TIDMSOLI
RNS Number : 6315V
Solid State PLC
05 December 2023
05 December 2023
Solid State plc
( "Solid State", the " Group " or the "Company" )
Interim Results
Analyst Briefing & Investor Presentation
Solid State plc (AIM: SOLI), the specialist value added
component supplier and design-in manufacturer of computing, power,
and communications products, is pleased to announce its Interim
Results for the six months ended 30 September 2023.
Highlights in the period include:
H1 2023/24 H1 2022/23 Change
Revenue GBP88.1m GBP59.4m +48%
Operating profit margin 7.9% 7.5% +40bps
Adjusted operating profit margin* 9.2% 9.3% -10 bps
Profit before tax GBP6.1m GBP4.2m +45%
Adjusted profit before tax* GBP7.3m GBP5.2m +39%
Diluted earnings per share 39.1p 36.4p +7%
Adjusted diluted earnings per share 46.8p 45.3p +3%
Interim dividend 7.0p 6.5p +8%
Net cash flow from operating activities GBP8.3m GBP0.50m +1,560%
* Adjusted performance metrics are reconciled in note 5, the
adjustments relate to IFRS 3 acquisition amortisation, share based
payments charges and non-recurring charges in respect of
acquisition costs and fair value adjustments.
H1 2023/24 H1 2022/23 Change
Net cash / (net debt)** GBP(3.9)m GBP(16.1)m -76%
Open order book @ 30 September 2023 / 30
September 2022 GBP99.7m GBP112.5m -11%
** Net cash / debt includes net cash with banks GBP8.8m (H1
2022/23: GBP16.0m), bank loans of GBP12.7m (H1 2022/23: GBP17.7m)
the fair value of deferred contingent consideration of GBPnil (H1
2022/23: GBP14.4m) and excludes the right of use lease liabilities
of GBP1.8m (H1 2022/23: GBP2.7m).
Financial highlights:
-- Delivered organic revenue growth in excess of 35% while
maintaining operating margins at 9.2% (FY23 9.2%)
-- Strong cash generation results in net debt continuing to reduce to GBP3.9m (FY23 GBP8.1m)
-- Robust orderbook of GBP108.6m at 31 October 2023 combined
with a strong prospect pipeline, gives the Directors confidence in
meeting full year consensus analyst expectations(1) .
Commercial and operational highlights:
-- US Components restructure and Custom Power integration activities are largely complete.
-- Rebranding of Components division sales channel under the
"Solsta" brand launched at the beginning of H2 with group branding
refresh to follow next year.
-- The pipeline of new design wins across the Group remains
strong in all target markets, which gives the Board confidence that
the underlying growth drivers in our target markets remain.
Commenting on the results and prospects, Nigel Rogers, Chairman
of Solid State, said:
"We continue to work with customers to leverage our specialist
design-in capabilities, placing the Group in a strong position,
both regionally and globally, in our target growth markets. Solid
State remains ambitious with a growth strategy focused on
developing Group talent, product innovation and further
internationalisation of our operations to deliver on our 2030
goals.
"The performance in the Period reflects a very pleasing out-turn
given the broader economic and geopolitical influences."
(1) The Company considers the average of the most recently
published research forecasts prior to this announcement by all
providers - Cavendish Capital Markets Ltd and WH Ireland plc to
represent market expectations for Solid State.
Market Expectations FY23/24 FY24/25
Revenue GBP155.3m GBP152.3m
Adjusted profit before GBP12.5m GBP12.5m
tax*
Net (debt) / cash (GBP3.0m) GBP1.0m
Analyst Briefing: 2.00 p.m. today, Tuesday 5 December 2023
A hybrid briefing for Analysts will be hosted by Gary Marsh,
Chief Executive, and Peter James, Group Finance Director, at 2.00
p.m. today, Tuesday 5 December 2023 to review the results and
prospects. Analysts wishing to attend should contact Walbrook PR on
solidstate@walbrookpr.com or on 020 7933 8780. Please include
whether you would like to attend in person at 75 King William St,
EC4N 7BE, or online.
Investor Presentation: 10.30 a.m. on Wednesday 6 December
2023
Gary Marsh, Chief Executive; Peter James, Group Finance
Director; and, John Macmichael, Managing Director of Solsta, the
Group's components division, will hold a presentation to cover the
results and prospects at 10.30 a.m. on Wednesday 6 December 2023.
The presentation will be hosted through the digital platform
Investor Meet Company. Investors can sign up to Investor Meet
Company for free and add to meet Solid State plc via the following
link
https://www.investormeetcompany.com/solid-state-plc/register-investor
. Investors who have already registered and added to meet the
Company will automatically be invited.
Questions can be submitted pre-event to
solidstate@walbrookpr.com , or in real time during the presentation
via the "Ask a Question" function.
Investor Site Visits to Head Office in Redditch
Solid State holds site visits to its head office in Redditch
where operations from both the Systems and Components divisions can
be seen. Interested investors should contact
solidstate@walbrookpr.com .
This announcement contains inside information for the purposes
of Article 7 of the UK version of Regulation (EU) No 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended ("MAR"). Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
For further information please contact:
Solid State plc Via Walbrook
Gary Marsh - Chief Executive
Peter James - Group Finance Director
Cavendish Capital Markets Limited
(Nominated Adviser & Broker)
Adrian Hadden / Callum Davidson (Corporate
Finance)
Jasper Berry / Tim Redfern (Sales) 020 7397 8900
Walbrook PR (Financial PR) 020 7933 8780
Tom Cooper / Nick Rome / Joe Walker 0797 122 1972
solidstate@walbrookpr.com
Analyst Research Reports: For further analyst information and
research see the Solid State plc website:
https://solidstateplc.com/research/
Notes to Editors:
Solid State plc (SOLI) is a value added electronics group
supplying commercial, industrial and defence markets with durable
components, assemblies, manufactured units and power units for use
in specialist and harsh environments. The Group's mantra is -
'Trusted technology for demanding environments'. To see an
introductory video on the Group - https://bit.ly/3kzddx7
Operating through two main divisions: Systems (Steatite, Active
Silicon & Custom Power) and Components (Solsta, Pacer, Willow
Technologies & AEC); the Group specialises in complex
engineering challenges often requiring design-in support and
component sourcing for computing, power, communications,
electronic, electro-mechanical and opto-electronic products.
Headquartered in Redditch, UK, Solid State employs approximately
400 staff across the UK and US, serving specialist markets with
high barriers to entry in industrial, defence and security,
transportation, medical and energy.
Solid State was established in 1971 and admitted to AIM in June
1996. The Group has grown organically and by acquisition - having
made three acquisitions in the last three years.
