Asia stocks spooked by Trump Greenland tariffs; China GDP offers mild support
Solid State Plc (LONDON:SOLI)’s FY15 results demonstrate the success of its growth strategy, with an impressive 35% year-on-year increase in adjusted pre-tax profits. The strategy is based on top-line growth through selective acquisitions, the addition of new product lines and entry into new industry verticals such as green energy and security solutions. This is combined with margin improvement through focus on value-added design and assembly capability and development of own-brand products such as high-output LED modules. The prospective P/E is currently slightly lower than the annualised mean for listed peers (15.1x vs 16.9x). A small premium may be justified given the potential for faster than average profits growth.
FY15 results show strong profits growth
Revenues rose by 14% despite exiting from c £2m low-margin, high-volume business in the LED market, which was inherited with the acquisition of 2001 Electronic Components (2k1). Gross margin rose 1.3pp to 30.5%. Pre-tax profit (adjusted for share option charges) grew by 35%, reflecting a full year’s contribution from 2k1 and Q-Par, which were acquired in December 2013 and May 2013 respectively, as well as organic revenue growth of around 4%. Citing strong cash generation (free cash flow totalled £1.0m, equivalent to 12.1p/share), management raised the dividend by 41%. Gearing was reduced by 2.7pp to 19.9%.
To Read the Entire Report Please Click on the pdf File Below