Solid State

In what is its 40th trading year, electronic components specialist Solid State (SSP) has not disappointed with news of a record trading result.

Our recent advice to buy the shares in the July issue of Growth Company Investor has proved well timed, as the price has ticked up from 104.5p to 124p. Strong trading across all divisions helped boost sales 57% to £21.2m in the year to March as pre-tax profits rocketed 135% to £1.2m.

The figures were ahead of our suggested profit line of £1m and there is also the welcome sight of a doubled total dividend of 6p a share – proof of the company's intent to reward investors.

Solid State Supplies is a distributor of electrical components such as semiconductors. With the completion of its restructuring efforts it has enjoyed a 46% increase in year-on-year bookings. It has returned to a sustainable profit and hopes to benefit from the extension of its contract with US giant Microsemi to sell products.

Rugged Systems is the leading supplier of rugged mobile computing and has benefited from the relocation of its business. Battery packs arm Steatite has stocked up on kit following the tragic events in Japan, and has also relocated to a new site in Redditch.

Chief executive Gary Marsh says that 'over the last five months our order intake has exceeded our shipping'. This is a positive sign, and with a record order book of just under £9m the outlook is good. Recently appointed broker WH Ireland expects 2012 pre-tax profits of £1.34m and EPS of 15.3p (slightly down due to a higher number of shares in issue). Solid State is in talks to secure new business and is on the lookout for further acquisitions. Buy.