Solid State Share Discussion Threads

[rhomboid] 29/7/2016 12:51

I should add that all those at 3.25 are buys so there's decent liquidity for anyone looking to buy.

[rhomboid] 29/7/2016 12:49

Nope that's me topping up in various accounts.

[spectoacc] 29/7/2016 12:22

String of small buys, guessing it's had a tip somewhere?

[rhomboid] 23/7/2016 12:29

I took a small position this week and I'm now looking closely at the numbers , the only oddity I could see was the reliance on an O/D of over £4m as working capital. If I'd have been FD I'd have trouble sleeping knowing that could be withdrawn at any time and Llloyds had a fixed & floating charge!. Thankfully the MofJ settlement has cleared it and then some but it looks a very unstable source of funding and I'd not want it to recur.

[varies] 23/7/2016 10:39

SpectoAcc
Thank you. I should have looked at the previous posts before entering mine.
Your assumption seems plausible.

[spectoacc] 23/7/2016 07:57

@varies - were some posts above about it, was indeed odd, and the only red flag I could find before investing. Some explanation was needed - the assumption has to be a personality clash. Guidance was reaffirmed so fingers crossed it wasn't accounts-related! All a bit strange.

[varies] 22/7/2016 20:08

Having just received my copy of the Annual Report for 2015/16 I have noticed the resignation on 29 June 2016 of the Group Finance Director, Mr. Mark Nutter. This had been announced but I missed it.
It was "with immediate effect and by mutual consent" and the Chairman wished him well for the future.
The report for the half-year to 30 Sept 2015 told us of his appointment with effect from Jan.2016 "following a rigorous recruitment process". With his strong financial and commercial background it was believed that his expertise would be of great benefit to the Group.
Before Mr. Nutter's arrival the Finance Director was Mr.Peter Haining, who has been with Solid State for many years. He is aged only 59 and should, presumably, be able to resume this function. He is presently a non-executive director and the company secretary.
Let us hope that Mr. Nutter's departure does not reflect any misgivings about the accounts !

[spectoacc] 11/7/2016 11:13

One of MoneyWeek's "5 stocks to avoid inheritance tax" tips, given it a little boost & can assume the recent buyers are for the longer term...

[haroldthegreat] 06/7/2016 21:26

any views on this?

[linhur] 29/6/2016 23:57

It might look like the FD has taken one look at the accounts and has seen too many black holes such as stock valuation or costing not correct.
Does not look good.

[luffness] 26/5/2016 12:30

gooner108 - shouldnt you declare an interest ie that you are being paid by research-tree

[redartbmud] 25/5/2016 22:11

At least it draws a line in the sand under what has been an unsatisfactory venture that could have been transformational for the business.

Metier9
Are you still around?


red

[glasshalfull] 25/5/2016 10:54

In my April update I mentioned that brokers were suggesting that SOLI may be in receipt of few £million in respect of the cancelled MoJ contract.

Therefore delighted with this mornings RNS which indicates that their cash position has moved +£4m although they are not permitted to disclose the actual settlement amount.

WH Ireland provide the following update,

"...subject to a confidentiality clause hence cannot be disclosed. However, the company flags a pro-forma net cash position as at 31 March of £350k, this comparing to our net debt forecast (pre-MoJ) of £3.6m...imply a net cash movement in the order of £4m and would represent a very satisfactory outcome in our view (our note of 22 March categorised a meaningful settlement as any amount over £2m).

We previously removed MoJ from our forecasts (and would treat any settlement as a one-off in any case) hence there are no changes to forecasts this morning save for a +£4m swing in net cash. Note that the reported PBT figure is now expected to be circa £4.1m although this will be net of expenditure write-offs and write-backs in relation to the project.

We believe the settlement to be favourable and at the better end of realistic outcomes. Solid can now move forward without the distraction of the MoJ and with a stronger balance sheet. The current year P/E of sub-10x and near-4% dividend yield is too low – closest peer Acal (ACL) trades on 16x with a 2.9% yield. We remain at Buy with an unchanged 478p price target.

