Bullion bloodbath as gold heads for worst day in decades, silver worst day ever
Diversified platform gives resilience
The narrative of Solid State's (L:SOLI) interims describes how the diversified platform that management has created should be able to deliver another year of results at FY15’s record profit levels, despite delays in deliveries under a major contract with the Ministry of Justice (MoJ) for offender tagging and weakening markets. We leave our estimates unchanged and see fair value at 513p, based on our FY16e estimates.
Solid first half
H116 revenues grew by £4.9m (29%) year-on-year to £22.0m. This strong growth was attributable to the deliveries under the mobilisation phase of the MoJ contract and revenues from Ginsbury Electronics, which was acquired in April 2015. The antennae business was adversely affected by delays in a major airborne programme, and the distribution business by a shift to shorter-term ordering patterns. Reported PBT fell by 4% to £1.5m, reflecting substantially higher administrative costs and only modest margins relating to the first phase of the MoJ contract.
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