------- ---------
Total equity 22,304 18,597 20,064
------------------------------- ----- ----------- ----------- ---------
Consolidated statement of cash flows
Unaudited for the six months ended 31 October 2020
6 months to 6 months 12 months
31 October to to
2020 31 October 30 April
Unaudited 2019 2020
GBP'000 Unaudited Audited
GBP'000 GBP'000
---------------------------------------- ------------ ------------ ----------
Operating activities
----------
Profit for the period 1,978 1,328 2,591
Depreciation, amortisation and
impairment 1,096 919 2,020
Finance costs and income 164 104 254
Impairment of intangibles 18 - 22
Changes in provisions - 5 74
Taxation expense in the income
statement 393 189 666
Employee share-based payments 152 140 276
---------------------------------------- ------------ ------------ ----------
Operating cash flow before movement
in working capital 3,801 2,685 5,903
Changes in inventories (400) (201) (539)
Changes in trade and other receivables (745) (94) 726
Changes in trade and other payables 2,059 (339) (921)
---------------------------------------- ------------ ------------ ----------
Cash generated from operations 4,715 2,051 5,169
Interest paid (164) (104) (253)
Income taxes paid (493) (312) (786)
---------------------------------------- ------------ ------------ ----------
Cash generated from operating
activities 4,058 1,635 4,130
Cash flows from investing activities
Capital expenditure on fixed
assets (109) (226) (506)
Sale of property plant and equipment - 3 -
Expenditure on development and
other intangibles (116) (257) (582)
Acquisition of subsidiaries,
net of cash - - (5,182)
Net cash used in investing activities (225) (480) (6,270)
Cash flows from financing activities
Payments of lease liabilities (224) (225) (511)
Foreign exchange movements 107 - -
Proceeds from bank borrowings - - 6,496
Repayment of borrowings (5,562) (700) (1,143)
Issues of shares - - 80
---------------------------------------- ------------ ------------ ----------
Net cash (used in)/from financing
activities (5,679) (925) 4,922
---------------------------------------- ------------ ------------ ----------
Net (decrease)/increase in cash
and cash equivalents (1,846) 230 2,782
Cash and cash equivalents, beginning
of period 5,290 2,494 2,494
Foreign currency movements on
cash balances (8) 3 14
---------------------------------------- ------------ ------------ ----------
Cash and cash equivalents, end
of period 3,436 2,727 5,290
---------------------------------------- ------------ ------------ ----------
Consolidated statement of changes in equity
Unaudited for the six months ended 31 October 2020
6 months to 31 October Own shares Share-based
2020 - unaudited Share Merger Foreign Share held by payment Retained
capital reserve exchange premium EBT reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
Balance at 1 May 2020 975 3,030 181 8,746 - 467 6,665 20,064
Shares issued 3 - - 59 - - - 62
Share based payments - - - - - 152 - 152
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
Transactions with
owners 3 - - 59 - 152 - 214
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
Profit for the period - - - - - - 1,978 1,978
Foreign exchange on
consolidation of
subsidiaries - - 48 - - - - 48
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
Total comprehensive
income for the period - - 48 - - - 1,978 2,026
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
Balance at 31 October
2020 978 3,030 229 8,805 - 619 8,643 22,304
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
6 months to 31 October Own shares Share-based
2019 - unaudited Share Merger Foreign Share held by payment Retained
capital reserve exchange premium EBT reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
Balance at 1 May 2019 972 3,030 140 8,696 (17) 284 3,981 17,086
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
Share based payments - - - - - 140 - 140
Release of shares
on option exercise - - - - 17 - - 17
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
Transactions with
owners - - - - 17 140 - 157
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
Profit for the period - - - - - - 1,328 1,328
Foreign exchange on
consolidation of
subsidiaries - - 26 - - - - 26
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
Total comprehensive
income for the period - - 26 - - - 1,328 1,354