Regards,
GHF

[glasshalfull] 29/4/2016 14:45

That's what WH Ireland and Edison are certainly suggesting....link to Edison above and I emboldened the WHI paragraph.

As I understand, MoJ cancelled the contract with no inference that SOLI failed in any respect. I'd therefore anticipate a level of compensation commensurate with any costs, proposed earnings & profitability, etc . A sum amounting to several £ million was suggested as a potential settlement in a WH Ireland note dating back to Feb '16

Regards
GHF

[tiswas] 29/4/2016 14:27

GHF

Are we certain that they will receive compensation as opposed to having to make a payment for any failure on their part?

[glasshalfull] 29/4/2016 14:05

Edison Note available via undernoted link. Unsure if you require to register first.
They also suggest SOLI will benefit from a cash settlement in respect of the MoJ contract.



Kind regards,
GHF

[glasshalfull] 29/4/2016 13:51

I've bought a few over recent days. Clearly sentiment at rock bottom but I feel this is now reflected in the current share price. Famous last words...

Market Cap now only £28m while they had net debt of £4m at the interims following acquisition of Ginsbury, so an EV of c. £32m. SOLI remains a cash generative business & I'd hope that their operating margin improves as benefits of the Ginsbury acquisition kick in this year.

While the MoJ debacle has cast a shadow over the stock, this will hopefully be concluded in the near future & I'd hope that SOLI receive appropriate remuneration. WH Ireland certainly suggest this may be the case per undernoted update & in a previous update talked of settlement that could run into several £m.

There is also12p dividend pencilled in for 2016/17, for a yield of 3.5% (at 340p)

Their broker provided the undernoted update,

"Trading at the core business is in line with market expectations (WHI rev £44m, WHI PBT £3.1m, WHI EPS 36.0p) whilst Solid enters the new year with an order backlog of £15.3m versus £14.4m a year ago.

The only matter outstanding for the FY16 outcome is the level of settlement to be received from the UK's Ministry of Justice (MoJ) in relation to termination of the £34m offender tagging contract. Negotiations are said to be at an advanced stage and whilst any payment would be treated as an exceptional it would be a cash item boosting Solid's net cash position.

We believe the substantial fall in share price since the termination of the electronic tagging contract in February has been overdone with the shares now trading on 9.4x historic earnings (9.2x current year).

By way of comparison, closest peer Acal (LSE: ACL) trades on 16x. The investment case is supported by a three-times covered dividend yield of 3.6% at current levels (Acal 2.9%). Potential catalysts for price action include a positive settlement to the MoJ contract and further acquisitions which have historically been earnings enhancing."

Regards,
GHF

[thomasthetank1] 28/4/2016 13:55

Read Edison's note on SOLID STATE, out this morning, by visiting hxxps://www.research-tree.com/company/GB0008237132
"Solid State has announced that trading results for FY16 at the group’s core businesses should be in line with market expectations. This confirms that it’s diversified platform will deliver another year of results at FY15’s record profit levels, despite general market weakness and the unexpected termination of the Ministry of Justice (MoJ) contract. This strong result excludes compensation for the terminated contract, which we will treat as an exceptional item. The healthy order book at the start of FY17 supports our forecasts showing modest profit growth, so we leave our estimates and indicative valuation of 505p/share unchanged. The dividend (3.7x cover) represents an attractive yield at the current price ..."

[pugugly] 27/4/2016 07:34

"The overall final result for the year will be dependent on the completion of negotiations in relation to the settlement of the terminated contract with the Ministry of Justice ("MOJ"). These negotiations are now at an advanced stage. "

Very much depends (imo) as to contract details and why the plug was pulled.

If HMG then compensation should be satisfactory - If SOLI promised more than they were able to deliver -then share price could take another hit. If third party failure to integrate then main winners will probably be the lawyers !!

[asturius101] 27/4/2016 07:28

Not bad...

[paleje] 26/2/2016 09:09

Edison say the drop is overdone and their target of ~500p remains intact as they took a prudent view of the moj prospects, admittedly they're paid for.