REG - Solid State PLC - Trading Update

Solid StateAnnouncement

30/10/2023 07:15

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RNS Number : 6131R  Solid State PLC  30 October 2023

30 October 2023

 

Solid State plc

("Solid State", the "Group" or the "Company")

Trading Update

 

Solid State plc (AIM: SOLI), the specialist value added component supplier and
design-in manufacturer of computing, power, and communications products,
announces a trading update for the six months ended 30 September 2023 (the
'Period' or 'First Half').

The Directors are pleased to report a strong first half trading performance,
including:

·      Revenues of approximately £88.0m (2022: £59.4m). Organic
revenue growth in the Period being in excess of 35% on a constant currency
basis;

·      Adjusted profit before tax* of at least £7.0m (2022: £4.2m),
reflecting a 67% year on year increase; and,

·      Strong cash generation from trading activities, contributing to
settlement of deferred consideration relating to previous acquisitions, and
paying down the Group's borrowings.

The strong revenue growth continues to be driven by delivery of more than
£23m of product under the initial and follow on security and defence
contracts, and the full period of contribution from Custom Power. USD currency
headwinds were slightly more than £1m at a revenue level.

The Group continues to see strong demand from clients within the security and
defence sectors, with robust billings and order intake in the First Half.
However, as previously reported, we are seeing clients move to more normalised
levels of stocking because of improving component lead times combined with the
higher interest rate environment, resulting in increased customer focus on
managing working capital.

The open order book at the end of September remained robust at £99.7m (30
September 2022: £112.5m) with circa 60% expected to be delivered in the
current financial year. However, the shorter lead times will enable more
efficient conversion of the order book into billings.

Post Period end, Solid State launched a Group-wide exercise to ensure that its
branding and web presence reflects the qualities of the Group and positions
its operating units most suitably to optimise market penetration and
cross-selling opportunities. The recently announced rebranding of the
Components division under the trading name of "solsta" is a first step in this
exercise.

The Board is very pleased with the ongoing delivery of Solid State's growth
strategy. As a result of the strong start to the year, on a full-year basis,
the Directors expect to deliver stronger than anticipated organic revenue
growth, meaning the Group is expected to be marginally ahead of current
consensus revenue and adjusted PBT expectations for the year ending 31 March
2024.

 

*Adjusted performance metrics reported consistently with those reported in the
31 March 2023 annual report, the adjustments relate to amortisation of IFRS 3
acquisition intangibles, share based payments charges and non-recurring
charges in respect of acquisition costs and fair value adjustments.

(1) The Company considers the average of the most recently published research
forecasts prior to this announcement by all providers - Cenkos Securities plc,
finnCap Group plc and WH Ireland plc to represent market expectations for
Solid State.

 Market Expectations          FY23/24   FY24/25
 Revenue                      £147.3m   £152.3m
 Adjusted profit before tax*  £11.9m    £12.5m
 Net (debt) / cash            (£3.1m)   £1.0m

Following completion of the merger between finnCap and Cenkos, renamed
Cavendish, the Company understands that the number of entities providing
research on the firm will consolidate from three to two.

Investor Site Visits to Head Office in Redditch

Solid State holds site visits to its head office in Redditch where operations
from both the Systems and Components divisions can be seen.  Interested
investors should contact solidstate@walbrookpr.com
(mailto:solidstate@walbrookpr.com) .

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

For further information please contact:

 

 Solid State plc                                            Via Walbrook

 Gary Marsh - Chief Executive

 Peter James - Group Finance Director
 Cavendish Securities plc (Nominated Adviser & Broker)      0207 397 8900

 Adrian Hadden / Callum Davidson (Corporate Finance)

 Tim Redfern / Jasper Berry (Sales)
 Walbrook PR (Financial PR)                                 020 7933 8780

 Tom Cooper / Nick Rome / Joe Walker                        0797 122 1972

                                                            solidstate@walbrookpr.com (mailto:solidstate@walbrookpr.com)

Analyst Research Reports: For further analyst information and research see the
Solid State plc website: https://solidstateplc.com/research/
(https://urldefense.proofpoint.com/v2/url?u=https-3A__solidstateplc.com_research_&d=DwMFAg&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=05PHl3GHdShYuaCii2fBRpoqaNr9B1d97X09daeosu0&m=JmX-gQVke87P3UDBxQzNglNm9FfzH5yZtIa_SmElSS4&s=ib8r3ul2tCaEvJ39SnR1LT7nCa7gAcRQzgO-kNoyZoM&e=)

 

Notes to Editors:

Solid State plc (SOLI) is a value added electronics group supplying
commercial, industrial and defence markets with durable components,
assemblies, manufactured units and power units for use in specialist and harsh
environments.  The Group's mantra is - 'Trusted technology for demanding
environments'.  To see an introductory video on the Group
- https://bit.ly/3kzddx7 (https://bit.ly/3kzddx7)

Operating through two main divisions: Systems (Steatite, Active Silicon &
Custom Power) and Components (Solid State Supplies, Pacer, Willow Technologies
& AEC); the Group specialises in complex engineering challenges often
requiring design-in support and component sourcing for computing, power,
communications, electronic, electro-mechanical and opto-electronic products.

Headquartered in Redditch, UK, Solid State employs approximately 400 staff
across the UK and US, serving specialist markets with high barriers to entry
in industrial, defence and security, transportation, medical and energy.

Solid State was established in 1971 and admitted to AIM in June 1996.  The
Group has grown organically and by acquisition - having made three
acquisitions in the last three years.

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