CHAIRMAN'S FIRST HALF REVIEW
I am pleased to report that in the six months ended 30 September
2023 ("First Half", "Period" or "H1 2023/24") the Group has had a
record start to the year.
The Group's strategy and focus on ensuring we have sector,
product, and customer diversity to provide a resilient business
model has continued to prove its value and delivered significantly
improved organic revenue growth in the Period.
The geopolitical environment continues to drive government
spending in security and defence, with Group revenue in these
sectors continuing to increase, including the successful delivery
of the previously reported NATO contracts.
Furthermore, the Group has seen good cash generation in the
first half of the year, and we anticipate this continuing into the
second half as lead times continue to improve, and we look to
benefit from the associated working capital unwind.
Solid State has been successful in building on its relationships
with Tier 1 customers across our target growth markets of security
and defence, medical, transport, and industrial where we have seen
design and contract wins with certain larger ones announced during
the Period.
Environmental Social and Governance ("ESG")
ESG is at the core of Solid State's strategy, creating a
long-term sustainable business, which minimises our adverse impact
on the environment and maximises value for our stakeholders.
Our technology, products and systems are designed and engineered
to be high quality, often upgradable with a long life, which
inherently means we are starting from a strong position. These
characteristics help to differentiate us from our competitors and
enable us to be ambitious in how we operate, where we believe we
are a business leading on ESG in our sector.
For example, the Group is decommissioning an energy intensive
production line within its US operation, which will consequently
greatly reduce its CO(2) emissions.
Our ESG Committee continues to improve our communication with
stakeholders to articulate our ESG strategy and deliver on our
goals, including achieving net zero in Scope 1 and 2 emissions by
2050.
Board and leadership team
During the Period, we welcomed Sam Smith as an independent
Non-Executive Director to the Board of Directors with effect from 1
August 2023. Sam will sit on the Audit and Remuneration
Committees.
Peter Haining stood down as Non-Executive Director at the Annual
General Meeting ("AGM") earlier in the year but will continue to
serve as Company Secretary in the near term to ensure a smooth
transition.
The Board will seek to appoint a further independent
Non-Executive Director in the coming year.
We need to continue to develop talent within our senior
leadership team. Recruiting additional people in a still relatively
tight labour market elongates the process more than we would like.
However, we have made good progress in the Period, developing the
team, which puts the Group in a stronger position for the
future.
Outlook
The industry has seen lead times improving in many areas,
however, certain "golden components" where demand is particularly
high continue to dictate operational schedules.
As expected, defence and security aside, the improving component
lead times has resulted in the orderbook beginning to normalise as
customers focus on managing working capital.
The pipeline of new design wins across the Group remains strong
in all target markets, which gives the Board confidence that the
underlying growth drivers in our target markets remain.
Post Period-end we have seen strong order intake with the open
orderbook at the end of October increasing from the half-year
position of GBP99.7m to GBP108.6m (30 September 2022:
GBP112.5m).
As previously reported, it is encouraging to see the development
of multi-product, multi-year programmes with international
blue-chip clients. This is testament to the work done over the last
five years to develop the Group's product and service offering,
making Solid State ever more relevant and valuable to its
customers.
The record billings, combined with a stable six month orderbook,
gives the Board confidence in meeting the full-year expectations
for FY23/24.
We are continuing the execution of our strategy to achieve our
mid-term strategic goals. The Board has set goals to 2030 and
committed to seeking to maintain compound growth in Total
Shareholder Return ("TSR") in excess of 20%. This record start
provides a strong foundation to achieve this ambition in
FY23/24.
Nigel Rogers
Non-Executive Chairman
5 December 2023
CHIEF EXECUTIVE OFFICER'S REVIEW
I am pleased to report that the Group has delivered record
financial results for the Period with progress in the execution of
its growth strategy, building on the strong performance we have
seen over recent years.
Performance
The Group's long-standing relationships, commitment to customer
service, and a proactive approach to managing the semiconductor
supply chain challenges has meant we have invested in, and secured,
inventory in partnership with our customers. This has enabled us to
deliver revenues in the First Half to meet customer requirements,
which we did not expect to be able to fulfil until the Second
Half.
As a result of shipping this additional product, the full period
of contribution from Custom Power, as well as the GBP23.4m NATO
contracts, the First Half organic revenue growth in excess of 35%
on a constant currency basis is exceptionally strong.
On a full-year basis we expect to deliver strong organic revenue
growth exceeding 15%, which will be in line with recently upgraded
consensus revenue expectations. Group adjusted operating margins
are a key metric. Despite the dilution in mix with the NATO
contracts, adjusted operating margins have been maintained at 9.2%
as a result of the operational gearing from the strong billings
pulled forward. Where H2 billings are expected to return to more
normalised levels, the operational gearing means we may see slight
dilution on a full-year basis, however, there is potential for this
to be mitigated by a stronger mix in the Second Half.
Following the share issue on the acquisition of Custom Power in
August 2022, I am pleased to report a 3.3% growth in adjusted
diluted earnings per share over the prior year's record result
46.8p (H1 2022/23: 45.3p).
Strategy
Solid State's growth strategy combines organic and acquisitive
growth to actively target strategic customers in sectors with high
barriers to entry that require accreditations, long standing
credibility, and specialist skills and experience where our
technology adds tangible value.
The Group's key target markets include industrial, security and
defence, medical, transport, and energy.
Our four strategic pillars to drive growth remain:
-- Talent development embedding our ESG values;
-- Broadening our complementary product and technology portfolio;
-- Development of our "own brand" components and systems
offering, securing recurring revenue; and
-- Internationalisation of the Group.
The following key milestones represent critical steps in the
delivery of our strategy, and are cornerstones on which our 2030
plans and ambitions will continue to build:
-- With the appointment of Sam Smith as an independent
Non-Executive Director ("NED") we have continued to progress our
governance and leadership team structure to position the Group for
the next phase of growth;
-- As part of our environmental strategy, the decommissioning of
production for certain legacy products is now well advanced;
-- Launched the rebranding of our components division, which is
now trading as "Solsta" with a consistent Group brand refresh to
follow during the Second Half;
-- Delivered strong cash generation to settle deferred
consideration and pay down the Group's borrowings to position the
Group for future investments; and
-- Developed our technical capabilities and expertise to enhance the relevance and value-added differentiation of our offering to our Tier 1 customers.
Markets and Divisional review
During the Period, the Group has seen good demand and increased
billings for Internet of Things ("IoT") communications components
from customers in the energy and utilities sector, within our
industrial market.
