Last close As at 05/08/2026
GBP1.85
▲ −7.00 (−3.65%)
Market capitalisation
GBP105m
Research: Industrials
Solid State’s trading update this morning notes that, following an exceptionally strong finish to FY22, it expects the group to announce a 28% increase in revenues year-on-year to a record c £85m and a 33% jump in adjusted profit before tax to c £7.2m, also a record. Consensus FY22 and FY23 adjusted PBT estimates, which were upgraded in February, have been raised by 11% and 12% respectively.
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Solid State |
Strong finish to FY22 to deliver record profit
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Technology |
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22 April 2022 |
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Solid State’s trading update this morning notes that, following an exceptionally strong finish to FY22, it expects the group to announce a 28% increase in revenues year-on-year to a record c £85m and a 33% jump in adjusted profit before tax to c £7.2m, also a record. Consensus FY22 and FY23 adjusted PBT estimates, which were upgraded in February, have been raised by 11% and 12% respectively.
Working round supply chain constraints
The group beat the consensus expectations set out in February because it was able to secure scarce components and thus deliver certain shipments in March rather than delaying them into FY23, as had previously seemed likely. Taking the FY22 as a whole, the two acquisitions completed in March 2021 both performed strongly and ahead of management expectations. Despite the well-publicised supply chain issues, like-for-like revenues grew by over 8%. Demand was particularly strong from the energy sector, where the high global oil price has driven a recovery in investment, and from the aerospace and defence sector.
Record order book supports FY23 growth
The order book at the end of March 2022 reached a record £85.5m, ahead of £74.1m at the end of January 2022, which already contained the two significant contract awards from new customer CyanConnode and from BAE Systems. While the record order book points to further revenue growth in FY23, like all businesses, the group is subject to inflationary pressures. In addition, while it is able to pass on most of the component price increases, price hikes mean the percentage gross margin is under pressure. Consensus estimates show a year-on-year increase in revenues of £5.0m with an associated increase in PBT of £0.4m. As discussed in our February note, the group has absorbed cash in working capital as it has invested in inventory to mitigate the impact of component shortages.
Valuation: Trading at discount to peers
The shares have dropped back from a peak of 1,419p in early January despite a positive trading update in February. They are trading on a year one P/E multiple at a modest discount to the mean of our sample of specialist manufacturing companies (16.2x for Solid State versus 20.5x for peers) and a larger discount to the mean for our sample of value-added distributors (16.0x versus 26.2x).
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Consensus estimates
Source: Company data, broker consensus |
Solid State is a research client of Edison Investment Research Limited
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Research: Healthcare
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