SDI Group PLC on Thursday said its first-half performance was hurt by slowdowns in China and Germany, with its profit falling despite increased revenue.

The stock fell by 19% to 90.00 pence in London on Thursday around midday.

The Cambridge, England-based medical technology company said pretax profit fell 50% to £2.7 million in the six months that ended on October 31, from £5.3 million the year before.

Revenue, by contrast, increased 1.6% to £32.2 million from £31.7 million, which Chair Ken Ford said was ‘despite the expiry of the very large profitable COVID contracts for cameras.’

SDI said this increase was driven by 20% acquisition growth year-on-year, with purchases LTE and FAST delivering £6.3 million in non-organic sales and trading ahead of expectations. SDI also acquired Peak Sensors in early November.

Cost of sales for the period increased 1.2% to £11.9 million, while operating expenses jumped 18% to £17.0 million from £14.4 million.

Chair Ford said the drop in SDI’s profits was partly due to destocking, ‘some of which is likely temporary’, and partly due to a slowdown in Germany and China.

SDI now expects to report adjusted pretax profit between £7.9 million and £8.4 million for the year ending on April 30, down from £11.8 million for the prior 12 months.

‘For over ten years SDI has consistently grown value by focusing on a clear and straightforward strategy,’ Ford added. ‘We acquire private companies at a significant discount...[they] are then encouraged to grow for the benefit of all stakeholders.

‘I am pleased to report that we have a number of new acquisition opportunities under review. So, despite the recent headwinds we look forward to the future with great confidence.’

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