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Solid State beats analyst forecasts with strong performance in systems division

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Solid State LON:SOLI, the Redditch-based electronic components distribution and manufacturing company has published a trading update for the year to end-March 2024.

As previously reported, Solid State is a specialist value added component supplier and design-in manufacturer of computing, power, and communications products.

The company has had a record-breaking year, especially in the latter part of the year, with revenues and profit before tax being ahead of analysts’ consensus on the back of its Systems division, receiving revenues that were expected to be realised in 2025. Subsequently the company upgraded its expectations for FY25.

Solid State upgrades expectations

The company now expects revenues of GBP155.3m for FY23/24 and revenues of GBP152m for FY24/25. This equates to adjusted profit before tax of GBP12.5 for both financial years. However the company plans to reduce its debt exposure and transform this into a positive cash position of GBP1.1m, a turnaround of near 140%.

As The Armchair Trader previously reported, debt was a concern for Solid State, seeing a 56% increase year-on-year for the year to end-March 2023 and the electronics company seems to have taken this to heart and committed to increasing its cash reserves.

Solid State’s growth in the last twelve months has been primarily driven by its Systems Division, which increased y-o-y revenues by some 80%, with significant interest from the security and defence sectors and given the turbulent global political situation, Solid State’s clients have requested swift delivery of product, leading to FY25 revenues being pushed forward into the current fiscal year.

Normalization in components division

Conversely trade in Solid State’s Components Division has been less brisk than the previous year, which was influenced by a post-Covid restocking. Trade levels in components have fallen to more normalised levels, and the ongoing economic uncertainty has seen Solid State’s customers push our schedules. Management is not overly concerned about the slowdown, as the year previous was an anomaly, and given an exceptional last year, in the grand scheme of things management believes that open order books remain strong and operational tweaks have meant that it believes that it can achieve higher levels of business which can be booked and delivered in the year.


The company has secured exciting mid-term opportunities with multiple tier one security and defence customers, anchored by a key customer, for which Solid State will need to invest in and expand its integrated systems production capabilities.

Gary Marsh, chief executive officer said in a statement to the market: “I’m delighted that the group continues to show excellent resilience and the benefits of our divisional balance and sector focus against head winds in certain parts of the business. While we continue to take a prudent approach to managing expectations for the year ahead, I take comfort that our underlying business remains robust, balanced and I take great pride from the scale of orders that we have delivered during the course of what has been a record year.”

The AIM-listed company opened trading on Tuesday (9th April) at 1,336p and has a one-year return of 14.4% but has fallen back by 5.6% over the year-to-date. The company has a market capitalisation of GBP156.5m and its shares have ranged between 1.010p and 1,475p over a 52-week period.

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Hargreaves Lansdown IG Interactive Brokers Interactive Investor Charles Stanley
IG Interactive Brokers Charles Stanley

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