Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

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Equity Bottom-Up

Solid State’s H125 results are in line with consensus expectations and management’s guidance for the full year is unchanged. While trading has been affected by contract timing, the underlying growth and margin strategy remains intact, supported by Solid State’s recent acquisitions and investment in a new manufacturing facility.

Solid State’s H125 results are in line with consensus expectations and management’s guidance for the full year is unchanged. While trading has been affected by contract timing, the underlying growth and margin strategy remains intact, supported by Solid State’s recent acquisitions and investment in a new manufacturing facility.

Fundamental Analyses, Contrarian Cashflows

Contrarian Cashflows

Fundamental Analyses

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<ul>
<li>Today, Let’s get straight to the point. While I typically share insights about the broader investment landscape, today I need to address some unsettling news about one of our portfolio holdings: Solid State plc (SOLI).</li>
<li>On Friday, November 15th, the stock experienced a dramatic drop of nearly 50%, plunging from GBp 207.55 to GBp 110.00.</li>
<li>Although it managed to recover some of the losses, it still ended the session with a sharp 35% decline at GBp 135.06.</li>
</ul>


Today, Let’s get straight to the point. While I typically share insights about the broader investment landscape, today I need to address some unsettling news about one of our portfolio holdings: Solid State plc (SOLI).
On Friday, November 15th, the stock experienced a dramatic drop of nearly 50%, plunging from GBp 207.55 to GBp 110.00.
Although it managed to recover some of the losses, it still ended the session with a sharp 35% decline at GBp 135.06.


The delay of a major contract inevitably has an impact on short-term profitability. Solid State has a strong balance sheet and a growth strategy to develop into a higher value-added electronics components and systems business, as witnessed by the two recent small acquisitions. Post the current hiatus we expect this to drive growth and value creation.

The delay of a major contract inevitably has an impact on short-term profitability. Solid State has a strong balance sheet and a growth strategy to develop into a higher value-added electronics components and systems business, as witnessed by the two recent small acquisitions. Post the current hiatus we expect this to drive growth and value creation.

Solid State - Defence contract delay affects expectations

Management’s strategy is to increase Solid State’s internal capabilities, enabling greater product differentiation and value added, particularly in the Systems business. This is expected to increase the addressable market and growth along with offering higher returns, key to the margin target of 12% (FY25 expectation c 8%). Achieving this through organic and inorganic means underpins management’s 20% CAGR target for shareholder returns.

Management’s strategy is to increase Solid State’s internal capabilities, enabling greater product differentiation and value added, particularly in the Systems business. This is expected to increase the addressable market and growth along with offering higher returns, key to the margin target of 12% (FY25 expectation c 8%). Achieving this through organic and inorganic means underpins management’s 20% CAGR target for shareholder returns.

Solid State - H1 trading in line; guidance unchanged

Solid State is developing from a component manufacturer into a value-added electronics partner offering engineered solutions. Management expects this to drive additional growth and margin expansion, particularly in target markets, such as healthcare and defence, underpinning management’s objective for a c 20% CAGR in shareholder returns to 2030.

Solid State is developing from a component manufacturer into a value-added electronics partner offering engineered solutions. Management expects this to drive additional growth and margin expansion, particularly in target markets, such as healthcare and defence, underpinning management’s objective for a c 20% CAGR in shareholder returns to 2030.

Solid State - Record FY24; medium-term targets retained

United Kingdom

Solid State PLC distributes electronic components for use in the industrial, automotive, mobile phone, computer and military markets of the United Kingdom. The Company also provides technical support to its customers.  The Company has agreements to supply products to nine electronic components manufacturers, mainly into the UK market. ... More

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Solid State PLC (SOLI LN)

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Today, Let’s get straight to the point. While I typically share insights about the broader investment landscape, today I need to address some...

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Edison Investment Research

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Management’s strategy is to increase Solid State’s internal capabilities, enabling greater product differentiation and value added, particularly in...

Edison Investment Research

Solid State - Record FY24; medium-term targets retained

Solid State is developing from a component manufacturer into a value-added electronics partner offering engineered solutions. Management expects...

Edison Investment Research

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