SDI Group plc

SDI said FY26 group revenue was circa GBP 75 million, up circa 13% year over year, with organic revenue growth of 5.3% on a constant-currency basis for the year and 6.7% in the second half alone. Adjusted EBITDA improved to GBP 14.1 million, adjusted operating profit rose to GBP 11.6 million, gross profit margin increased to 66% on materials only, and like-for-like gross margin improved from 64.9% to 65.7%. Net operating margin rose from 15% to 15.5%, adjusted tax rate was unchanged at 22.7%, and cash generated by operations was GBP 10.2 million versus GBP 12.9 million last year. Year-end net debt was GBP 24 million, leverage was 1.7x net debt to EBITDA, and the company said it has GBP 25 million of committed funding through November 2028 plus a GBP 15 million accordion, with GBP 9 million still available after funding PRP. Looking ahead, management expects FY27 performance to be in line with market expectations; they also said the first half of FY27 has started strongly and is looking like a smoother split than last year.

Stephen Brown framed FY26 as a year of momentum, saying SDI moved beyond resilience to delivering growth and that the strategy is working. He emphasized the compounding buy-and-build model, operational excellence, cross-selling, ERP investment, and expanded management capacity as key pillars for future growth. On the outlook, he said the group entered FY27 with strong momentum, a robust acquisition pipeline, and confidence in sustainable long-term value creation.

Ami Sharma highlighted that the year was second-half weighted, driven by the timing of deliveries on large contracts. He noted adjusted EBITDA of GBP 14.1 million, adjusted operating profit of GBP 11.6 million, margins improving to 15.5%, and gross margin improvement to 66% on materials only, with pricing remaining a focus. On cash and debt, he said operations generated GBP 10.2 million, working capital absorbed GBP 3 million, net debt ended at GBP 24 million, leverage was 1.7x, and the bank facility was refinanced to provide GBP 25 million committed funding through November 2028 plus a GBP 15 million accordion option, of which GBP 6 million was used for PRP.

Analysts asked about the new 13% shareholder, bigger acquisition sizes, AI risk, receivable days, acquisition funding, debt levels, and how sustainable the second-half momentum is. Management said the new shareholder appears supportive and engaged, that future acquisitions are more likely to stay in the GBP 1 million to GBP 1.5 million EBIT range rather than get bigger, and that acquisitions are currently funded with debt and then paid down through cash flow. On AI, Stephen Brown said SDI’s niche manufacturing businesses are not easily replaceable by AI, but the group is actively adopting AI where it adds product or operational value. On momentum and debt, management said debtor days remained at 44, leverage is below the 2.5x limit, and FY27 should have a more even H1/H2 split than FY26, with a strong start to the year.