SDI LIMITED — Capital/Financing Update 2007

Nov 1, 2007

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2007 Trading Update

SDI Limited today announced that there is likely to be a significant impact on its reported first half performance due to the strengthening Australian dollar, in particular, with its relativity to the U.S. Dollar.

Based on current trends, the Company estimates that the impact of the strengthening Australian Dollar will result in a decrease to sales by approximately 6% for the six months ending 31 December 2007, when compared with the corresponding period last year. However, the impact on after tax profit has to some extent been offset by both natural hedging (expenditure in foreign currency) and current hedging contracts in place. SDI estimates that the sales for the period will be approximately 2.5% greater than the same period last year.

SDI’s strategy of increasing its marketing expenditure to gain increased market share in its existing markets and to penetrate new markets has had a further impact on after tax profits. The Company expects that this strategy will reduce bottom line growth in this financial year and the benefits will not be fully evident for 18 - 24 months. The Company believes that it is necessary to continue to increase its marketing expenditure in order to achieve the targeted future annual sales growth of 10% to 15%.

The unfavourable currency movement and the Company’s strategy of increasing its marketing expenditure should result in an after tax profit in the range of $0.5m to $1.0m for the six months ending 31 December 2007.

Whilst it is difficult to predict where the Australian Dollar exchange rate will go, the Company estimates that after tax profit for the full year ending 30 June 2008, should be in the range of $3.5m to $4.5m (2007: $4.1m).

For further information please contact:

Gerry Bullon INSOR Investor Relations 0418 106 675 2 November 2007