An interesting RNS this morning from SDI Group, the provider of automated sorting systems for retailers' warehouses. If you believe that the retail industry hasn't stopped after the Christmas spending orgy, and that a proportion of retailers will elect to install sortation systems to reduce costs and improve productivity and margins, then SDIG may be worthy of further research.

Contract Wins

SDI Group plc (AIM: SDIG.L), which designs, builds and supports integrated materials handling solutions for international retail, wholesale, fulfilment and e-commerce distribution operations is pleased to announce recent contract wins with Decathlon worth approximately £3m, of which approximately £1.8m will be recognised in the current financial year with the balance to be recognised in the financial year ending 31 March 2011.

The contracts are for the installation of two additional sorting systems for Decathlon, the major French sports clothing and equipment retailer, with a commitment for a further one order in the first half of 2010. This builds on the five sites which SDI has commissioned already for Decathlon under its framework contract, bringing the total to eight sites.

Additionally, Decathlon has indicated that it will be considering a further two sites for implementation in the second half of 2010.

The Group has recently reported interim results for the six months to 30 September 2009, which were in line with management expectations.

Commenting on the contract wins, Gordon Smith, SDI's CEO, said "These wins continue the excellent relationship SDI has with this important retailer in Mainland Europe. Decathlon recognises SDI's ability to improve distribution centre productivity and reduce costs, ultimately helping to achieve improved retail sales margins and support future growth."


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