WHI Morning Comment: Solid State (SOLI) - Continues to trade ahead of expectations, pipeline expansion ongoing

Solid State's update on the four months to March 31st shows that the company, a manufacturer of computing, power and communications products, and value added distributor of electronic components, continues to surprise on the upside. With group revenues relatively stable and the quantum of the order intake YoY reduction on the back of the pandemic shrinking during the recent period, we view this in an encouraging light, particularly against the backdrop of “solid” cash generation as evidenced by cash remaining stable at the year end net cash level of £3.2m. The order book, which is reported to have stood at £39.9m at the year end, was only marginally below this four months on, at the July 31st level of £38.3m, a creditable achievement given that post-Covid some shorter timescales have been seen in UK domestic orders. As previously, our forecasts remain under review for the present. However, with a strong balance sheet and meaningful unutilised bank facilities, we continue to view the group as well-placed to win out as the Covid crisis recedes and indeed to be well-positioned to grow by consolidation as well as by resuming organic growth.