Solid State sees record performance continue in first half

Computing, power and communications products manufacturer Solid State updated the market on its trading for the six months ended 30 September on Thursday, reporting that the record performance it in the last financial year had continued in the first half of the current year.

The AIM-traded company said it was on track to deliver the recently-upgraded full-year earnings in line with the board's expectations.

Group sales for the first half were expected to show organic growth of around 7.5% on a proforma basis, giving revenue in excess of £33m, despite the heightened macroeconomic and political uncertainties of recent months.

Gross margins had benefited from around £0.3m of foreign exchange tailwinds in the first half, with underlying group margins seeing a “slight improvement” over the prior period.

That margin improvement was achieved notwithstanding the expected dilutive effect on group margins of the enlarged value added distribution division post the Pacer acquisition, the board explained.

As a result of favourable operational gearing, revenue growth and gross margin improvement, adjusted profit before tax for the period was expected to be approximately £2.5m.

“The board is particularly pleased with the cash generation in the first half,” the board said in its statement.

“This has enabled the continued early repayment of the Pacer acquisition loans and resulted in a return to a net cash position of circa £0.25m at 30 September.”

Solid State’s open order book at period end stood at £36.5m, compared to £36.2m a year earlier, on a proforma basis.

The company said its interim results for the six months ended 30 September were expected to be released on 3 December.

As at 1256 BST, shares in Solid State were down 1.22% at 485p.