Solid State Share Discussion Threads

[powen1979] 12/12/2024 07:44

The defence sector was up significantly in FY24 to circa 45% largely driven by a communications programme which seems has be paused.

[varies] 21/11/2024 10:58

The opening pages of this thread recount the Ministry of Justice episode in 2014/16 when SOLI obtained a contract expected to produce sales of £34 million over 3 years. This was cancelled by the MoJ with some compensation eventually provided.
Might the programme now paused with such a drastic effect on SOLI's share price contain contractual obligations giving SOLI and other participants rights to compensation ?

[multibagger] 20/11/2024 18:28

£500 million of defence cuts....more to come ?

[pugugly] 19/11/2024 11:36

varies - Thanks for that - Had not seen the Edison note - Gut feel is that HMG will try and screw down the margin.

[varies] 19/11/2024 11:31

PS
I have just read Edison's commentary on this news and see that the effect on profits this year and next is expected to be disproportionate as the margins on the business "paused" is about 30%.
Turnover for 2024/25 (to March) is expected to be a little lower than in 2022/23 (£123.1M v £126.5m) but PBT only £4.0m v £10.8m in 2022/23.
So this defence business is more significant than l thought.

[varies] 19/11/2024 10:39

Pugugly
I agree with your strictures on our new government.
Given the aggressive stance of the Russians, it seems dotty to interrupt our defence programmes for 9 months. Mr Trump is likely is give HMG a sharp prod when he takes office.
Some 80% of SOLI's business is not related to defence and is expected to grow a little this year.

[pugugly] 17/11/2024 09:44

"The Company has now received notification that expenditure on a prominent defence order programme has been paused, we believe pending completion of the UK Government's strategic defence review next summer. The Company is confident that this is a temporary delay and that expected orders will still be received in due course"

But what if it is cut in the review? The government's main drive appears to be rewarding its trade union supporters and destroying small businesses by loading them with extra taxes and making it virtually impossible (except at huge expenditures of management time and costs) of downsizing the workforce for whatever reason - including getting rid of slackers who are not pulling their weight.

[varies] 16/11/2024 17:00

This is indeed a horrid shock bringing the share price to less than half
its equivalent before the recent scrip issue.
I don't see the abrupt change of guidance as " unforgivable or bordering on criminal". Surely it accords with the stock exchange rule that a material change of prospects should be reported promptly.
Profits in the year to 31 March 2024 included an exceptionally high contribution from Defence & Security but even in that year the D&S proportion of sales was only 24% according to the July 2024 presentation.
The effect of the pause now announced is significant but is it huge ?
Solid State has recovered from serious setbacks in the past and the forecasts provided by the directors have usually proved conservative.
Like every other shareholder I am smarting from this blow but, unlike some, I see the fall in our share price as overdone.

[ihatemms] 16/11/2024 13:38

To change that guidance in 9 days is unforgivable and bordering on criminal !

[davesailing] 15/11/2024 16:41

Trading update dated 6 November - Gary Marsh, Chief Executive Officer, said: "Whilst trading in the first half has been particularly challenging and we expect to see this continuing through the second half in some of our markets, our most recent order intake was stronger than any month this year and we believe there are further opportunities in security and defence which can deliver a much stronger second half. Furthermore, post the Period-end, we have made two small but strategically important acquisitions which will help to drive our mid-term strategic goals in both divisions. The board is maintaining unchanged market guidance." 

[davesailing] 15/11/2024 16:37

Existing Margins look tight - revenues of 62M GBP and only 2.5M GBP profit in the first half of this year expected reported on 6 November 2024. Now on 15 November 2024 prominent defence order paused. Defence revenue of £23.4M was recognised in the trading update on 6 November 2024. So huge loss of revenue this year and next! Could be significant losses reported next year!!! Margins are too tight!!!

[terminator101] 15/11/2024 09:46

Was already trading at over 10x p/e so the drop isn't overdone. Indeed the latest profit warning means this has a lot further to fall.

[fft] 15/11/2024 08:31

Any idea what the "prominent defence order programme" is ?Could indicate which other defence companies will be affected.

[multibagger] 15/11/2024 08:27

Market reaction worse than expected and I worry that it would be a matter of time before BoD options, if any, are re-priced and down sized to reflect the new financial reality. Defence contracts take forever at the best of times and tech keeps changing and upgrading...so SOLI R&D will have to keep up/ahead to stay relevant.
A long harsh winter and beyond for all holders.

[phar lap] 15/11/2024 08:09

Cavendish update;

"The group has announced that a prominent defence order that had been expected to occur in FY25, has now been temporarily delayed. As such, it is now expected to fall outside the current year and FY25 is now expected to be materially below existing expectations. We remove the expected effect of this order and therefore downgrade our FY25 EPS forecast by 58% to 5.5p and FY26 EPS down 48% to 7.9p. We reduce our TP from 324p to 180p to reflect the reduction in EPS. The shares have already weakened on the back of the recent trading update, which included some signals of a possible delay, but anticipate a further reaction to this news."

[brad_k] 15/11/2024 08:01

But the original guidance for 2024/25 was already below last year primarily because management were not expecting significant defence orders and it is only recently that they suggested that there might be some activity in the current year. Market expectations could not have been upgraded on that alone?

[rock star] 15/11/2024 07:58

Need to learn under-promise and over deliver….especially when you are dealing with a cash strapped and inefficient Government.

[fuji99] 15/11/2024 07:39

Are they anticipating peace with Russia and in the Middle East with Trump ?

[primarch1] 15/11/2024 07:28

Frustrating to say the least wonder how many other listed defence companies will be receiving similar delays.

[multibagger] 15/11/2024 07:14

Very unfortunate news...and how long is a piece of string with Trump going to be President, NATO spending, Ukraine-Russia conflict etc and RR struggling to find money with the economy going in reverse ?

"...At the time of the trading update on 06 November 2024, management highlighted good visibility over the expected recurring requirement for communications equipment in the security and defence sector.

The Company has now received notification that expenditure on a prominent defence order programme has been paused, we believe pending completion of the UK Government's strategic defence review next summer. The Company is confident that this is a temporary delay and that expected orders will still be received in due course, albeit that they will fall outside of the current financial period. As a result, the Company's performance for FY24/25 will be materially below current consensus expectations. The timing of the strategic defence review means it remains uncertain whether these delays will also affect orders and deliveries originally expected in FY25/26....

150-160p could be tested....AIM market is particularly unforgiving at the moment.....

[boadicea] 01/11/2024 16:18

My eye was caught by the following partagraph in today's announcement -
"For the twelve month period to 30 September 2024, Q-Par generated total revenues of $2.0m, albeit, when adjusted for intercompany (Solid State) sales, third party revenues were $0.4m and profit before tax was $0.2m."

My interpretation is that Q-Par's main business was as a reseller of SOLI products (Steatite being owned by SOLI.) The acquisition is therefore a tidying up operation which gives SOLI hands-on control of a useful part of its US sales and improved margins thereon but does relatively little to its combined revenue due to the elimination of double counting.

However, I like the look of a company which has a firm grasp on where it is going.

[robow] 03/10/2024 13:02

Yes you are correct

[ymaheru] 03/10/2024 08:45

Ti me it’s 5-1, as “four new shares for every existing share held.” So, the original plus 4 more.

[robow] 03/10/2024 08:01

i thought it was 4 for 1

[ymaheru] 02/10/2024 14:02

Yep.
hxxps://solidstateplc.com/wp-content/uploads/2024/09/Solid-State-Issue-of-Bonus-Shares.pdf

5-1 split.

So, yesterday closed at 235p equivalent.