Solid State warns on profits after contract delay and market softening

Despite making a robust start to the year, electronic components supplier Solid State warned revenues and profits for the year will be well below market expectations after a major contract was rejigged.

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The AIM-listed company, which supplies specialist 'ruggedised' computers, electronic components, secure communications systems and batteries to the electronics market, said the first-half was "satisfactory" despite the softening markets as has been reported by industry peers.

Interim turnover will rise 22% year-on-year to roughly £21m in the six months to 30 September but profits before tax are expected to be down 3% to around £1.5m.

But Solid State warned in a statement released on Thursday afternoon that due to "contract variations and general market softening", it anticipated revenues and profits in the second half will be "significantly lower than expected and, as a result, revenues and profits for the year as a whole will be below market expectations".

At a meeting with a client this week, "delivery expectations" were altered for a material contract, presumably delayed, which was one of the main items impacting the second half of the year.

It added that "the contract is high profile and a high priority for the customer and Solid State is confident that it is fulfilling its obligations to the customer".

Shares in the company were down 25.5% to 540p by 1500 GMT on Thursday.