Wednesday, 26 September 2018

Scientific Digital Imaging - building nicely!

Scientific Digital Imaging is a company I haven't mentioned before, but I bought a healthy chunk of shares back in December 2016. So far, so good and I've no intention of selling any in the near future even though my holding is showing a gain of 150%. If they continue their healthy progress then the share price has far further to run in the short, medium and long term.

Here's what they're about:-

http://scientificdigitalimaging.com/about-us/

"Scientific Digital Imaging plc (SDI) designs and manufactures scientific and technology products for use by the life science, healthcare, astronomy, consumer manufacturing and art conservation markets through the Synoptics brands (Syngene, Synbiosis and Synoptics Health), the Atik Cameras brand, the Opus Instruments brand (Osiris), Sentek, Astles Control Systems, Applied Thermal Control as well as the recently acquired, Quantum Scientific Imaging.

SDI continues to grow through its own technology advancements, as well as through pursuing strategic, complementary acquisitions."
Yesterday they released a trading update and details of a further acquisition.
In short the year ending April 2019 remains on track, and the new acquisition is small, but excellent value and should contribute positively to earnings in it's first full year as part of SDI. The acquisition has been funded from existing cash resources.
SDI has a current market cap. of around £38m, a gross margin around 66%, and in the year ending April 2018 reported an operating profit of £1.8m. SDI doesn't currently pay a dividend, but is an excellent cash generator from it's operating activities.
On a historic p/e basis (around 25) it doesn't look cheap, but with an excellent recent record for organic growth and judicious earnings enhancing acquisitions, that p/e ratio is more than justified, particularly in context of the (shall we say) more heady ratings that some growth companies are currently on.
Two Directors recently bought some shares in SDI:-
David Tilston (a non-exec) bought £4140 worth whilst Jonathan Abell (CFO) bought a more significant amount and maiden holding of 59608 shares at a cost of £25512. It's always nice to see the CFO buying a substantial amount.
I really like this company as indicated earlier, and I'll be interested to see their half-year results released 17 December 2018.
As ever, it's just my thoughts and not an attempt at a tip sheet so always DYOR.

 twitter: @michae1mouse
















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