Last close As at 05/08/2026
GBP1.85
▲ −7.00 (−3.65%)
Market capitalisation
GBP105m
Research: Industrials
Solid State has acquired Active Silicon, which designs and manufactures imaging and embedded vision systems that support the capture, processing and transmission of image data in high performance and critical environments. The initial consideration payable is £2.7m cash (net), financed from existing resources. Broker consensus FY22 EPS has been raised by 5% to reflect the earnings enhancement in the first full year.
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Solid State |
Acquisition of Active Silicon
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Technology |
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2 March 2021 |
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Solid State has acquired Active Silicon, which designs and manufactures imaging and embedded vision systems that support the capture, processing and transmission of image data in high performance and critical environments. The initial consideration payable is £2.7m cash (net), financed from existing resources. Broker consensus FY22 EPS has been raised by 5% to reflect the earnings enhancement in the first full year.
Acquisition complements manufacturing activity
The acquisition complements Solid State’s existing opto-electronic and embedded computing capability in the high-growth vision market. The enlarged group will be able to offer differentiated, high performance image processing and embedded computing solutions, with Active Silicon providing bespoke base board designs that process the data captured by third-party cameras and the group’s Steatite subsidiary providing additional computer graphic processing hardware. Active Silicon is currently supplying systems for applications including computer vision-assisted surgery, radiation therapy, ophthalmology, object recognition and sorting in high volume manufacturing, and video surveillance in challenging environments.
Deal is earnings-enhancing in first full year
For the year ended March 2020 Active Silicon reported revenue of £5.5m and profit after tax of £0.3m. Net assets at the year end totalled £5.7m. The company’s performance during H121 was adversely affected by the coronavirus pandemic, but both orders and billings have since recovered, so management expects FY21 revenues will be just under £4.5m, generating c £0.25m underlying profit after tax. Management expects the acquisition to be earnings enhancing in the first full year. The initial consideration of £2.7m (net of acquired cash) is c 11x FY21e net earnings, 9.0x FY20 net earnings. It is payable in cash, with an additional deferred element of up to £1m dependent on performance over the next 25 months and will be financed from the group’s existing cash resources and banking facilities.
Valuation: Trading at a discount to peers
Solid State’s shares have fully recovered from the pandemic-induced sell-off in March 2020 and are now at the highest level they have been for five years. They are currently trading on a year 1 P/E multiple that is at a small discount to the mean for our sample of specialist manufacturing companies (16.0x for Solid State versus 17.7x for peers) and a much larger discount to the mean for our sample of value-added distributors (16.0x versus 32.5x).
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Consensus estimates
Source: Company data, broker consensus. Note: *Adjusted for exceptionals, share-based payments and amortisation of acquisition intangibles. |
Solid State is a research client of Edison Investment Research Limited
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Research: TMT
XP Power reacted quickly to pandemic-related disruption early in 2020, so well positioned to benefit from a sustained uptick in orders as COVID-19 generated demand for critical care equipment and semiconductors. The company reported a record year for revenue and earnings while reducing net debt; the dividend was reinstated from Q220 as visibility improved. Despite expecting demand to normalise, XP still expects growth in underlying revenues in FY21.