Last close As at 05/08/2026
GBP1.85
▲ −7.00 (−3.65%)
Market capitalisation
GBP105m
Research: Industrials
Management’s strategy is to increase Solid State’s internal capabilities, enabling greater product differentiation and value added, particularly in the Systems business. This is expected to increase the addressable market and growth along with offering higher returns, key to the margin target of 12% (FY25 expectation c 8%). Achieving this through organic and inorganic means underpins management’s 20% CAGR target for shareholder returns.
Solid State |
H1 trading in line; guidance unchanged
|
Industrials |
QuickView
7 November 2024 |
Share price graph
Share details
Business description
Bull
Bear
Analyst
Solid State is a research client of Edison Investment Research Limited |
Management’s strategy is to increase Solid State’s internal capabilities, enabling greater product differentiation and value added, particularly in the Systems business. This is expected to increase the addressable market and growth along with offering higher returns, key to the margin target of 12% (FY25 expectation c 8%). Achieving this through organic and inorganic means underpins management’s 20% CAGR target for shareholder returns.
Trading update
Trading has been resilient in more challenging markets and in the absence of two large defence orders delivered in the previous year. Revenues for the first half are expected to be c £62m, down from £88m, benefiting from £23.4m of large defence orders. The Systems Division continues to make underlying progress with growth of c 7% to over £35m excluding the large contracts. The Components division continues to face market destocking and shorter lead times/order delays as the sector reacts to economic uncertainty as reported by many peers. Revenues for the division are expected to be c £27m. Management has acted where necessary to address costs and protect profitability. Group adjusted PBT is expected to be c £2.5m, down from £7.3m. Further progress has been made on the growth agenda. Organically this includes new ‘Integrated Systems’ production capabilities highlighted by the investment in a new manufacturing facility in Tewkesbury. This will drive efficiency and enhanced capabilities to enable greater product value-add. Inorganically the acquisitions of Gateway to enhance distribution capabilities and own brand products and Q-Par USA for antenna production strategy in the US.
Outlook
The order book at the start of the year (March) was £88m, declining to £77m at the half year (September), but the company has seen a strong pick-up since, in particular in Components in the US, with the order book up to £84m (October). Shorter lead times are driving faster conversion of the order book (c 65% of the September order book to convert in H2). Supported by a positive visible order pipeline, particularly in defence, management guidance is unchanged. The company continues to be cash generative with consensus expectation for net debt of £4.8m at the year end.
Valuation: Discounting future potential
FY25 was always set to be more challenging in the absence of the significant defence contracts the previous year. Management is negotiating this headwind and strategy development, especially recent acquisitions, suggesting that the medium-term strategy remains intact, which should drive future value creation.
|
Consensus estimates
Source: Company reports, broker consensus estimates |
|
|
Research: Industrials
Braemar’s H125 results reflect a continuation of the successful diversification strategy that has been deployed for the last three years. Revenue was robust, up 1%, and operating profit increased 9%, highlighting operational leverage. Braemar’s underlying markets retain strong fundamentals that include increasing global demand and an aging global fleet; this bodes well for the future and is reflected in its robust forward order book. The company remains on track to achieve market expectations for this financial year.