NZSE:SDL

Stock Analysis Report

Executive Summary

Solution Dynamics Limited provides customer communication solutions in New Zealand, Australia, Europe, and the United States.

Snowflake

Fundamentals

Flawless balance sheet with poor track record.

Share Price & News

How has Solution Dynamics's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SDL has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.6%

SDL

6.6%

NZ IT

1.1%

NZ Market


1 Year Return

n/a

SDL

18.8%

NZ IT

16.5%

NZ Market

Return vs Industry: Insufficient data to determine how SDL performed against the NZ IT industry.

Return vs Market: Insufficient data to determine how SDL performed against the NZ Market.


Shareholder returns

SDLIndustryMarket
7 Day4.6%6.6%1.1%
30 Day1.3%-3.9%-1.1%
90 Day-6.5%16.1%1.6%
1 Yearn/a21.2%18.8%21.5%16.5%
3 Year-24.6%-31.3%53.9%42.6%57.1%36.5%
5 Year261.2%216.0%90.0%67.3%94.0%50.4%

Price Volatility Vs. Market

How volatile is Solution Dynamics's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Solution Dynamics undervalued compared to its fair value and its price relative to the market?

34.43x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SDL (NZ$1.58) is trading above our estimate of fair value (NZ$0.65)

Significantly Below Fair Value: SDL is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SDL is poor value based on its PE Ratio (34.4x) compared to the IT industry average (23.6x).

PE vs Market: SDL is poor value based on its PE Ratio (34.4x) compared to the NZ market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate SDL's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: SDL is overvalued based on its PB Ratio (5.9x) compared to the XO IT industry average (2.6x).


Next Steps

Future Growth

How is Solution Dynamics forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

-2.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SDL's earnings are forecast to decline over the next 3 years (-2.1% per year).

Earnings vs Market: SDL's earnings are forecast to decline over the next 3 years (-2.1% per year).

High Growth Earnings: SDL's earnings are forecast to decline over the next 3 years.

Revenue vs Market: Insufficient data to determine if SDL's revenue is forecast to grow faster than the NZ market.

High Growth Revenue: Insufficient data to determine if SDL's revenue is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if SDL's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Solution Dynamics performed over the past 5 years?

7.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SDL has a high level of non-cash earnings.

Growing Profit Margin: SDL's current net profit margins (2.7%) are lower than last year (6%).


Past Earnings Growth Analysis

Earnings Trend: SDL's earnings have grown by 7.7% per year over the past 5 years.

Accelerating Growth: SDL's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SDL had negative earnings growth (-49.7%) over the past year, making it difficult to compare to the IT industry average (38.5%).


Return on Equity

High ROE: SDL's Return on Equity (17%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Solution Dynamics's financial position?


Financial Position Analysis

Short Term Liabilities: SDL's short term assets (NZ$5.0M) exceeds its short term liabilities (NZ$3.7M)

Long Term Liabilities: SDL has no long term liabilities


Debt to Equity History and Analysis

Debt Level: SDL is debt free.

Reducing Debt: SDL had no debt 5 years ago.

Debt Coverage: SDL has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: SDL has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: SDL has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if SDL's debt is covered by short term assets.


Next Steps

Dividend

What is Solution Dynamics's current dividend yield, its reliability and sustainability?

2.53%

Current Dividend Yield


Dividend Yield vs Market

company2.5%marketbottom25%3.1%markettop25%5.5%industryaverage2.5%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: SDL's dividend (2.53%) isn’t notable compared to the bottom 25% of dividend payers in the NZ market (3.1%).

High Dividend: SDL's dividend (2.53%) is low compared to the top 25% of dividend payers in the NZ market (5.5%).


Stability and Growth of Payments

Stable Dividend: SDL has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: SDL's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (87.2%), SDL's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Solution Dynamics's salary, the management and board of directors tenure and is there insider trading?

1.8yrs

Average management tenure


CEO

Siva Sivasubramaniam 0

13.3yrs

Tenure

NZ$374,000

Compensation

Mr. Indrajit Nelson Sivasubramaniam, also known as Siva, has been the Chief Executive Officer of Solution Dynamics Limited since August 2006. Mr. Siva career began with an American based Telecommunications ...


CEO Compensation Analysis

Compensation vs Market: Siva's total compensation ($USD236.74K) is above average for companies of similar size in the NZ market ($USD63.81K).

Compensation vs Earnings: Siva's compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.8yrs

Average Tenure

Experienced Management: SDL's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

5.3yrs

Average Tenure

Experienced Board: SDL's board of directors are considered experienced (5.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.1%.


Management Team

  • David Thornber

    Group Manager of Infrastructure

    • Tenure: 0yrs
  • Siva Sivasubramaniam

    CEO & Director

    • Tenure: 13.3yrs
    • Compensation: NZ$374.00k
  • Chris Veale

    CFO, Financial Controller & Company Secretary

    • Tenure: 13.8yrs
  • Nick Williams

    General Manager of Technology Services

    • Tenure: 1.8yrs
  • Tony Edwards

    Sales Manager of Asia Pacific

    • Tenure: 0.8yrs
  • Mark Wootton

    Chief Operating Officer of Technology Services

    • Tenure: 0.7yrs

Board Members

  • Elmar Toime (70yo)

    Independent Director

    • Tenure: 3.8yrs
    • Compensation: NZ$25.00k
  • Siva Sivasubramaniam

    CEO & Director

    • Tenure: 13.3yrs
    • Compensation: NZ$374.00k
  • Peter Beavis

    Independent Director

    • Tenure: 9.5yrs
    • Compensation: NZ$25.00k
  • Andy Preece

    Independent Director

    • Tenure: 0.5yrs
    • Compensation: NZ$4.00k
  • John McMahon

    Chairman

    • Tenure: 6.9yrs
    • Compensation: NZ$45.00k
  • Lee Eglinton

    Independent Director

    • Tenure: 0.5yrs
    • Compensation: NZ$4.00k

Company Information

Solution Dynamics Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Solution Dynamics Limited
  • Ticker: SDL
  • Exchange: NZSE
  • Founded: 1996
  • Industry: Data Processing and Outsourced Services
  • Sector: Software
  • Market Cap: NZ$23.131m
  • Shares outstanding: 14.64m
  • Website: https://www.solutiondynamics.com

Number of Employees


Location

  • Solution Dynamics Limited
  • 18 Canaveral Drive
  • Albany
  • Auckland
  • 632
  • New Zealand

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SDLNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDJul 2004

Biography

Solution Dynamics Limited provides customer communication solutions in New Zealand, Australia, Europe, and the United States. The company offers advanced digital asset management solutions, which combine a ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/13 10:30
End of Day Share Price2019/11/07 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.