Furthermore, the design and pipeline development within the
medical sector has been building with activity strong across both
divisions, including exciting new engineering projects and design
wins, which are expected to translate into production demand as we
head into FY24/25 and beyond.
The Components division delivered revenue of GBP31.4m (H1
2022/23: GBP35.3m), an 11.2% decrease on the prior year. FY22/23
was an exceptional year that ended 31.5% (GBP16.5m) up on FY21/22
after record customer demand, facilitated by the Division's
investment to secure product driven by the component shortages and
Covid-19 impact. This pulled forward demand to H1 2022/23 from H2
2022/23 and FY23/24 with some customers now destocking.
Post Period-end, the Division has launched new branding to trade
as "Solsta" and continues to raise awareness of the Durakool
product brand as the Group focuses on current technology for growth
markets. In addition, the team has made good progress in enlarging
the global third-party sales network and the internal support
resources to drive future growth.
Our System's division revenue increased by 136.2% to GBP56.7m
(H1 2022/23: GBP24.0m). As reported in November 2022, the Systems
division secured contract wins to supply communications equipment
to a client in the defence sector through NATO. These contracts
have been shipped in the Period driving the year-on-year growth, in
addition to a full Period of Custom Power, delivering a very strong
first half to the FY23/24.
While these contracts have diluted the margin mix within the
Systems business in the Period, they have contributed significantly
to the record start to the year and provide a foundation for
long-term recurring revenue in this sector as the Group targets
"through-life" support opportunities.
Having completed the acquisition of Custom Power in August 2022,
the US integration activities are largely complete; we received US
regulatory sign off on the export control environment enabling
efficient collaboration with the UK battery team.
The business performance continues to be consistent with
management expectations and has been resilient in the face of some
customer push outs/destocking. Positively, margins continue to
improve year on year (mitigating the destocking impact) where we
are realising commercial and operational best practice
synergies.
We are continuing to look at adding technical and commercial
talent both in the UK and the USA to boost the drive for
sustainable growth.
Pleasingly, post Period-end we have secured a design and build
programme for a smart battery in a hand held industrial device with
a new global client. Our international capabilities have opened the
opportunity for increased work share. We have commenced the design
and engineering phases, with US deliveries scheduled to commence
later in FY24/25. Opportunities for an enterprise charging solution
and transfer of technology to our UK facility are now underway.
Branding and Market positioning
As the Solid State Group has grown and expanded over the years,
it has made a number of acquisitions, each of which has brought
huge benefits in terms of people and capability. Solid State's core
values and strengths have remained the same, but the resulting
amalgamation of companies and brands has increased the complexity
of how the Group articulates "who it is, what it does and why it is
unique and different from its competitors".
A Group-wide exercise to ensure the branding and web presence
reflects the qualities of the Group and positions the operating
units suitably is under way to maximise market penetration and
cross-selling opportunities. The recently announced rebranding of
the Components division under the trading name of "Solsta" is a
first step in this exercise.
We are making good progress on the project to adopt the Custom
Power brand across the Group's Power offering, which is expected to
be completed during FY24/25.
People and leadership development
In the First Half we have seen several internal promotions, with
close to 25% of vacancies being filled from internal talent. We
continue to invest in new talent as well as adding depth to our
senior team across the Group, including five heads in engineering
as well as two senior heads to our Power business unit leadership
team. Continued investment in our people and developing our Group
leadership team is a critical driver for future growth as we strive
to replicate recent successes.
The work of the ESG Committee is enhancing internal
communications through our HR roadshows and our wellbeing
initiatives, including a hardship fund and occupational health
support. We have also established a Group Executive Committee
ensuring our leadership structure enables us to deliver the next
phase of the Group's growth.
M&A
The Board continues to actively explore attractive acquisition
opportunities across target markets both overseas and in the UK,
and the pipeline of opportunities is strong. We had several
opportunities that were investigated, which through initial due
diligence we did not progress as the opportunity did not meet our
requirements.
However, we also do have others that remain of interest, and we
are continuing to pursue. The acquisition pipeline for both
Divisions is healthy with particular focus on adding technology and
further internationalisation of the Group.
Gary Marsh
Chief Executive Officer
5 December 2023
KEY PERFORMANCE INDICATORS
The following key performance indicators are used by the Group
to monitor performance, working capital and forward prospects.
Alternative/Adjusted Performance Measures ("APMs"), identified
as "adjusted", are applied consistently throughout this report.
APMs are reconciled to the statutory UK-adopted IFRS measures in
Note 5. Note 30 to the 2023 Annual Report and Accounts defines APMs
and includes a narrative disclosure of the basis of recognition of
the APMs and the impact of the differences compared to the
statutory measures. All APMS are identified in this document as
"adjusted" throughout and any measure not flagged as "Adjusted" is
the statutory IFRS measure.
Revenue (million)
GBP88.1m
Definition
Revenue is measured as the value, net of sales taxes, of goods
sold and services provided to customers.
Reason for choice
This is a key driver for the business, enabling us to track our
progress in driving growth.
Adjusted operating margin (%)
9.2%
Definition
Earnings before interest, tax, amortisation of acquired
intangibles, acquisition costs and other adjustments for one-off
non-recurring items divided by revenue.
Reason for choice
Adjusted operating profit margin provides a consistent
year-on-year measure of the trading performance of the Group's
operations to enhance the quality of the earnings.
Cash generated from operations (million)
GBP9.1m
Definition
Cash flow for operating activities excluding investing and
financing activities.
Reason for choice
This provides a measure of the cash generated by the Group's
trading and provides visibility of the cash impact of the working
capital investment decisions. It represents the cash that is
generated to fund capital expenditure, interest payments, tax and
dividends.
Adjusted profit before tax (million)
GBP7.3m
Definition
Profit before taxation, amortisation of acquired intangibles,
acquisition-related costs and charges, share-based payments and
other adjustments for one-off non-recurring items.
Reason for choice
This measure is the critical metric that the operational
management control and influence delivering profit to drive the
total return achieved for shareholders.
Net debt (million)
GBP(3.9)m
Definition
Cash less borrowings, less deferred and contingent consideration
obligations excluding right-of-use lease obligations.
Reason for choice
The Group has financial covenants agreed with its lenders that
are based on this definition of net debt, making it a KPI monitored
to ensure compliance. Furthermore, net debt is used to monitor the
Group's leverage position and ensure the Group maintains an
appropriate capital structure.
Book to bill ratio (rolling 12 months)
0.95
Definition
Last twelve months ("LTM") revenue divided by LTM order
intake.
Reason for choice
Monitoring the book to bill ratio provides a metric to monitor
growth in the open orderbook and, therefore, the prospects for
sustainable growth. While the LTM basis does eliminate some of the
short-term month-to-month volatility it should not be monitored in
isolation from the absolute revenue and open orderbook as
variations in bookings and billings will impact the ratio.
