(Alliance News) - SDI Group PLC on Thursday said its first-half performance was hurt by slowdowns in China and Germany, with its profit falling despite increased revenue.

The stock fell by 19% to 90.00 pence in London on Thursday around midday.

The Cambridge, England-based medical technology company said pretax profit fell 50% to GBP2.7 million in the six months that ended on October 31, from GBP5.3 million the year before.

Revenue, by contrast, increased 1.6% to GBP32.2 million from GBP31.7 million, which Chair Ken Ford said was "despite the expiry of the very large profitable COVID contracts for cameras."

SDI said this increase was driven by 20% acquisition growth year-on-year, with purchases LTE and FAST delivering GBP6.3 million in non-organic sales and trading ahead of expectations. SDI also acquired Peak Sensors in early November.

Cost of sales for the period increased 1.2% to GBP11.9 million, while operating expenses jumped 18% to GBP17.0 million from GBP14.4 million.

Chair Ford said the drop in SDI's profits was partly due to destocking, "some of which is likely temporary", and partly due to a slowdown in Germany and China.

SDI now expects to report adjusted pretax profit between GBP7.9 million and GBP8.4 million for the year ending on April 30, down from GBP11.8 million for the prior 12 months.

"For over ten years SDI has consistently grown value by focusing on a clear and straightforward strategy," Ford added. "We acquire private companies at a significant discount...[they] are then encouraged to grow for the benefit of all stakeholders.

"I am pleased to report that we have a number of new acquisition opportunities under review. So, despite the recent headwinds we look forward to the future with great confidence."

By Emma Curzon, Alliance News reporter

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