The Board of Scientific Digital Imaging plc, the AIM quoted group focused on scientific and technology products for use in applications including life sciences, healthcare, astronomy, consumer manufacturing and art conservation, is pleased to announce its unaudited interim results for the six months ended 31 October 2015.
Highlights
Revenue increased by 15% to £3,671,000 (2014: £3,188,000)
Adjusted operating profit* was £189,000 (2014: loss £20,000)
Operating profit was £29,000 (2014: loss £207,000)
Gross margin increased to 58.0% (2014: 57.6%)
New acquisition Sentek Limited (“Sentek”) acquired on 28 October 2015. SDI paid £2,000,000. The acquisition was funded initially using existing cash resources and a debt facility, with the majority of the debt subsequently repaid by raising £2,500,000 in equity after the period end
Post period event – settlement following a general meeting of the successful equity fundraising of £2,500,000 (before expenses) to repay debt from acquiring Sentek, with the balance of net proceeds to be reinvested in the business
Artemis CCD continued to report increased levels of sales and profitability
* Before transaction costs, reorganisation costs and share based payments
Ken Ford, Chairman of SDI, commented:
“The Board anticipates that the recent acquisition of Sentek will be earnings enhancing in the first full year of ownership. The Board expects SDI to continue to make good progress over the remainder of the financial year as we continue to pursue our strategy of organic and acquisitive growth.”
Enquiries
Scientific Digital Imaging plc  nbsp; 01223 727144
Ken Ford, Chairman
Mike Creedon, CEO
www.scientificdigitalimaging.com
finnCap Ltd 020 7220 0500
Ed Frisby/Simon Hicks – Corporate Finance
Mia Gardner– Corporate Broking
JW Communications 07818 430877
Julia Wilson - Investor & Public Relations
Copies of the interim report are being sent to shareholders and can also be viewed on the Company’s website: www.scientificdigitalimaging.com
About SDI:
Scientific Digital Imaging plc (“SDI”) designs and manufactures scientific and technology products for use in applications including life sciences, healthcare, astronomy, consumer manufacturing and art conservation. SDI plans to continue to grow through its own technology advancements as well as strategic, complementary acquisitions.
IMPORTANT NOTICES
No statement in this announcement is intended to be a profit forecast or estimate and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.
Interim 2015 highlights
Revenue increased by 15% to £3,671,000 (2014: £3,188,000)
Adjusted operating profit* was £189,000 (2014: loss £20,000)
Operating profit was £29,000 (2014: loss £207,000)
Gross margin increased to 58.0% (2014: 57.6%)
New acquisition Sentek Limited (“Sentek”) acquired on 28 October 2015. SDI paid £2,000,000. The acquisition was funded initially using existing cash resources and a debt facility, with the majority of the debt subsequently repaid by raising £2,500,000 in equity after the period end
Post period event – settlement following a general meeting of the successful equity fundraising of £2,500,000 (before expenses) to repay debt from acquiring Sentek, with the balance of net proceeds to be reinvested in the business
Artemis CCD continued to report increased levels of sales and profitability
* Before transaction costs, reorganisation costs and share based payments
Synoptics
Synoptics designs and manufactures special-purpose, innovative instruments and systems for use mainly in the life science industry. The Company exploits digital imaging technologies for a range of disciplines and offers its products through four brands:
Syngene produces equipment for life scientists to image and analyse electrophoresis gels for DNA and protein analysis
Synbiosis produces equipment for microbiologists to automate microbial colony counting
Syncroscopy provides systems that apply digital imaging techniques to microscopy applications, such as life and material sciences
Synoptics Health focuses on imaging techniques within the hospital and clinical environments using the ProReveal system.
Artemis CCD
Artemis CCD designs and manufactures high sensitivity cameras for deep sky astronomical and life science imaging under the Atik brand.
Opus Instruments
Opus designs and manufactures an infrared camera, Osiris, which is used to examine works of art using infrared camera technology.
Sentek
Sentek manufactures and sells both reusable and single-use electrodes for the measurement of pH and conductivity of aqueous solutions. Applications range from laboratory use to manufacture of foods, beverages, pharmaceuticals and personal care products.
Chairman’s statement
OVERVIEW
In the six-month period ended 31 October 2015, SDI acquired Sentek. The acquisition was completed on 28 October 2015 and therefore has very limited effect on the six month period results. Going forward, we expect that the acquisition of Sentek will be earnings enhancing in the first full year of ownership.
