Our sum-of-the-parts analysis, which looks at both specialist manufacturing and value-added distribution companies, gives an indicative valuation range of 445-495p/share based on target EV/EBITDA and P/E multiples derived using sector averages (previously 505p based on peer group P/E). As the market becomes more confident that Solid State is able to grow profits in the absence of the MoJ contract, the share price should move towards our indicative valuation range.
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