SDI delivers a 47% profit increase

Melbourne-based SDI Limited (ASX:SDI) has announced another record profit for the financial year ended 30 June 2004.

Net profit after tax increased to $8.03M, an increase of 47.3% on the prior year.

Earnings per share increased by 11 cents (or 47.2%) to 34.3 cents. Earnings before Interest and Tax (EBIT) were $11.3M, a 40.0% increase on the prior year.

Sales increased by 15.7% to $42.5M and, after excluding currency fluctuations, sales increased by 25.8%. This increase was due to a combination of organic growth plus a contribution from new products, in particular the "Radii" cordless LED curing light.

Other new products including Rok (posterior alternative for amalgam), Ice (anterior and posterior nano technology composite restorative) and Riva SC (glass ionomer cement) are expected to contribute solidly in 2004/05 year.

"This was a good all-round result for our Company and we have yet again delivered a record profit and met all our targets," Managing Director, Jeffery Cheetham said. "All the new products are now being actively promoted to our international markets and we anticipate their strong contributions in the current financial year and beyond. Market expansion was particularly strong in the Company's European market with a 37% growth when expressed in local currency. This was followed by 12% growth in North America and 24% growth in exports from Australia."

During the year substantial manufacturing space (approximately one acre of land and factories) was purchased to facilitate the growth and the existing production facilities at Bayswater have been further automated. Additional production equipment has also been purchased to produce the new Riva SC capsules at high speed and to manufacture the components in large quantities.

R&D expenditure of $4.4M significantly increased for the year and there are approximately seven new products under development, some of which will be released at the International Dental Show held in Cologne, Germany in April 2005. SDI now employs over 15 qualified scientists fully engaged in the research and development of dental materials.

SDI expanded operations in the US market from its Chicago office and the growing Central and South American markets benefited from the appointment of additional country managers and representatives to Colombia, Peru, Costa Rica and Nicaragua. SDI Germany, based in Cologne, continues to service the German market and a new entity, SDI Ireland, was established in October last year to further assist the growth in the EU. A sales office and warehouse facilities have also recently been opened in Tokyo, Japan. SDI now has exclusive distributors in over 100 countries.

The Board has declared a final dividend of 4.5 cents, which increases the total dividend to 8.5 cents (2003: 7.5 cents) for the year. The dividend will be fully franked and will be paid on 25 October 2004.