Profit before tax (million)
GBP6.1m
Definition
Profit before taxation.
Reason for choice
This measure is the critical statutory metric that the
operational management control and influence delivering profit to
drive the total return achieved for shareholders.
CHIEF FINANCIAL OFFICER'S REVIEW
Record organic revenue growth in the First Half reflects prudent
semiconductor strategy, strong customer demand and the delivery of
GBP23.4m of product fulfilling the NATO contracts announced in
November 2022, driving continued strong operating cash generation
of GBP8.3m.
Revenue
The Group delivered revenue in the Period of GBP88.1m (H1
2022/23: GBP59.4m), up 48.3% on the prior period.
The impact of currency has been a revenue headwind of circa
GBP1.0m with the average USD rate for the Period being $1.26:GBP1
(H1 2022/23: $1.21:GBP1), offset by the full year of Custom Power,
which means like-for-like organic revenue growth is in excess of
35%.
Gross margins
Underlying product margins in the First Half have been stable
across the Group, albeit as previously reported, the mix has been
diluted by the NATO billings. This results in the gross margins in
the Period being GBP27.3m (H1 2022/23: GBP18.8m) with the margin
percentage down 0.6ppt at 31.0% (H1 2022/23: 31.6%).
Overheads
The current year increase reflects a full six months of Custom
Power overheads (two months in H1 2022/23) in addition to increased
employee costs reflecting the impact of wage inflation combined
with investments in talent made in the second half of the prior
year and the first half of this year.
In addition, we have incurred approximately GBP0.5m to date in
relation to the closure of AEC production lines where legacy
end-of-life devices have been migrated to modern technology
solutions.
This results in sales, general and administrative expenses being
up GBP6.1m at GBP20.4m (H1 2022/23: GBP14.3m).
Operating margin
Adjusted performance metrics that provide clarity over the
Group's performance on an ongoing cash basis are consistent with
previous periods and adjust for the amortisation of acquisition
intangibles, non-recurring tax credits, acquisition fees and share
option expenses.
The Group has seen an operational gearing benefit from the
strong revenues, mitigating the modest dilution of the gross margin
as a result of the change in mix, which means our operating margins
continue to hold up well at 7.9% (H1 2022/23 7.5%). Adjusted
operating margins 9.2% (H1 2022/23: 9.3%).
PBT
Adjusted profit before tax ("PBT") has increased to GBP7.3m up
38.8% (H1 2022/23: GBP5.2m). Profit before tax was GBP6.1m (H1
2022/23: GBP4.2m).
Tax
The year-on-year effective tax rate has increased to 25.6% (H1
2022/23: 20.2%). This is principally as a result of the UK
corporate tax rate increasing from 19% to 25%, combined with the
increased size and profitability of the Group, meaning we are now
in the large company R&D tax credits scheme. The benefits from
the R&D tax credits are now reflected in operating margins
rather than the tax line.
PAT
Adjusted profit after tax ("PAT") has increased to GBP5.4m up
29.7% (H1 2022/23: GBP4.2m). Profit after tax was GBP4.5m (H1
2022/23: GBP3.3m).
EPS
A strong start to our financial year results in adjusted diluted
earnings per share ("EPS") at 46.8p (H1 2022/23: 45.3p) and with
basic EPS of 39.7p (H1 2022/23: 37.2p).
Dividend
The Board is committed to maintaining a progressive dividend
policy as part of delivering growth in shareholder returns, albeit
with the recent acquisitions and the growth ambitions, dividends
are expected to continue to be a smaller component of total
shareholder returns.
Given the strong trading performance in the First Half and
prospects for the full year, the Board has decided to declare an
increase in the interim dividend up 7.7% to 7p per share (H1
2022/23: 6.5p).
The interim dividend will be paid on 16 February 2024 to
shareholders on the register at the close of business on 26 January
2024. The shares will go ex-dividend on 25 January 2024.
Cashflow
Operating cash
Operating cash generation in the First Half has been a key area
of focus for the management team. The inflow of cash from operating
activities was GBP8.3m (H1 2022/23 GBP0.5m) reflecting the impact
of working proactively to manage working capital, combined with a
very strong period of trading, giving an adjusted operating cash
conversion of 102% (H1 2022/23: 9%).
Investing activities
Capex has maintained broadly in line with prior years at GBP1.3m
reflecting continued maintenance expenditure across the Group with
the primary project in the First Half being a refurbishment of the
Crewkerne Power engineering and sales offices, modernising the
facility.
In the First Half we have settled the year-end deferred
contingent consideration liability of GBP5.5m in relation to Active
Silicon and Custom Power in full.
Financing activities
Underpinned by the strong cash generation during the First Half,
we have seen repayment of GBP0.6m of term loans and GBP1.4m of the
Group's revolving credit facility ("RCF").
The First Half saw the final dividend payment of GBP1.5m, which
in the prior year was paid in the Second Half.
Statement of financial position
Inventory
Inventory levels across the Group have started to reduce from
year-end highs of GBP33.2m to GBP27.7m (H1 2022/23: GBP24.9m). Last
time builds arising from discontinuing legacy products has resulted
in a higher level of inventory at the half year, which is expected
to unwind through the Second Half and in the early part of
FY24/25.
Receivables
Receivables at the half year were GBP20.7m (H1 2022/23:
GBP24.7m; FY22/23: GBP19.7m) higher than the year-end, reflecting
the strong billings in the First Half and the impact of a number of
pull-ins where we were able to secure stock to fulfil customer
demand.
Net assets
The strong trading performance has seen net assets increase from
the year-end of GBP58.0m to GBP61.8m (H1 2022/23: GBP60.5m). The
foreign currency translational impact recognised in reserves the
First Half was GBP0.7m (H1 2022/23: GBP2.9m).
Net debt
We saw net debt reduce from GBP8.1m at year-end to GBP3.9m (H1
2022/23: GBP16.1m) reflecting positive cash generation in the First
Half.
The settlement of the year-end deferred contingent consideration
liabilities in full means that at Period-end net debt comprises
cash with banks of GBP8.8m and borrowings of GBP12.7m.
Statement of Directors' responsibilities
The Directors confirm that this condensed consolidated interim
financial information has been prepared in accordance with
International Accounting Standard 34, "Interim Financial
Reporting", as set out in the basis of preparation paragraph within
the accounting policies, and that the interim management report
herein includes a fair review of the information required by DTR
4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the first six months, and their impact on the condensed
consolidated interim financial information, and a description of
the principal risks and uncertainties for the remaining six months
of the financial year; and
-- material related party transactions in the first six months
and any material changes in the related party transactions
described in the last annual report.
