Solid State set to end year above expectations

Component supplier Solid State said in a trading update on Thursday that, following a continuation of the strong performance reported in its interim results in December, it now expected to report revenues “slightly ahead” of current consensus expectations for the year of at least £80m.

The AIM-traded firm said it anticipated adjusted profit before tax for the 12 months ending 31 March “well ahead” of current consensus expectations.

It said that trading momentum was reflected across both the systems and components divisions, including a continued good margin mix from projects delivered across the group, and “very strong trading” at the recently-acquired Active Silicon business.

As a result of the strong performance at Active Silicon, the group said it expected to further increase the earn-out provision by around £0.5m, which would be included in net debt at year-end.

Forecast year-end fair value of deferred contingent consideration was now £5.75m, including both Active Silicon and Willow Technologies.

Solid State said order intake remained “strong”, with a record open order book as at 31 January of £74.1m, up from £70.3m at the end of November.

The company said the global supply chain was continuing to present challenges for both Solid State and its customers.

In many instances, the risks were being mitigated through collaboration with the client and supplier, and through order management; complemented by continued strong group cash generation to support investment in working capital to manage the potential shortages.

The firm said it had net cash with banks of £0.4m as at 31 January, and had retained its £3m overdraft and £7.5m revolving credit facility, which was committed until November.

“The year continues to be busy and challenging, with widely reported supply chain disruption, however the team is working very hard to collaborate with both customers and suppliers to ensure timely supply of both components and systems,” said chief executive officer Gary Marsh.

“The depth of our relationships and our balance sheet strength is helping greatly in being able to ensure consistent supply.

“The record open order book gives the board confidence in the prospects for Solid State.”

At 1049 GMT, shares in Solid State were up 0.78% at 1,164p.