Filtronic blames high costs for half-year loss
TELECOMS innovator Filtronic has reported a first half loss, blaming lower margin work and higher costs following investment.
But the County Durham and Leeds-based plc hailed a series of recent contract wins and has announced a £7.8m order with a satellite firm.
In interim results for the six months to the end of November, the firm said revenue was broadly flat at £8.5m, as an operating profit of £500,000 in the same period last year became a loss of £400,000.
Despite that, bosses said they are confident that full-year results for 2024 and 2025 will be ahead of expectations thanks to an easing of semiconductor shortages in global supply chains.
Chairman Jonathan Neale said that Filtronic’s key market – the low Earth orbit satellite industry – was developing rapidly and global instability had highlighted the importance of defence spending on electronic warfare and battlefield communications.
Meanwhile global uptake of 5G infrastructure was said to have driven a “relentless demand for bandwidth driving technology”.
Filtronic’s E-band transceiver modules – which can help extend transmission distances – have helped it win a number of contracts with private, high-frequency trading network providers.
Its latest order is for Filtronic’s Cerus32 solid state power amplifier – equipment used to transmit power. The kit will be installed at ground stations as part of the unnamed customer’s Earth station antenna network which provides connectivity between low Earth orbit satellites.
Filtronic chief executive Richard Gibbs said the order, from an existing customer, demonstrated the firm’s capabilities in quickly bringing products to market for fast rollout and that it was testament to the team’s design expertise.
Mr Neal said: “We are encouraged by the recent successes we have had in the execution of our strategic plan and targeted growth initiatives. The impact of this is expected in H2 FY2024 as we expect revenue to be ahead of fullyear market expectations and profitability to be materially ahead.
“Our confidence stems from the recently announced contract wins with customers in LEO space, aerospace and defence markets which were particularly pleasing given both the quantity and value, as well as the significance and quality of the new customers.
“Consistent with our stated growth objectives we anticipate year-on-year forecast revenue improvements but recognise that timing of major project decisions and order placement may span financial years, resulting in a growth trajectory that may sometimes be non-linear despite delivering robust compound growth.
“As success is delivered, we will continue to invest for growth whilst managing the rest of the cost base, where possible, to drive stronger profits and margins.”