SDI (ASX: SDI) – a global leading dental technology company

 

COMPANY SCOREBOARD

Pro PlusProCon PlusCon
  • Profitable business in a safe industry
 
  • Family business with weak corporate government and inexperienced management
  • Untrustworthy accounts (i.e. inventory)
  • Bad looking chart

ABOUT COMPANY

SDI (SDI) (https://www.sdi.com.au) manufactures and distributes dental restorative materials, whitening systems, and other dental materials. The company exports to over 100 countries globally and has approximately 1.7% of the market as at 2021.

CAPITAL STRUCTURE

BUSINESS

Below is the company’s past five years performance:

The company’s sale growth might have peaked in FY24. The inventory increased to $30m! The company had to purchased a new $19m site for storage with a construction and refurnishing cost of $26m and additional equipment of $15m, all from borrowing. That’s $60m investment in warehouse. The benefit won’t be seen until 2028.

The company is likely to generate around $8m net profit at the best for the next year or two, and if they pay 50% in dividend, the share price shouldn’t be more than 80c in order to earn a 5% return pre-franking credit.

SUMMARY

The company’s share price failed to stand above $1 three times in a roll in 2016, 2019, and 2021.