Forward-looking statements
Certain statements in this Half-Year Report are forward-looking.
Although the Group believes that the expectations reflected in
these forward-looking statements are reasonable, we can give no
assurance that these expectations will prove to be correct. Because
these statements involve risks and uncertainties, actual results
may differ materially from those expressed or implied by these
forward-looking statements. We undertake no obligation to update
any forward-looking statements whether arising as a result of new
information, future events or otherwise.
Peter James
Chief Financial Officer
5 December 2023
INTERIM CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHSED 30 SEPTEMBER 2023
Unaudited Unaudited
Six months Six months Audited
to to Year to
30 Sept 30 Sept 31 Mar
23 22 23
Continuing operations GBP'000 GBP'000 GBP'000
----------------------------------------------------- ----------- ----------- --------
Revenue 88,125 59,357 126,503
Cost of sales (60,830) (40,588) (86,829)
----------------------------------------------------- ----------- ----------- --------
Gross profit 27,295 18,769 39,674
----------------------------------------------------- ----------- ----------- --------
Sales, general and administration expenses (20,360) (14,296) (30,266)
----------------------------------------------------- ----------- ----------- --------
Profit from operations 6,935 4,473 9,408
----------------------------------------------------- ----------- ----------- --------
Finance costs (871) (291) (972)
----------------------------------------------------- ----------- ----------- --------
Profit before taxation 6,064 4,182 8,436
----------------------------------------------------- ----------- ----------- --------
Taxation expense (1,551) (843) (1,746)
----------------------------------------------------- ----------- ----------- --------
Adjusted profit after taxation 5,396 4,160 8,553
Adjustments to profit (883) (821) (1,863)
----------------------------------------------------- ----------- ----------- --------
Profit after taxation 4,513 3,339 6,690
----------------------------------------------------- ----------- ----------- --------
Profit attributable to equity holders of the
parent 4,502 3,343 6,693
Profit/(loss) attributable to non-controlling
interests 11 (4) (3)
----------------------------------------------------- ----------- ----------- --------
Other comprehensive (loss)/ income - FX on
overseas operations 652 2,905 (869)
Other comprehensive (loss)/ income - taxation (65) - (94)
----------------------------------------------------- ----------- ----------- --------
Adjusted total comprehensive income for the
period 6,048 7,065 7,684
Adjustments to total comprehensive income (948) (821) (1,957)
----------------------------------------------------- ----------- ----------- --------
Total comprehensive income for the period 5,100 6,244 5,727
----------------------------------------------------- ----------- ----------- --------
Comprehensive income attributable to equity
holders of the parent 5,089 6,248 5,730
Comprehensive income attributable to non-controlling
interests 11 (4) (3)
----------------------------------------------------- ----------- ----------- --------
Earnings per share (see Note 6)
Basic EPS from profit for the period 39.7p 37.2p 64.5p
Diluted EPS from profit for the period 39.1p 36.4p 63.1p
----------------------------------------------------- ----------- ----------- --------
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 SEPTEMBER 2023 (UNAUDITED)
Shares
Share Foreign Capital held Non-
Share premium exchange redemption Retained in controlling Total
capital reserve reserve reserve earnings treasury Total interests equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
Balance at 31
March 2022 428 3,625 33 5 23,042 (57) 27,076 - 27,076
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
Issue of new
shares 138 26,850 - - - - 26,988 - 26,988
Dividends - - - - - - - - -
Transactions
with
non-controlling
interests - - - - - - - 50 50
Share-based
payment
credit - - - - 113 - 113 - 113
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
Transactions
with
owners in their
capacity as
owners 138 26,850 - - 113 - 27,101 50 27,151
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
Result for the
period - - - - 3,343 - 3,343 (4) 3,339
Foreign exchange - - 2,905 - - - 2,905 - 2,905
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
Total
comprehensive
income - - 2,905 - 3,343 - 6,248 (4) 6,244
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
Balance at 30
September 2022 566 30,475 2,938 5 26,498 (57) 60,425 46 60,471
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
Issue of new
shares 1 (1) - - - - - - -
Transfer of
treasury
shares to All
Employee
Share Plan - - - - (152) 152 - - -
Dividends - - - - (2,235) - (2,235) - (2,235)
Share-based
payment
credit - - - - 438 - 438 - 438
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
Transactions
with
owners in their
capacity as
owners 1 (1) - - (1,949) 152 (1,797) - (1,797)
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
Result for the
period - - - - 3,350 - 3,350 1 3,351
Other
comprehensive
income - - - - (94) - (94) - (94)
Foreign exchange - - (3,774) - - - (3,774) - (3,774)
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
Total
comprehensive
income - - (3,774) - 3,256 - (518) 1 (517)
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
Purchase of
treasury
shares - - - - - (203) (203) - (203)
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
Balance at 31
March 2023 567 30,474 (836) 5 27,805 (108) 57,907 47 57,954
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
Dividends - - - - (1,529) - (1,529) - (1,529)
Share-based
payment
credit - - - - 243 - 243 - 243
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
Transactions
with
owners in their
capacity as
owners - - - - (1,286) - (1,286) - (1,286)
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
Result for the
period - - - - 4,502 - 4,502 11 4,513
Other
comprehensive
income - - - - (65) - (65) - (65)
Foreign exchange - - 652 - - - 652 - 652
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
Total
comprehensive
income - - 652 - 4,437 - 5,089 11 5,100
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
Balance at 30
September 2023 567 30,474 (184) 5 30,956 (108) 61,710 58 61,768
---------------- -------- -------- --------- ----------- ---------- --------- --------- ------------ --------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2023
Unaudited Unaudited Audited
as at as at as at
30 Sept 30 Sept 31 Mar
23 22 23
GBP'000 GBP'000 GBP'000
------------------------------------------------ --------- --------- --------
Assets
Non-current assets
Intangible assets 40,858 47,198 41,563
Property, plant and equipment 4,939 4,838 4,718
Right-of-use lease assets 1,792 2,652 1,981
Deferred tax asset 305 3,143 375
------------------------------------------------ --------- --------- --------
Total non-current assets 47,894 57,831 48,637
------------------------------------------------ --------- --------- --------
Current assets
Inventories 27,704 24,940 33,228
Trade and other receivables 20,656 24,711 19,699
Cash and cash equivalents - on deposit - 8,929 4,032
Cash and cash equivalents - available on demand 8,812 7,117 8,192
------------------------------------------------ --------- --------- --------
