SDI grows to new heights

Shares in Australia's largest dental consumables manufacturer, publicly listed SDI Limited (ASX:SDI), hit a new high of $8.00 in late August on the back of a 36% increase in profits to $5.45m for the financial year ended 30 June 2003.

Earnings per share of 23.3 cents increased by 35.5% over the previous year and return on equity grew from 22.7% to 24.7%. Profit before tax increased by 39% to $7.84m, with earnings before interest and tax up by 36.5% to $8.09m.

According to the company, the result was achieved by strong increases in international sales revenue. In local currencies, sales in North America increased by 14.7%, South America by 13.6% and Europe 18.8%. A stronger Australian dollar resulted in a consolidated sales increase of 7.2% to A$36.7m. Export sales represented 93% of total consolidated sales.

SDI Chairman, Mr Russell Smith, said that this outstanding result was delivered despite external difficulties facing the company during this period.

"If one considers that SDI, like many other companies, had to deal with the effect of SARS, the destabilising effect of the war in Iraq and a severe North American winter, the management and staff have done an exceptional job in keeping our growth ahead of even the highest of market expectations."

Referring to the company's ability to again deliver in excess of 30% earnings growth, SDI's managing director, Mr Jeffery Cheetham, expressed satisfaction in the continuing organic growth of the company's products.

"It is not insignificant that this year's result has been achieved by organic growth in existing markets," he said. "The sales of new products launched at IDS 2003 in Cologne, Germany, earlier this year will positively impact on the results of 2004 and beyond."

In discussing SDI's new products, Mr Cheetham said that the company's new generation glass ionomer cement, Riva, is in full production and that there are strong indications that demand will exceed original expectations which the production line has the capacity to meet.

SDI's new state-of-the-art curing light, the Radii, has been well accepted by the international market by the international market, especially the United States. According to Mr Cheetham, a major U.S. dental distributor has chosen the Radii as its sole private label LED curing light. Demand to date has again far exceeded SDI's expectation and production is being increased to cater with demand.

The Board of SDI has declared a final dividend of 4.5 cents (2002:3 cents) lifting the total dividend for the year to 7.5 cents, an increase of 50% over the previous year (5 cents). The dividend will be fully franked and paid on 20 October 2003.