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
Balance at 31 October
2019 972 3,030 166 8,696 - 424 5,309 18,597
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
12 months to 30 April Own shares Share-based
2020 - audited Share Merger Foreign Share held by payment Retained
capital reserve exchange premium EBT reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
Balance at 30 April
2019 972 3,030 140 8,696 (17) 284 3,981 17,086
Restatement for IFRS16 - - - - - - - -
("Leases")
Adjusted balances
at 30 April 2019 972 3,030 140 8,696 (17) 284 3,981 17,086
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
Shares issued 3 - - 50 17 - - 70
Share-based payments
transfer - - - - - (93) 93 -
Share based payments - - - - - 276 - 276
Transactions with
owners 3 - - 50 17 183 93 346
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
Profit for the year - - - - - - 2,591 2,591
---------
Foreign exchange on
consolidation of
subsidiaries - - 41 - - - - 41
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
Total comprehensive
income - - 41 - - - 2,591 2,632
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
Balance at 30 April
2020 975 3,030 181 8,746 - 467 6,665 20,064
----------------------- --------- --------- ---------- --------- ----------- ------------ ---------- ---------
Notes to the interim financial statements
1. General information and basis of preparation
SDI Group plc (formerly known as Scientific Digital Imaging plc
(the "Company")), a public limited company, is the Group's ultimate
parent. It is registered in England and Wales. The consolidated
interim financial statements of the Company for the period ended 31
October 2020 comprise the Company and its subsidiaries (together
referred to as the "Group").
The unaudited consolidated interim financial statements are for
the six months ended 31 October 2020. These interim financial
statements have been prepared using the recognition and measurement
principles of International Accounting Standards, International
Financial Reporting Standards and Interpretations adopted for use
in the European Union (collectively EU IFRS). The consolidated
interim financial information has been prepared under the
historical cost convention, as modified by the recognition of
certain financial instruments at fair value. The consolidated
interim financial statements are presented in British pounds (GBP),
which is also the functional currency of the ultimate parent
company.
The consolidated interim financial information was approved by
the Board of Directors on 8 December 2020
The financial information set out in this interim report does
not constitute statutory accounts as defined in section 435 of the
Companies Act 2006. The figures for the year ended 30 April 2020
have been extracted from the statutory financial statements of SDI
Group plc which have been filed with the Registrar of Companies.
The auditor's report on those financial statements was unqualified
and did not contain a statement under section 498(2) or 498(3) of
the Companies Act 2006. The financial information for the six
months ended 31 October 2020 and for the six months ended 31
October 2019 has not been audited.
2. Principal accounting policies
The principal accounting policies adopted in the preparation of
the condensed consolidated interim information are consistent with
those followed in the preparation of the Group's financial
statements for the year ended 30 April 2020.
The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of these
interim financial statements.
3. Alternative Performance Measures
The Group uses Adjusted Operating Profit, Adjusted Profit Before
Tax, Adjusted EPS and Net Operating Assets as supplemental measures
of the Group's profitability and investment in business-related
assets, in addition to measures defined under IFRS. The Group
considers these useful due to the exclusion of specific items that
are considered to hinder comparison of underlying profitability and
investments of the Group's segments and businesses, and is aware
that shareholders use these measures to evaluate performance over
time. The adjusting items for the alternative measures of profit
are either recurring but non-cash charges (share-based payments and
amortisation of acquired intangible assets) or exceptional items
(reorganisation costs and acquisition and fundraising costs).
