Last close As at 05/08/2026
GBP1.86
▲ 1.00 (0.54%)
Market capitalisation
GBP105m
Research: Industrials
Solid State’s trading update affirms the sustained strength in demand throughout H224, resulting in record FY24 revenue and adjusted PBT ahead of prior consensus of £155m and £12.5m, respectively. This is attributable to the earlier-than-expected delivery of a NATO contract. As a result, consensus FY24 revenue and adjusted PBT estimates have been raised by c 6% and c 20%, with respective FY25 estimates declining commensurately.
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Solid State |
Anticipating record adjusted PBT in FY24
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Industrials |
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2 April 2024 |
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Solid State’s trading update affirms the sustained strength in demand throughout H224, resulting in record FY24 revenue and adjusted PBT ahead of prior consensus of £155m and £12.5m, respectively. This is attributable to the earlier-than-expected delivery of a NATO contract. As a result, consensus FY24 revenue and adjusted PBT estimates have been raised by c 6% and c 20%, with respective FY25 estimates declining commensurately.
Strong defence and security demand maintained
Solid State is expected to enjoy FY24 revenue and adjusted PBT growth of over 23% and 16%, exceeding prior consensus of £155.3m and £12.5m, respectively. This is largely attributable to strong growth from the Systems division, with divisional revenue increasing c 80% y-o-y to c £103m, bolstered by strong demand from customers in the defence and security sectors and strong relationships with numerous Tier 1 suppliers. H224 benefited from an earlier-than-expected shipment of a NATO contract, which advanced profit into FY24 (from FY25). The Components division appears relatively subdued when compared to the exceptional FY23, having faced challenges as customers continued to normalise inventories. Nevertheless, the FY25 order book for this division remains encouraging, with shorter lead times and increased levels of operational efficiencies gains anticipated.
Focus on margin enhancement
The company has secured numerous Tier 1 defence and security customers, which will require increased capex and expansion of its ‘Integrated Systems’ production capabilities. Consequently, Solid State is developing a sales channel for its own brand (Durakool, Antenna, and Optical) products and introducing a new integrated Systems production facility, which should fuel future organic growth and operating margin enhancement, a key focus of the group (medium-term target of 12%). Order cover remains strong and is expected to be at least 55% (exceeding the historical norm of 50–60%) of next year’s consensus billings, with shorter lead times enabling more efficient conversion.
Valuation: Strong prospects could challenge discount
Having delivered total shareholder returns averaging 29% annually since FY19, management is seeking to maintain a CAGR of 20% to 2030. Augmenting organic development with strategic M&A should continue to support expansion in Solid State’s fast-growing market segments, with a broadening geographic footprint and increasing products and applications. The company now trades at a FY25e P/E in line with peers following the 2025e EPS adjustment.
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Consensus estimates
Source: Company reports, LSEG |
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Research: Consumer
The second full year of Greggs’ five-year growth plan to double revenue by FY26 should be marked down as very successful, especially so given the challenging external environment. Unlike many consumer-facing companies, high selling price inflation was accompanied by volume growth, leading to good market share gains. The consumer is responding well to new initiatives to grow revenue in new dayparts and digital channels. Profitability was well-managed with better recovery of input cost inflation than FY22. We look for more of the same in FY24, which will be a significant year from a capital investment perspective, and beyond.