Solid State's profits rise by 40%

Solid State, a supplier of specialist industrial computers and equipment, reported an increase in full year profits as it begins the new financial year with a good order book.

The company’s profit before rose by 40% to £4.2m in the financial year ended 31 March 2016. Turnover also increased by 21% to £44.1m.

Earnings per share rose by 43% to 49.9p. The company said it recommended a dividend of 8p to be paid on the 23 September.

Solid Sate said the profit tax included a one-off profit as a result of the settlement of a contract with the Ministry of Justice (MoJ).

Solid Sate’s subsidiary Steatite was awarded a contract by the MoJ in July 2014, for a three-year term worth about £34m to supply and maintain offender tagging technology. The company said that the contract was terminated “without blame” in February 2016 as the government changed course and began to pursue a commercial off-the-shelf solution instead of bespoke version with Steatite.

The Redditch based company said it agreed a compensation package and the settlement was bound by a non-disclosure agreement.

It also said the increase in profit and turnover was due to acquisitions during the financial year of specialist display business Ginsbury Electronics in April 2015 for £2.11m and specialist battery business Creasefield for £1.54m, which was made post period.

The AIM listed company said it has “a pipeline of target acquisitions” to develop their portfolio of products and services, and its aim is to acquire at least one per year.

Solid State said they have entered the 2016-17 financial year with a strong order book and growth strategy. As of 31 May the order backlog was £17.84m, an increase of £14.41m in 2015 on a like for like basis.

Regarding Brexit, the company said it predominantly sells in sterling to UK customers so they expect the impact of the result of the European Union referendum to be “limited”.

Chairman Tony Frere said: "Solid State has made two valuable acquisitions in just over 12 months driving integration and cross selling opportunities between the complementary group divisions. We are delighted to have reached a quick and satisfactory settlement with the MoJ and can report that the core group has continued to progress during the year.

“The board is optimistic about the prospects for Solid State and believes that the track record of delivery and the scale of the group will prove to be an increasingly important competitive driver in its markets."

Shares in Solid State were up 0.84% to 300p at 1059 BST.