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(Alliance News) - Shares rose in Solid State PLC on Tuesday, after it said that a strong start to its financial year has fostered confidence that profit for the year will be ahead of expectations.
Shares in the computing and power products manufacturer were 15% higher at 493.00 pence on Tuesday in London.
For the first four months to the end of July, Solid State said its trading was very strong and well ahead of budget. Revenue has largely remained in line with management expectations; however an acceleration of project work in the first half to date is set to benefit reported revenue and profit for the year.
As a result of the strong start, profit for the year ending March 2020 is expected to be significantly ahead of expectations. Revenue is expected to be in line with consensus forecasts; however opportunities remain to generate further sales later in the year.
Consensus estimates for the 2020 financial year gathered by Edison Investment Research has pretax profit at GBP3.7 million and revenue at GBP68.0 million. Solid State's pretax profit for financial 2019 was GBP2.8 million, on revenue of GBP56.3 million.
Solid State named other reasons for the expected profit increase, including production efficiencies, positive exchange rate gains, contributions from Pacer, which was acquired in November, and stronger than expected gross margins due to a favourable sales mix in the Manufacturing division.
"The board is very pleased with the start to the year, and to be upgrading profit expectations for the year, notwithstanding the heightened macroeconomic and political uncertainties of recent months. We look forward to updating further on trading and prospects in our trading update for the first half which will be released in late October," said Chief Executive Gary Marsh.
