Shares fall sharply after electronics group projects delayed

Solid State

Delays to a number of projects caused Solid State’s investors to take fright yesterday, causing its shares to drop 13%.

The Redditch electronics group had told shareholders that annual profits are likely to be in line with expectations, at more than £3m.

However Solid State said the final quarter had seen a number of projects within the higher margin antenna division being delayed, consequently the contribution from these projects was now expected in future periods.

Its shares, which had closed on Wednesday night at 502p, dropped to 434p in intra-day trading before closing last night at 455p – a 9.4% fall to its lowest close of 2017.

The group, which trades on the Alternative Investment Market, now has a market value of under £40m.

Solid State supplies specialist industrial/ruggedised computers, electronic components, advanced antenna products, communications systems and battery power solutions to the electronics market.

It is forecasting revenues of £39m for the year ending March 2017.

The other areas of the manufacturing business unit were said to have performed broadly in line with management’s expectations, with the distribution business performing slightly ahead of management’s expectations.

Reported pre-tax profit will be impacted by one-off costs arising from the re-organisation of the manufacturing division and the Creasefield acquisition costs of approximately £0.2m, it said.

The recent decision to cease development activity in Steatite’s SEMS (Steatite Electronic Monitoring Systems) business unit has also been cited.

“This unit will be treated as a discontinued activity in the year-end accounts and is expected to have attributable losses of approximately £0.5m. In addition, there are non-cash amortisation charges of acquisition intangibles of £0.2m,” it said in an update.

The division was badly affected by the Ministry of Justice’s decision last year to scrap a £34m electronic tagging contract with the firm.

The group said its order book looked healthier by comparison to the previous year, standing at £18.13m as against £16.45m.

Close