"Revenue is a bit problematic though. Are they constrained because of difficulties increasing production which will improve with the new building, issues with sales force or management distracted with the new building."
The chart below is at stark odds with your characterisation of "problematic revenue" for SDI:
That's even when you take it at face value, without considering the composition of SDI's revenue and what those components are doing.
Specifically, if you consider that the legacy product, amalgam, which represented 47% of total group sales in 2012, has been undergoing a significant secular decline, by 4.4%pa in A$ terms, and - to account for a significant depreciation in the A$ over that period - by a very significant 7.7%pa when measured in US$ terms, from US$27m to US$10m, effectively.
As can be seen, backing out the non-Amalgam component, shows has increased by a CAGR of 9.4%pa in A$ terms and 5.7% pa in US$ terms.
So there is clearly nothing at all wrong with the organic growth of the underlying product range - 5.7% pa over more than a decade would be the envy of many a management team - but this has been masked to some extent by the decay (pun intended) in the sales of the legacy product.
(As an asides, over that 13-year review period, EBIT grew from A$3.0m (US$3.1m) to A$16m (US$10.4m), so a 14%pa CAGR in A$ terms and a 10% CAGR in US$ terms. So, pleasingly, there is also a fair degree of operating leverage - a factor of around 2.5 to 1 - inherent in the business model.)
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SDI Price at posting:
88.0¢ Sentiment: None Disclosure: Held
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