Total current assets 57,172 65,697 65,151
------------------------------------------------ --------- --------- --------
Total assets 105,066 123,528 113,788
------------------------------------------------ --------- --------- --------
Liabilities
------------------------------------------------------ -------- -------- --------
Current liabilities
Trade and other payables (16,298) (17,040) (23,735)
Deferred and contingent consideration on acquisitions
- current - (14,414) (5,679)
Current borrowings (1,351) (2,122) (1,279)
Contract liabilities (7,323) (5,209) (5,380)
Corporation tax liabilities (1,578) (1,312) (1,110)
Right of use lease liabilities (1,118) (1,338) (1,057)
Provisions - current (327) - (323)
------------------------------------------------------ -------- -------- --------
Total current liabilities (27,995) (41,435) (38,563)
------------------------------------------------------ -------- -------- --------
Non-current liabilities
Non-current borrowings (11,354) (15,628) (13,383)
Provisions (892) (717) (715)
Deferred tax liability (2,339) (3,867) (2,187)
Right-of-use lease liabilities (718) (1,410) (986)
------------------------------------------------------ -------- -------- --------
Total non-current liabilities (15,303) (21,622) (17,271)
------------------------------------------------------ -------- -------- --------
Total liabilities (43,298) (63,057) (55,834)
------------------------------------------------------ -------- -------- --------
Total net assets 61,768 60,471 57,954
------------------------------------------------------ -------- -------- --------
Share capital 567 566 567
Share premium reserve 30,474 30,475 30,474
Capital redemption reserve 5 5 5
Foreign exchange reserve (184) 2,938 (836)
Retained earnings 30,956 26,498 27,805
Shares held in treasury (108) (57) (108)
------------------------------------------------------ -------- -------- --------
Capital and reserves attributable to equity
holders of the parent 61,710 60,425 57,907
Non-controlling interests 58 46 47
------------------------------------------------------ -------- -------- --------
Total equity 61,768 60,471 57,954
------------------------------------------------------ -------- -------- --------
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 SEPTEMBER 2023
Unaudited Unaudited
Six months Six months Audited
to to Year to
30 Sept 30 Sept 31 Mar
23 22 23
GBP'000 GBP'000 GBP'000
---------------------------------------------------- ----------- ----------- --------
Operating activities
Profit before taxation 6,064 4,182 8,436
Adjustments for:
Property, plant and equipment depreciation 782 458 1,159
Right-of-use asset depreciation 529 433 965
Amortisation 1,370 922 2,035
Profit on disposal of property, plant and equipment - (19) (45)
Impairment of property, plant and equipment 246 - -
Share-based payment expense 243 113 551
Finance costs 871 291 972
Recognition of increase in deferred contingent
consideration - - (326)
---------------------------------------------------- ----------- ----------- --------
Profit from operations before changes in working
capital and provisions 10,105 6,380 13,747
---------------------------------------------------- ----------- ----------- --------
Decrease/(Increase) in inventories 5,600 (3,370) (12,457)
(Increase)/Decrease in trade and other receivables (887) (2,736) 1,767
(Decrease)/Increase in trade and other payables (5,709) 305 6,380
---------------------------------------------------- ----------- ----------- --------
Cash generated from operations 9,109 579 9,437
Income taxes paid (858) (79) (573)
Income taxes recovered - - 184
---------------------------------------------------- ----------- ----------- --------
Net cash flows from operating activities 8,251 500 9,048
---------------------------------------------------- ----------- ----------- --------
Investing activities
Purchase of property, plant and equipment (1,040) (730) (1,145)
Capitalised own costs and purchase of intangible
assets (252) (183) (1,197)
Proceeds from sale of property, plant and equipment 5 47 153
Payments for acquisition of subsidiaries net
of cash acquired - (24,531) (28,662)
Settlement of deferred consideration in respect
of prior year acquisitions (5,535) (4,625) (4,625)
---------------------------------------------------- ----------- ----------- --------
Net cash flows from investing activities (6,822) (30,022) (35,476)
---------------------------------------------------- ----------- ----------- --------
Financing activities
Issue of ordinary shares - 26,988 26,988
Repurchase of ordinary shares into treasury - - (203)
Borrowings drawn - 14,505 15,872
Borrowings repaid (2,036) (156) (2,772)
Payment obligations for right-of-use assets (609) (458) (1,093)
Interest paid (726) (270) (865)
Dividends paid to equity shareholders (1,529) - (2,235)
Transactions with non-controlling interests - 50 50
---------------------------------------------------- ----------- ----------- --------
Net cash flows from financing activities (4,900) 40,659 35,742
---------------------------------------------------- ----------- ----------- --------
(Decrease)/Increase in cash and cash equivalents (3,471) 11,137 9,314
---------------------------------------------------- ----------- ----------- --------
Unaudited Unaudited Audited
as at as at as at
30 Sept 30 Sept 31 Mar
23 22 23
GBP'000 GBP'000 GBP'000
----------------------------------------------------- --------- --------- --------
Translational foreign exchange on opening cash 59 83 (14)
Net (decrease)/increase in cash and cash equivalents (3,471) 11,137 9,314
Net cash and cash equivalents brought forward 12,224 2,924 2,924
----------------------------------------------------- --------- --------- --------
Net cash and cash equivalents carried forward 8,812 14,144 12,224
----------------------------------------------------- --------- --------- --------
Unaudited Unaudited Audited
as at as at as at
30 Sept 30 Sept 31 Mar
23 22 23
GBP'000 GBP'000 GBP'000
------------------------------------------------ --------- --------- --------
Represented by:
Cash and cash equivalents - available on demand 8,812 7,117 8,192
Cash and cash equivalents - on deposit - 8,929 4,032
Cash and cash equivalents - overdraft facility - (1,902) -
------------------------------------------------ --------- --------- --------
Net cash and cash equivalents 8,812 14,144 12,224
------------------------------------------------ --------- --------- --------
NOTES TO THE INTERIM REPORT
FOR THE SIX MONTHSED 30 SEPTEMBER 2023
1. Basis of preparation of interim financial information
General information
Solid State PLC (the "Company") is a public company
incorporated, domiciled and registered in England and Wales in the
United Kingdom. The registered number is 00771335 and the
registered address is: 2 Ravensbank Business Park, Hedera Road,
Redditch B98 9EY.
The interim financial statements are unaudited and do not
constitute statutory accounts within the meaning of section 434 of
the Companies Act 2006. Statutory accounts for the year ended 31
March 2023, prepared in accordance with UK-adopted International
Accounting Standards, have been filed with the Registrar of
Companies. The Auditor's Report on these accounts was unqualified,
did not include any matters to which the auditors drew attention by
way of emphasis without qualifying their report and did not contain
any statements under section 498 of the Companies Act 2006.
