Solid State plc, the London Stock Exchange, AIM listed manufacturer of computing, power and communications products, and distributor of electronic components, has announce a trading update for the year ended 31 March 2019.
The Redditch-based Group profit for the financial year ended 31 March 2019 will be slightly ahead of recently upgraded market consensus forecasts which are £3.5 million adjusted profit before tax. The Group says this result is particularly pleasing as market forecasts were upgraded twice in the second half of the 2018/19 financial year.
Year-on-year Group revenue is expected to be ahead of expectations at around £56 million, representing growth of over 20 per cent on a reported basis and reflecting close to 10 per cent organic growth (excluding the Pacer Technologies Ltd acquisition of last November).
The integration of Pacer into the Value Added Distribution division is progressing as planned. The brand new facility in Weymouth began production in March 2019.
Cash generation in the last quarter has been much stronger than expected. Some of this strength is due to timing benefits resulting from pro forma payments from customers, however the underlying cash generation was also very pleasing. As a result, in April 2019, the Group made an early repayment of £2.0m of the highest price element of the term loan taken out in respect of the acquisition of Pacer. Having done this, the Group has been able to extend the undrawn revolving credit facility and therefore maintain the Group’s overall funding flexibility.
The open order book at the 31 March 2019 of £35.9 million places Solid State in a good position for 2020.
The Board says it is confident that its long-term strategy will continue to deliver organic growth and that this can be complemented by further targeted acquisitions. The success of the organic growth strategy is now in evidence and the Board also continues to look at future relevant acquisitions.