Filtronic hitting £1m sales a month mark

The Shipley-based group told shareholders at its AGM yesterday that sales are running at around 1m per month.

Filtronic, whose point-to-point technology links mobile phone base stations, said its proposed acquisition of Leeds-based filter firm Isotek is progressing well and the board expects to make a formal offer in October.

The group announced plans to buy Isotek, run by former Filtronic staff, for 10.7m in cash and shares in July.

Isotek is already embedded with major mobile phone operators and manufacturers. Filtronic has its head office in Shipley, but is largely based in Co Durham after the company moved production from Shipley to Durham to cut costs. The acquisition of Isotek will see Filtronic expand back into Yorkshire.

Filtronic believes trading will remain tough for the rest of this year before demand begins to ramp up in 2011.

The group believes it is on the cusp of a surge in sales, aided by the planned purchase of a wireless infrastructure business.

Filtronic expects the demand for data-hungry mobile devices such as smartphones, net books, laptops and tablets to lead to "exponential" growth in mobile data.

While 3G and 4G network upgrades are currently being held back, it believes operators will have no choice but to rapidly upgrade from next year.

At the end of August, the company had 15.1m of cash, a reduction of 1.1m from the year-end position.

This reflected a number of factors including the working capital impact of a different sales mix and improved sales over- all.

The half year results for the six months to November 30 will be announced in January.

Analyst Paul Cornelius at FinnCap said yesterday's trading update should relieve investors that the slow fourth quarter was an anomaly and activity levels have recovered to more normal levels from June 1.

"There should be no doubt that the global network operators are coming under increasing pressure to invest in next generation networks," he said.