Basis of preparation
These condensed interim financial statements for the six months
ended 30 September 2023 have been prepared in accordance with IAS
34, "Interim financial reporting", as contained in UK-adopted
International Accounting Standards.
The condensed interim financial statements should be read in
conjunction with the annual financial statements for the year ended
31 March 2023, which have been prepared in accordance with
UK-adopted International Accounting Standards.
The consolidated interim financial statements have been prepared
in accordance with the recognition and measurement principles of
UK-adopted International Accounting Standards expected to be
effective for the year ending 31 March 2024.
Going concern
In assessing going concern, the Directors gave careful
consideration of the potential impact of the principal risks and
uncertainties that the business faces, including direct and
indirect supply chain disruption risks in addition to inflation on
the cash flows and liquidity of the Group over the next 18-month
period.
We have seen customers maintaining strong order cover to help to
manage global electronics supply chain issues. The most significant
impact on the Group's future performance is the potential for an
unwinding of customer stock holdings as the uncertainty arising
from the extended electronic component lead times improves and
there is a need to manage working capital and cash more tightly.
Management has taken all possible actions to minimise and mitigate
the potential impact of this unwind; however, there is potential
for some rescheduling of demand/destocking in the second half of
FY23/24 and, potentially, into FY24/25. While the actions do not
mitigate the risk fully, it still positions the Group to manage the
impact as effectively as possible (as demonstrated historically
over the last two trading years).
In assessing going concern for the period ended 30 September
2023, the financial modelling applied various sensitivity scenarios
to a base case to 31 March 2025, which was prepared based on an
extension of the budget for FY23/24.
The Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for at
least the next 12 months, therefore, it is appropriate to adopt a
going concern basis for the preparation of the interim financial
information. Accordingly, this interim financial information does
not include any adjustments to the carrying amount or
classification of assets and liabilities that would result if the
Group and Company were unable to continue as a going concern.
2. Accounting policies
The accounting policies are unchanged from the financial
statements for the year ended 31 March 2023, other than as noted
below.
Financial instruments
The carrying value of cash, trade and other receivables, other
equity instruments, trade and other payables, and borrowings also
represent their estimated fair values.
All the Group's financial instruments, as disclosed, are
considered to fall under Level 1, except for deferred contingent
consideration due on acquisitions that are classified as Level 3
instruments. The contingent consideration in relation to Custom
Power's last 12-month revenue threshold within the18-month period
post acquisition remains assessed at GBPNil value based on the
discounted future forecasts prepared, as described in Note 1.
Additional disclosure of the basis of measurement and policies
in respect of financial instruments are described on pages 108 to
113 of our 31 March 2023 Annual Report and remain unchanged at 30
September 2023.
Estimates
The preparation of interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income, and expense. Actual
results may differ from these estimates.
In preparing these condensed interim financial statements, the
significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those that applied to the consolidated financial
statements for the year ended 31 March 2023.
Recent accounting developments
The accounting policies adopted are consistent with those of the
previous financial year, and in preparing the interim financial
statements, there were no standards, amendments or interpretations
applied for the first time that had a material impact for the
Group.
3. Principal risks and uncertainties
The principal risks and uncertainties impacting the Group are
described on pages 46 to 48 of our 31 March 2023 Annual Report and
remain unchanged at 30 September 2023. The exception is that
acquisition risk is now low as no new companies have been acquired
in the last 12 months.
They include: acquisitions, legislative environment and
compliance, competition, product/technology change, supply chain
interruption and cost inflation, retention of key employees,
failure of, or malicious damage to, IT systems, natural disasters,
and forecasting and financial liquidity.
4. Segmental information
Unaudited Unaudited
Six months Six months Audited
to to Year to
30 Sept 30 Sept 31 Mar
23 22 23
GBP'000 GBP'000 GBP'000
-------------- ----------- ----------- --------
Revenue
Systems 56,732 24,013 57,517
Components 31,393 35,344 68,986
-------------- ----------- ----------- --------
Group revenue 88,125 59,357 126,503
-------------- ----------- ----------- --------
5. Adjusted profit measures
Unaudited Unaudited
Six months Six months Audited
to to Year to
30 Sept 30 Sept 31 Mar
23 22 23
GBP'000 GBP'000 GBP'000
------------------------------------------------------- ----------- ----------- --------
Acquisition fair value adjustments within cost
of sales - 90 88
Acquisition fair value adjustments and reorganisation
costs - 178 304
Decrease in deferred contingent consideration
of Active Silicon - - (326)
Amortisation of acquisition intangibles 910 661 1,602
Share-based payments 243 114 551
Imputed interest on deferred consideration
unwind 34 - 136
Taxation effect (304) (222) (492)
Movement of deferred tax assets in other comprehensive
income 65 - 94
------------------------------------------------------- ----------- ----------- --------
Total adjustments to other comprehensive income 948 821 1,957
------------------------------------------------------- ----------- ----------- --------
Gross profit 27,295 18,769 39,674
Adjusted gross profit 27,295 18,859 39,762
------------------------------------------------------- ----------- ----------- --------
Operating profit 6,935 4,473 9,408
Adjusted operating profit 8,088 5,516 11,627
------------------------------------------------------- ----------- ----------- --------
Operating profit margin percentage 7.9% 7.5% 7.4%
Adjusted operating profit margin percentage 9.2% 9.3% 9.2%
------------------------------------------------------- ----------- ----------- --------
Profit before tax 6,064 4,182 8,436
Adjusted profit before tax 7,251 5,225 10,791
------------------------------------------------------- ----------- ----------- --------
Profit after tax 4,513 3,339 6,690
Adjusted profit after tax 5,396 4,160 8,553
------------------------------------------------------- ----------- ----------- --------
Other comprehensive income 5,100 6,244 5,727
Adjusted other comprehensive income 6,048 7,065 7,684
------------------------------------------------------- ----------- ----------- --------
6. Earnings per share
The earnings per share is based on the following:
Unaudited Unaudited
Six months Six months Audited
to to Year to
30 Sept 30 Sept 31 Mar
23 22 23
GBP'000 GBP'000 GBP'000
-------------------------------------------------- ----------- ----------- ----------
Adjusted earnings post tax attributable to equity
holders of the parent 5,385(1) 4,164(2) 8,556(3)
Earnings post tax attributable to equity holders
of the parent 4,502 3,343 6,693
-------------------------------------------------- ----------- ----------- ----------
Weighted average number of shares 11,327,000 8,998,193 10,374,314
Diluted weighted average number of shares 11,516,279 9,193,936 10,604,768
-------------------------------------------------- ----------- ----------- ----------
EPS
Basic EPS from profit for the period 39.7p 37.2p 64.5p
Diluted EPS from profit for the period 39.1p 36.4p 63.1p
-------------------------------------------------- ----------- ----------- ----------
Adjusted EPS
Adjusted basic EPS from profit for the period 47.5p 46.3p 82.5p
Adjusted diluted EPS from profit for the period 46.8p 45.3p 80.7p
-------------------------------------------------- ----------- ----------- ----------
(1) Calculated as Adjusted profit after taxation (GBP5,396k)
excluding non-controlling interest profit (GBP11k)
(2) Calculated as Adjusted profit after taxation (GBP4,160k)
excluding non-controlling interest loss (GBP(4)k)
(3) Calculated as Adjusted profit after taxation (GBP8,553k)
excluding non-controlling interest loss (GBP(3)k)
7. Dividends
Dividends paid during the period from 1 April 2022 to 30
September 2023 were as follows:
Final dividend year ended 31 March
5 October 2022 2022 13.25p per share
Interim dividend year ended 31
16 February 2023 March 2023 6.5p per share
Final dividend year ended 31 March
29 September 2023 2023 13.5p per share
The Directors are intending to pay an interim dividend for the
year ending 31 March 2024 on 16 February 2024 of 7.0p per share.
