Last close As at 05/08/2026
GBP1.85
▲ −7.00 (−3.65%)
Market capitalisation
GBP105m
Research: Industrials
Solid State’s FY21 results were slightly ahead of consensus estimates, which were upgraded in February and again in April. Encouraged by a strengthening order book, management has confirmed its commitment to the goal it set in 2017 of doubling EPS to 60p/share by FY22, so the consensus EPS estimate has been increased by 9%.
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Solid State |
Record profitability in FY21 despite pandemic
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Technology |
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14 July 2021 |
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Solid State’s FY21 results were slightly ahead of consensus estimates, which were upgraded in February and again in April. Encouraged by a strengthening order book, management has confirmed its commitment to the goal it set in 2017 of doubling EPS to 60p/share by FY22, so the consensus EPS estimate has been increased by 9%.
Benefitting from market diversity
All the group’s four manufacturing sites in the UK remained operational during the coronavirus lockdowns. Demand from the medical, security and defence markets was robust in FY21, broadly offsetting weakness in the commercial aviation and oil and gas markets and certain niche computing applications. Group revenues declined by only £1.1m year-on-year to £66.3m. Sales benefitted from the two acquisitions completed in March 2021, which contributed £1.3m revenues, and from customers pulling forward component orders amid supply chain concerns towards the year end. A £1.3m reduction in underlying administrative expenses related to restrictions on travel supported a 15% rise in adjusted PBT to £5.4m. Net cash of £3.2m at end FY21 (ex-IFRS 16 leases and deferred consideration) was unchanged from a year previously as the cash generated from operations covered the initial consideration payable for the acquisitions and dividend payments.
Effect of component shortages on FY22 uncertain
On a like-for-like basis, the order book at end May 2021 was up 9% year-on-year to £41.4m (£51.0m including acquisitions completed in March 2021) because customers are placing orders covering longer periods. This reflects a combination of greater customer confidence and concerns about critical component availability. Component availability could potentially affect both manufacturing and value-added supplies sales in FY22, but the group has invested in inventory and gross margins appear to be steady. Consensus estimates suggest FY22 revenue growth will be attributable to the acquisitions completed in March 2021, followed by a modest recovery in organic growth in FY23.
Valuation: Trading at a discount to peers
Solid State’s shares are now almost at their highest level for five years. Nevertheless, they are still trading on a year one P/E multiple at a small discount to the mean of our sample of specialist manufacturing companies (15.5x for Solid State versus 17.6x for peers) and a much larger discount to the mean for our sample of value-added distributors (15.5x versus 35.2x).
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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
The MISSION Group’s update indicates good trading in H121, with revenues up 9% and continuing sequential quarter-on-quarter recovery. Full year estimates are unchanged, implying H221 revenue growth of 14%. The £2.0m headline operating profit compares with the H120 loss of £1.8m, with the reduced cost base set to boost margins further in H221 and through FY22. The better performance is broadly based, with the tech and brand marketing agencies highlighted, along with recovery in property marketing. MISSION’s shares continue to trade at a discount to peers.