The following table is included to define the term Adjusted
Operating Profit:
6 months 6 months 12 months
to to to
31 October 31 October 30 April
2020 2019 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------------- ------------ ------------ ----------
Operating Profit (as reported) 2,535 1,621 3,511
----------
Adjusting items (all costs):
----------
Non-underlying items
----------
Share based payments 152 140 276
----------
Amortisation of acquired intangible
assets 379 282 647
----------
Exceptional items
----------
Reorganisation costs 129 59 110
----------
Acquisition and fundraising costs - - 58
------------------------------------- ------------ ------------ ----------
Total adjusting items within
Operating Profit 660 481 1,091
----------
Adjusted Operating Profit 3,195 2,102 4,602
------------------------------------- ------------ ------------ ----------
Adjusted Profit Before Tax is defined as follows:
6 months 6 months 12 months
to to to
31 October 31 October 30 April
2020 2019 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
--------------------------------- ------------ ------------ ----------
Profit before tax (as reported) 2,371 1,517 3,257
------------
Adjusting items (as above) 660 481 1,091
------------
Adjusted Profit Before Tax 3,031 1,998 4,348
--------------------------------- ------------ ------------ ----------
3. Alternative Performance Measures (continued)
Adjusted EPS is defined as follows:
6 months 6 months 12 months
to to to
31 October 31 October 30 April
2020 2019 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------------- ------------ ------------ ------------
Profit for the period (as reported) 1,978 1,328 2,591
------------
Adjusting items (as above) 660 481 1,091
------------
Less: taxation on adjusting
items calculated at the UK
statutory rate (125) (91) (207)
------------ ------------ ------------
Adjusted net profit 2,513 1,718 3,475
------------
Divided by diluted weighted
average number of shares in
issue (Note 5) 101,611,426 100,846,707 101,206,148
------------
Adjusted diluted EPS 2.47p 1.70p 3.43p
------------------------------------- ------------ ------------ ------------
Net Operating Assets is defined as follows:
31 October 31 October 30 April
2020 2019 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------------------- ----------- ----------- ---------
Net assets 22,304 18,597 20,064
---------
Deferred tax asset 219 182 246
---------
Corporation tax asset 79 - 52
---------
Cash and cash equivalents 3,436 2,727 5,290
---------
Borrowings (current and non-current) (6,544) (5,807) (12,286)
---------
Deferred tax liability (2,037) (1,356) (2,134)
---------
Current tax payable (510) (597) (513)
-------------------------------------- ----------- ----------- ---------
Total adjusting items within
Net assets (5,357) (4,851) (9,345)
---------
Net Operating Assets 27,661 23,448 29,409
-------------------------------------- ----------- ----------- ---------
4. Segmental analysis
6 months 6 months 12 months
to to to
31 October 31 October 30 April
2020 2019 2020
Unaudited Unaudited Audited
GBP'000
GBP'000 GBP'000
------------------------------------- ------------ ------------ ----------
Revenues
----------
Digital Imaging 6,940 5,639 11,050
----------
Sensors & Control 7,186 5,806 13,448
----------
Other - - -
------------------------------------- ------------ ------------ ----------
Group 14,126 11,445 24,498
----------
Adjusted Operating Profit
----------
Digital Imaging 2,075 1,210 2,382
----------
Sensors & Control 1,569 1,361 3,028
----------
Other (449) (469) (808)
------------------------------------- ------------ ------------ ----------
Group 3,195 2,102 4,602
----------
Amortisation of acquired intangible
assets
----------
Digital Imaging (92) (90) (182)
----------
Sensors & Control (291) (192) (465)
----------
Other - - -
------------------------------------- ------------ ------------ ----------
Group (383) (282) (647)
------------------------------------- ------------ ------------ ----------
A reconciliation of Adjusted Operating Profit to Operating
Profit for the Group is provided in Note 3.
Analysis of amortisation of acquired intangible assets has been
included separately as the Group considers it to be an important
component of profit which is directly attributable to the reported
segments.
The Other category includes costs which cannot be allocated to
the other segments, and consists principally of Group HQ costs.
