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Solid State

  • BY: Andrew Hore |
  • POSTED: 23/12/2013 |

Industrial computers and electronic components distributor Solid State is paying up to £2.4m for 2001 Electronic Components (2K1).

The initial payment is £2m and the other £400,000 depends on the finalisation of the accounts. Solid State has raised £2.54m via a placing at 242p a share and this has enabled new investors to come on board.

Chairman Gordon Comben is selling 100,000 shares and director William Marsh 88,000 shares all at 242p each. Their respective stakes have reduced to 23.1% and 15.8%.

2K1 is a similar business to the electronic components side of Solid State but there is little overlap. In 2012, revenues were £6.8m and operating profit was £640,000, although loss-making C1 Systems generates revenues of £750,000 and is not being acquired. In the first nine months of 2013, revenues were £5.4m. Annualised cost savings of £300,000 are planned.

In the six months to September 2013, Solid State’s revenues declined by 22% to £12.3m, with the shortfall due to a one-off export contract. Recent acquisition Q-Par contributed £710,000 to revenues. Pre-tax profit dipped from £732,000 to £564,000. The interim dividend is unchanged at 2.75p a share. Net debt was £2.1m.

There is a record order book and the results will be second half weighted.

At 261p a share, Solid State is valued at £18.7m.

Download the latest AIM Journal from http://wwww.hubinvest.com/AIMPDFDecember2013_51.pdf

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