Solid State Interim Profit Rises On Improved Margins From Weak Pound

LONDON (Alliance News) - Solid State PLC on Tuesday reported a rise in pretax profit, helped by improved margins in its first half due to a boost from the weak pound.

Solid State provides specialist computers, electronics components, antenna products, communications systems and battery power products for the electronics market.

For the half year to the end of September, Solid State reported pretax profit of GBP1.6 million, up from GBP1.5 million the year before, despite revenue declining to GBP20.1 million from GBP22.0 million.

Solid State's gross profit margins improved to 31.2% in the first half, compared to 27.7% in the same period of the previous year, helped by the depreciation of sterling and some forward currency hedges. "A continuing weakening of sterling would not result in a repeat of this benefit in the second half due of the year due to some limited US dollar exposure," the company said without providing further details.

Revenue in the recent half-year benefited from a GBP1.7 million contribution from the acquisition of battery business Creasefield. However, this was more than offset by the absence of GBP3.5 million in revenue recognised from a UK Ministry of Justice contract the prior year which terminated in February.

Solid State proposed an interim dividend of 4.0 pence, maintained from the previous year.

"Solid State has had a very positive first half. The acquired businesses are trading well in their respective sectors and contributing well to initiatives which will drive future organic growth," said Chairman Tony Frere in a statement.

"The group order backlog at 30 September 2016 was GBP14.8 million. Solid State has a strong balance sheet and a supportive bank which enables the group to confidently pursue future growth initiatives and acquisitions. The board is optimistic about Solid State's prospects," Frere added.

Shares in Solid State were down 5.6% at 425.00p on Tuesday.

By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews

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