SDI revenue was £3,671,000 in the six months to 31 October 2015 (increased by £483,000 relative to revenue of £3,188,000 for the six months to 31 October 2014). The increase in revenue arose from Synoptics and Atik over the six-month period.
The established Atik brand continued to report increased sales revenue and profitability.
Basic and fully diluted earnings per share were both 0.04p (2014: basic and fully diluted loss 0.82p).
The Group’s cash position reduced by £619,000 to £257,000 over the period, due to the utilisation of internal funds to contribute to the purchase of Sentek. After the period end, SDI raised £2,500,000 before expenses through the issue of equity and borrowed £500,000 from its bank, used to repay short-term debt funding the purchase of Sentek with the remainder increasing the Group’s working capital reserves.
PRODUCT PORTFOLIO
Syngene remains the largest of the Synoptics brands. It has been continuing to improve its software and hardware, for a number of its products. We believe that these improvements will be attractive to our current and potential customers.
During the period, Synbiosis released a new version of ProtoCOL 3, including antibiotic susceptibility testing software. The new software is stimulating additional interest in ProtoCOL 3; Synbiosis believes that this will translate into sales growth in 2016. The division is currently developing a new system, ChromaZona, for antibiotic resistance testing in clinical laboratories. It is currently undergoing clinical certification as it will be used for clinical diagnostics and we can then seek to exploit new large and growing markets including hospital laboratories.
Synoptics Health has continued to sell ProReveal, a test to detect proteins on surgical instruments. The absence of an official limit of acceptable protein contamination on re-usable surgical instruments was previously a significant barrier to the adoption by the NHS of ProReveal. In May 2015, the UK Department of Health (DoH) published new guidelines that define a limit for acceptable protein contamination on re-usable surgical instruments (http://www.gov.uk/government/publicatons/ guidance-from-the-acdp-tse-risk-management-subgroup-formerly-tse-working-group). We expect the publication of these guidelines to accelerate adoption of ProReveal for this use. ProReveal is the only available CE-marked instrument capable of determining quantitatively the level of protein contamination on instruments. Furthermore, it has been shown to be sensitive below 50ng of protein and thus fulfils the DoH requirements for greater sensitivity for neurosurgical instruments.
Since acquiring Opus Instruments in 2014, Osiris camera sales have remained steady. The Board believes that it will continue to make a positive contribution to SDI’s trading in 2016.
In the first half of the financial year, Atik reported growth in sales and profitability. Atik constantly analyses the market and seeks to develop cutting edge products to attract a wider customer base. The recently introduced Infinity camera marks a departure from its existing astro-imaging products which are intended to collect data that is subsequently processed to a finished picture. The Infinity is used with a telescope to provide astronomers with near real time visualisation of faint deep sky objects such as galaxies and nebulas. The camera is proving particularly popular with astronomers who had been reluctant to try astro-imaging due to the steep learning curve, as well as those involved with outreach projects. We believe that the Infinity camera will help introduce the Atik brand to a new group of astronomers and provide an easy entry point to the rewarding astro-imaging hobby market.
SDI’s latest acquisition Sentek differs in its business profile from SDI’s other established divisions. Sentek makes and sells consumables rather than equipment and software, so it has a stream of repeat business. Sentek’s products are electrodes that have a working life of only six to twelve months and need to be replaced regularly. Sentek also produces a single-use electrode for bioprocessing applications, a fast-growing area in pharmaceutical and biotech companies. The business has been profitable since incorporation in 1991; it has had a revenue CAGR* over the past five years of 9% and a five-year profit before tax CAGR of 33%.
ACQUISITIONS
SDI is actively seeking further profitable scientific and technology based companies to continue its buy and build strategy.
OUTLOOK
The Board anticipates that the recent acquisition of Sentek will be earnings enhancing in the first full year of ownership. The Board expects SDI to continue to make good progress over the remainder of the financial year as we continue to pursue our strategy of organic and acquisitive growth.
Ken Ford, Chairman
8 January 2016
* CAGR = compound annual growth rate
For more information:
scientificdigitalimaging.com
Editor’s Details
Julia Wilson
JW Communications
scientificdigitalimaging.com
0781 8430877
juliawilsonuk@gmail.com
