Small Caps | 10:20 AM
By Tim Boreham
ASX code: ((SDI))
Shares on issue: 118,865,530
Market cap: $101.0m
CEO: Samantha Cheetham
Financials (first half to December 2023): revenue $52.2m (up 3.5%), earnings before interest tax depreciation and amortization $9m (up 49%), net profit $3.7m (up 37%), dividends per share 1.5 cents (steady), cash balance $7.1m (-18%), net debt $17.9m (-1.1%).
Board: Jeffery Cheetham (chair), Ms Cheetham, Cameron Allen, John Slaviero (CFO/COO), Gerald Bullon, Dr Geoffrey Knight, Gerard Kennedy
Identifiable major shareholders: Cheetham family interests 45.8%, Garrett Smythe Ltd 3.2%, Nicholas and Annette Debenham 3%, Nicholas Debenham 1.5%.
In 1987, then Prime Minister Bob Hawke said no child would live in poverty by 1990 an utterance that proved an aspirational statement rather than a core promise.
Over at the United Nations, promises are more like hard targets - at least when it comes to phasing out the use of mercury.
Specifically, signatory nations to the UN's Minamata Convention on Mercury have pledged to abolish dental amalgams - a common filling used for the last 175 years - by 2030.
About half of the amalgam material consists of mercury, which is known for its manifold health risks. The remainder consists of easily recyclable silver, tin and copper.
It's estimated that 3,000 to 5,000 tonnes of mercury are in our gobs and up to 40% enters water or solid waste streams. In the case of cremations, it ends up in the atmosphere along with Uncle Bertie's soul.
Sweden, Norway and Germany have already banned amalgam, while 128 nations have signed up to the Minamata Convention. Over the last five years, fewer than 6% of posterior teeth fillings used amalgam, compared with 73% five years previously.
These trends are music to the ears of SDI, our home-grown supplier of filling and aesthetics material to more than 100 countries and regions including the US, Europe and Brazil.
SDI's revenues mainly were derived from amalgam, which chief executive Samantha Cheetham dubs a "great product" given there's no need for marketing spend.
But the company has bit the bullet and swung sharply to composite and glass ionomer cement materials, as well as whitening products.
"We have a really small market share in most countries, but we are growing," she says.
SDI holds especially high hopes for its high-margin Stela, an amalgam replacement material that promises to revolutionise filling procedures by making dentist visits quicker and more efficient.
Meanwhile, management has a spring in its step after last week's disclosure of a record performance for the financial year just ended (see below).
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Long in the tooth
For more than 50 years, SDI has been developing and exporting dental supplies from its base at Bayswater, in eastern Melbourne.
Formerly known as Southern Dental Industries, SDI was founded in 1972 by Jeffery James Cheetham (now the company chair).
The company listed on the ASX in 1985, but ran into trouble after expanding into selling dental chairs. The elaborate patient repositories seemed an obvious allied activity, but in reality, it required very different skills.
The company quickly retreated to selling the mouth gob and smaller equipment, such as applicators.
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