Manufacturer’s share price crashes to five-year low

Shares in Redditch manufacturer Solid State crashed 25% to a five-year low after it warned profits would be hit this year because “domestic suppliers are being preferred” in North America.

This shift is hitting its communications business, which supplies secure systems to sectors including aerospace, government, and oil and gas.

President Trump’s America first rhetoric and trade war with China are part of the protectionist shift seen in the USA in the last 18 months.

Solid State warned the stock market “securing overseas opportunities is proving harder than we anticipated” in its communications business, which generates a “significant proportion” of its sales from export.

Although the electronics manufacturer confirmed that it would meet market expectations for pre-tax profits for the year to March 2017, generating around £3m, it said the North American problems would create “a negative impact on margin mix for the group”.

Investors responded by dragging Solid State’s share price to 280p, its lowest closing price since December 2013.

In a statement, Solid State said: “The board is confident that its long-term strategy will continue to deliver organic growth which can be complemented by targeted acquisitions to meet its ambitions.

“The success of the organic growth strategy is now in evidence and the Board also continues to actively engage with potential acquisition targets that offer a complementary fit to the group product offering, client base and structure.”