SDI (SDI) H2 2025 earnings summary

Executive summary

• FY 2025 sales were $110.4 million, down 0.7% year-over-year, with flat overall revenue but notable gross margin improvement and continued product development progress.

• Gross margin increased by 80 basis points to 62.9%, driven by higher-margin products, regional mix, and production efficiencies.

• EBITDA declined 2.7% to $21.3 million, while normalized net profit after tax was stable at $10.5 million, up 0.1% year-over-year; reported NPAT increased 16.7% to $12.2 million.

• European and Brazilian markets showed strong growth, offsetting declines in Australia and North America.

• Operational improvements and new product launches, including Stela, contributed to performance.

Financial highlights

• Final dividend of $0.019 per share, unchanged from the prior year.

• Operating expenses increased 3.6%, reflecting a normalized inflationary environment.

• Cash increased by $2.7 million after $4.1 million in property, plant, and equipment investment, $4.4 million in product development, and $7.1 million debt reduction.

• Operating cash flow rose, supported by reduced working capital and lower borrowings.

• Debt reduced to $16.0 million; cash in bank $9.0 million; unused working capital facilities: $10 million; unused building construction facility: $23 million.

Outlook and guidance

• Expectation of continued gross margin improvement in FY 2026 as new automation becomes fully operational.

• Strategic focus remains on aesthetics and whitening product development, with plans to release 1–2 new products in the next 12 months.

• Manufacturing and logistics efficiencies from a new site are expected to help achieve sales above $200 million.

• Stella product expected to continue strong growth, with ongoing regional rollouts and increasing market acceptance.

• No specific revenue guidance for Stella, but management forecasts continued growth from the $2.5 million achieved in FY 2025.