This dividend has not been accrued at 30 September 2023.
8. Share capital
Unaudited Unaudited Audited
Six months Six months Year
as at as at as at
30 Sept 30 Sept 31 Mar
23 22 23
------------------------------- ----------- ----------- ----------
Allotted issued and fully paid
Number of ordinary 5p shares 11,346,394 11,322,394 11,346,394
------------------------------- ----------- ----------- ----------
Unaudited Unaudited Audited
Six months Six months Year
as at as at as at
30 Sept 30 Sept 31 Mar
23 22 23
GBP'000 GBP'000 GBP'000
------------------------------- ----------- ----------- --------
Allotted issued and fully paid
Ordinary 5p shares 567 566 567
------------------------------- ----------- ----------- --------
The ordinary shares carry no right to fixed income, the holders
are entitled to receive dividends as declared, and are entitled to
one vote per share at shareholder meetings.
Full details of movements in reserves are set out in the
consolidated statement of changes in equity on page 10.
The following describes the nature and purpose of each reserve
within owners' equity.
Reserve Description and purpose
------------------ --------------------------------------------------------------
Amount subscribed for share capital in excess of nominal
Share premium value.
------------------ --------------------------------------------------------------
Amounts transferred from share capital on redemption
Capital redemption of issued shares.
------------------ --------------------------------------------------------------
Cumulative net gains and losses recognised in the consolidated
Retained earnings statement of comprehensive income.
------------------ --------------------------------------------------------------
Shares held in Shares held by the Group for future staff share plan
treasury awards.
------------------ --------------------------------------------------------------
Foreign exchange translation differences arising from
the translation of the financial statements of foreign
Foreign exchange operations.
------------------ --------------------------------------------------------------
Non-controlling
interest Equity attributable to non-controlling shareholders.
------------------ --------------------------------------------------------------
9. Non-current assets
Unaudited Unaudited Audited
Six months Six months Year
as at as at as at
30 Sept 30 Sept 31 Mar
23 22 23
GBP'000 GBP'000 GBP'000
----------------------------- ----------- ----------- --------
Goodwill 30,051 34,554 29,726
Acquisition intangibles 9,699 12,152 10,523
Research and development 479 125 682
Software 629 367 632
----------------------------- ----------- ----------- --------
Intangible assets 40,858 47,198 41,563
Property plant and equipment 4,939 4,838 4,718
Right-of-use assets 1,792 2,652 1,981
Deferred tax asset 305 3,143 375
----------------------------- ----------- ----------- --------
Total non-current assets 47,894 57,831 48,637
----------------------------- ----------- ----------- --------
10. Net debt
Unaudited Unaudited Audited
Six months Six months Year
as at as at as at
30 Sept 30 Sept 31 Mar
23 22 23
GBP'000 GBP'000 GBP'000
---------------------------------------------- ----------- ----------- --------
Cash and cash equivalents - overdraft - (1,902) -
Bank borrowing due within one year (1,351) (220) (1,279)
Bank borrowing due after one year (11,354) (15,628) (13,383)
---------------------------------------------- ----------- ----------- --------
Total borrowings (12,705) (17,750) (14,662)
---------------------------------------------- ----------- ----------- --------
Deferred consideration on acquisitions within
one year - (14,414) (5,679)
Cash and cash equivalents - on deposit - 8,929 4,032
Cash and cash equivalents - on demand 8,812 7,117 8,192
---------------------------------------------- ----------- ----------- --------
Net debt (3,893) (16,118) (8,117)
---------------------------------------------- ----------- ----------- --------
The Group initially drew down two GBP6.5m term loans totalling
GBP13.0m. The first tranche is interest only and committed for
three years from the 5 August 2022, and the second tranche is
repayable over five years with quarterly repayments. Both tranches
bear variable interest based on a margin over base rate.
The cash on deposit was utilised in the Period to fully settle
the deferred consideration on the Custom Power acquisition. The
remaining Active Silicon consideration was also fully settled.
The Group has retained its GBP7.5m revolving credit facility,
which is committed to November 2024 and bears variable interest
based on a margin over base rate.
Lease liabilities are excluded from the Group's definition of
net debt and a separate roll-forward of lease liabilities will be
presented in the full-year report to the year ending 31 March
2024.
11. Related party transactions
Consistent with the year ended 31 March 2023, the ongoing
related party transactions in the Period were those with the
trading companies that are used by the Non-Executive Directors for
their consultancy services. These transactions are disclosed in the
Remuneration Report in the Annual Report to the 31 March 2023, and
will be updated in the full-year report to the year ending 31 March
2024.
eTech Developments Limited ("eTech") made sales to the Group
totalling GBP241k and purchases from the Group totalling GBP36k. As
at 30 September 2023, GBP200k is owed to the Group from eTech and
GBP8k is owed from eTech to the Group. There are no other material
related party transactions.
12. Post balance sheet events
Post Period-end, 3,500 new shares of 5p each were issued due to
an employee share option exercise.
The UK-based Components Division launched new branding to trade
as "Solsta".
The statement will be available to download on the Company's
website: www.solidstateplc.com .
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END
IR FLFITFLLSIIV
(END) Dow Jones Newswires
December 05, 2023 02:00 ET (07:00 GMT)
Grafico Azioni Solid State (LSE:SOLI)
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Grafico Azioni Solid State (LSE:SOLI)
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