4. Segmental analysis (continued)
31 October 31 October 30 April
2020 2019 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------------- ----------- ----------- ---------
Operating assets excluding acquired
intangible assets
---------
Digital Imaging 6,942 6,508 6,281
---------
Sensors & Control 5,825 4,110 5,993
---------
Other 331 53 120
------------------------------------- ----------- ----------- ---------
Group 13,098 10,671 12,394
---------
Acquired intangible assets
---------
Digital Imaging 5,282 5,461 5,370
---------
Sensors & Control 14,777 10,260 15,068
---------
Other - - -
------------------------------------- ----------- ----------- ---------
Group 20,059 15,721 20,438
---------
Liabilities
---------
Digital Imaging (3,051) (1,185) (1,190)
---------
Sensors & Control (2,200) (1,514) (2,087)
---------
Other (245) (245) (158)
------------------------------------- ----------- ----------- ---------
Group (5,496) (2,944) (3,435)
---------
Net Operating Assets
---------
Digital Imaging 9,173 10,784 10,550
---------
Sensors & Control 18,402 12,856 19,042
---------
Other 86 (192) (183)
------------------------------------- ----------- ----------- ---------
Group 27,661 23,448 29,409
------------------------------------- ----------- ----------- ---------
A reconciliation of Net Operating Assets to net assets for the
Group is provided in Note 3.
5. Earnings per share
The calculation of the basic earnings per share is based on the
profits attributable to the shareholders of SDI Group plc divided
by the weighted average number of shares in issue during the
period. All profit per share calculations relate to continuing
operations of the Group.
Profit
attributable Weighted Earnings
to average per share
shareholders number of amount in
GBP'000 shares pence
----------------------------- -------------- ------------ -----------
Basic earnings per share:
-----------
Period ended 31 October
2020 1,978 97,582,755 2.03
-----------
Period ended 31 October
2019 1,328 97,203,951 1.37
-----------
Year ended 30 April 2020 2,591 97,277,721 2.66
-----------
Dilutive effect of share
options :
-----------
Period ended 31 October
2020 4,028,671
-----------
Period ended 31 October
2019 3,642,756
-----------
Year ended 30 April 2020 3,928,426
-----------
Diluted earnings per share:
-----------
Period ended 31 October
2020 1,978 101,611,426 1.95
-----------
Period ended 31 October
2019 1,328 100,846,707 1.32
-----------
Year ended 30 April 2020 2,591 101,206,147 2.56
----------------------------- -------------- ------------ -----------
6. Borrowings
31 October 31 October 30 April
2020 2019 2020
GBP'000 GBP'000 GBP'000
-------------------------------- ----------- ----------- ---------
Within one year:
Bank finance 1,371 - 1,371
Lease liabilities 562 449 539
1,933 449 1,910
-------------------------------- ----------- ----------- ---------
After one year and within five
years:
Bank finance 2,400 3,300 7,962
Lease liabilities 1,297 1,103 2,414
-------------------------------- ----------- ----------- ---------
3,697 4,403 10,376
-------------------------------- ----------- ----------- ---------
After more than five years:
-------------------------------- ----------- ----------- ---------
Lease liabilities 914 955 -
-------------------------------- ----------- ----------- ---------
Total borrowings 6,544 5,807 12,286
-------------------------------- ----------- ----------- ---------
Bank finance relates to amounts drawn down under the Group's
bank facility with HSBC Bank plc, which is secured against all
assets of the Group. The facility consists of a revolving facility
of GBP5m and an amortising facility which reduces in quarterly
instalments from GBP4.8m when it was taken out in November 2019 to
zero by April 2023, when the current agreement expires. The
facility has covenants relating to leverage (net debt to EBITDA),
interest coverage, and cashflow to debt service.
7 . Post Balance Sheet Event
On 2 December 2020 the Group completed the acquisition of
Monmouth Scientific Limited ("Monmouth Scientific") for an initial
consideration of GBP2.66m in cash and shares in SDI Group plc plus
further payments up to a maximum total consideration of GBP6.94
million depending on net assets delivered at completion and on
profits made by Monmouth Scientific in the 12 months to 31 March
2021. Monmouth Scientific specialises in providing controlled clean
air environments for scientific, medical and other technical
applications. For the year ended 31 March 2020, Monmouth Scientific
achieved revenue of GBP6.2m and profit before tax of GBP0.28m. The
acquisition is expected to be immediately earnings enhancing.
SDl Group plc
Beacon House
Nuffield Road
Cambridge
CB4 1TF
UK
Telephone: +44 (0)1223 727144
Fax: +44 (0)1223 727101
Email: info@thesdigroup.net
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END
IR UPGMUPUPUGMR
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