Revenue up as electronics group eyes further growth
Worcestershire electronics group Solid State has said it remains well positioned to double the size of its business over the next five years after a full year in which revenue rose.
The Redditch-based group said the financial year ended March 31, 2017 was a year of strategic investment to lay the foundations for future growth.
It said it had made progress by completing its re-organisation plan and had progressed strategic goals through the successful acquisition and integration of Creasefield, overcoming the loss of the Ministry of Justice electronic tagging contract, appointing two new executive directors, investing in its sales and marketing team, establishing a component sourcing and obsolescence team in its Distribution division, and completing a significant capital investment programme at its new secure communications facility in Leominster.
Group revenue from continuing operations of £40m was up 8.7% on the prior year £36.8m. The revenue delays it had faced on a number of the antenna projects were more than been offset by the additional batteries revenue from the Creasefield acquisition.
The group’s adjusted gross margin of 30.5% saw a marginal reduction of 0.6% compared to the 2016 margin of 31.1%. This reduction was said to reflect the impact of the changing mix of sales combined with the additional Creasefield sales, which are typically lower than the average margins for the Manufacturing division.
Adjusted operating profit from continuing operations was relatively flat at £3.2m, an increase of just £0.1m on the £3.1m in 2016. This translates to a slight increase in adjusted earnings per share from continuing operations of 32p (2016: 31.3p). Dividend was unchanged at 12p
The group balance sheet shows net assets of £16.6m (2016: £15.8m) and net cash of £0.9m (2016: leverage £3.8m).
The group said the balance sheet position put it in a strong position to make further strategic acquisitions and to generate organic growth.
Tony Frere, chairman of Solid State said: “The year has been very productive in laying the foundations for the future growth of the group. Our ambition is to double the size of the business over the next five years through a combination of organic and acquisitive growth.
“Activity levels are encouraging across both divisions. Leading edge indicators which include our open order book, which is at a record £20.67m and up 16% on the comparable period last year, our book to bill ratio, and our first quarter order intake, give the board confidence in the prospects for Solid State.”
