Solid State LON:SOLI, the Redditch-based electronic components distribution and manufacturing company published its results for the six months to 30th September 2022.
The company reported revenues had increased from GBP39.4m in 1H21/22 to GBP59.4m in 1H22/23. This translated into an adjusted operating profit margin of 9.3%, up from 8.6% the year previously, or an adjusted profit before tax of GBP5.2m, up from GBP3.3m the year previously. Interim dividends increased from 6.25p to 6.5p.
The company had net debt of GBP16.1m up 209.6% from GBP5.2m in FY21/22, and orders were GBP112.5m for 1H22/23 against GBP85.5m for the full year 2021/22.
Resilience and expansion
In a statement this morning (6th December) Nigel Rogers, the company’s chairman said: “”The group has delivered excellent first half results and is building strong momentum despite a more challenging macro-economic climate. The successful acquisition of Custom Power has added resilience to the group and accelerated the expansion of our power business in the key North American market. We continue to see acquisitions as a key pillar of our growth strategy alongside internal investment to fuel organic growth.”The AIM-listed company opened trading today at 1,306p and has offered a year-to-date return of 2.6% and a one-year return of 20%. The company has a market capitalisation of GBP148.8m and its shares have ranged between 913p and 1,419p over a 52-week period.
As previously reported, Solid State is a specialist value added component supplier and design-in manufacturer of computing, power, and communications products and saw several important contract wins in the 1H22 including: Innovative pollination contract, Power design appointment; Transport for London contract and post-period end awards of two significant communications contracts in the defence sector by the NATO Support and Procurement Agency.
The company completed the acquisition of US-based Custom Power in early August 2022 funded by an oversubscribed placing raising GBP28.3m before expenses and GBP13, of new bank debt facilities provided by Lloyds Bank.
Internationalising
John Macmichael, managing director of the components division of Solid State Plc in a call with The Armchair Trader said that the company is hoping to “internationalise” its business and diversify its product range to where it sees future industry growth.
“Talent acquisition is key,” he said, “there’s a limited pool of high-end expertise in the market,” and the company was planning on following up the acquisition of Willow with other strategic buys.
Solid State supplies commercial, industrial and military markets with durable components, assemblies and manufactured units for use in specialist and harsh environments. The company specialises in industrial and ruggedised computing, displays, battery power solutions, communications including antennas and secure radio systems, imaging technologies, electrical and electronic components and is involved in assembly as well as the supply of components.
A key part of the company’s operations is finding solutions to complex engineering challenges requiring design-in support and component sourcing. Its products are used by the military, the renewable energy sector, in healthcare, offshore in oil and gas, transport, as well as in consumer and retail applications and the company also provides technical support, design and R&D.
- Share Tip: Producing gold miner looks set to double its output
- SRT profits soar as governments ramp-up maritime surveillance
- Gaming Realms sees further surge in revenues from North America
Solid State has five principal trading companies in the UK: Solid State Supplies, Steatite, Pacer Components, Active Silicon and Willow Technologies. Willow Technologies also has a US-based subsidiary, American Electronic Components Inc (AEC) based in Indiana.
Macmichael said that Solid State had identified the US as a key strategic market and was looking to expand in North America through acquisition.
Analysts from brokers WH Ireland, finnCap and Edison Investment Research, provide equity research on Solid State, and the company considers the average of their research forecasts to represent market expectations, being for Solid State’s FY22/23: revenue of GBP120.3m (previously GBP117.3m), and adjusted profit before tax of GBP10.45m (previously GBP9.4m).
