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(Alliance News) - Solid State PLC on Thursday said it expects its earnings to grew in the first half of its current financial year, thanks to "favourable" operational gearing.
The AIM-listed manufacturer of computing, power and communications products said the record trading performance achieved last year continued in the six months to the end of September. Solid State said it is on track to deliver annual earnings in line with forecasts.
The Redditch, UK-headquartered firm said sales for the first half are expected to show organic growth of 7.5% on a proforma basis, giving revenue in excess of GBP33 million, despite the heightened macroeconomic and political uncertainties of recent months. In the first half of its financial 2019, the company generated revenue of GBP23.5 million, meaning that it expects at least 40% growth year-on-year.
Solid State explained that its gross margins have benefited from GBP300,000 of foreign exchange tailwinds in the first half, with underlying margins having seen a slight improvement over the prior period.
As a consequence of favourable operational gearing, revenue growth and gross margin improvement, adjusted pretax profit for the period is expected to be GBP2.5 million, Solid State said, up 47% from GBP1.7 million reported a year prior.
Looking ahead, the company said its open order book as at September 30 stood at GBP36.5 million. In comparison, at the end of September 2018, the open order book stood at GBP36.2 million.
Solid State will report its interim results on December 3, it said.
The stock was trading 1.6% lower in London on Thursday at 483.00 pence a share.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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