Solid State PLC (AIM:SOLI) saw its shares climb by over 7% after the company said it expects revenue and adjusted pre-tax profit for the 2023 financial year to be ahead of market forecasts, following strong trading in the first six months combined with additional foreign exchange benefits expected in the second half.
Adjusted pre-tax profit came in at around £5.0mln in the six months to 30 September 2022, up 54% from £3.25mln in the same period last year, the component supplier and manufacturer of computing, power and communications products said in a trading update.
Revenues rose 30% on a like-for-like constant currency basis to £59mln. Solid State said the strong dollar boosted first-half revenue by around £4.5mln.
The company said the integration of recently acquired US company Custom Power is well underway, with commercial collaboration progressing well, albeit at an early stage. The subsidiary’s order intake has been encouraging post-period end with the open order book now exceeding US$21mln, a record level for the business, Solid State noted.
The group’s order book stood at £112.5mln as of the end of September, up from £85.5mln six months earlier, reflecting a diversified geographic footprint and a broader product range.
The company said component supply lead times have started to shorten across some key suppliers, albeit that many lead times remain extended, and some devices remain in short supply.
The component supply cycle is expected to moderate going into the next financial year, benefiting both availability and supply lead times, it added.
The company said interest cost in the second half of the year is expected to be “significantly higher” than in the first six months.
Net debt is expected to be approximately £17.3mln, which includes cash at the bank of £14.1mln, less drawn bank facilities of £16mln and a deferred contingent consideration of £15.4mln.
Solid State shares were 7.55% higher at 1,140.00p in midmorning trade.