Filtronic seals deal with US giant for £1.3m

Shares in mobile phone technology firm Filtronic jumped nine per cent after it announced a further contract win with a major US multinational for £1.3m.

This is the second contract award in the last few weeks and gives investors hope that the Leeds-based group is putting the worst behind it.

Filtronic​, which designs and manufactures microwave electronics products for the wireless telecoms infrastructure market, ​said the deal will see it developing core elements within long range, E-Band communication systems.

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​These are wireless systems ​that enable ultra-high capacity transmission of telecommunications data over a 20km range using E-Band frequencies.

Filtronic said this would be a technically challenging project that will push the boundaries of current technology and will be centred on Filtronic’s class leading “Orpheus” transceiver technology.​

​​Rob Smith, CEO of Filtronic, said: “We are delighted to have been chosen to work on this challenging and prestigious project.

“It is a terrific endorsement of our engineering capability and underscores our position as the leading player in the E-Band transceiver market.”​

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​Filtronic expects to complete development milestones equivalent to half the contract value in the current financial year to May 31 with the balance next year.

The group’s shares closed up 0.5p at 5.88p on the news.

The deal follows the announcement of a £2.7m production contract late last month.

The order was with a major European manufacturer and was the first volume contract for Filtronic’s new range of integrated antennas.

It followed on from and replaces a previous contract win announced last October.Filtronic said it expected to fulfil the order in the current financial year.

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Mr Smith said the two contracts signal a brighter future for the firm.

“These are very important milestones along the way to our recovery,” he said.

“We have still got a hell of a lot to do to change the orders into real life sales, but morale is definitely on the way up for the company.

“When we went out for the refinancing last year, we knew what we needed to do. We’ve been working on these contracts for some time. They came in when we hoped that would and they were for slightly more than we thought. It’s very positive for us.”

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Filtronic will publish half year results on Tuesday which are expected to show how Mr Smith and his new management team have “right sized” the business for its current market.

Its market is large and wireless network operators need to deploy the fastest networks to remain competitive.

Analysts believe Filtronic is well placed to benefit from this global trend and there is plenty of opportunity for the company to expand.

In December the group raised £500,000 in an open offer.

The proceeds will be used by Filtronic for general working capital purposes.

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The fundraising follows Filtronic’s move to raise £4.5m in August as it switched to the smaller AIM market.

Last year Filtronic made an £11m pre-tax loss following challenging and difficult year when customer demand fell short of its expectations.

Filtronic switched to the smaller AIM market from the London Stock Exchange’s main market last summer.

The firm said AIM is appropriate for a company of Filtronic’s size and the move has helped to attract new investors

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In addition, AIM offers greater flexibility on corporate transactions and should enable Filtronic to execute transactions more quickly and cost effectively than a company on the official list.

In particular, the company now has the ability to raise equity finance from institutional investors without the need for a prospectus. The directors added that being on AIM has made the shares more attractive to retail investors, increasing liquidity.

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