Their result was "saved" a bit by the strong revenue figure achieved for the half. The gross profit was then reduced by about $2m due to extra freight costs and a further $2m due to the decreased margin brought about by the sales mix Total operating expenses increased substantially too. So it wasn't a great six months but the key is the next few years which raises the questions:
are the revenue numbers achieved in the six months indicative of ensuing months or was some of that revenue a result of catching up on delays during the covid period
how long will it take for freight costs to normalize, if indeed they ever will
will the sales mix achieved in this six months remain a constant causing GP margins to continue below 60%
These guys have a history of being bumped around a bit but adjusting to the conditions over time. I think the business is really well managed but a review of past performance suggests it's not actually a growth stock so I need to think some more.
SDI Price at posting:
91.5¢ Sentiment: Hold Disclosure: Held
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