Filtronic suffers ‘setback’ to its growth plans

Filtronic has published its half year results in the City.  Photo: Jonathan Brady/PA Wire
Filtronic has published its half year results in the City. Photo: Jonathan Brady/PA Wire
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FILTRONIC has reported a half year operating loss after suffering a setback to its growth plans.

Filtronic, which is a designer and manufacturer of antennas, filters and products for the wireless telecoms infrastructure and adjacent markets, has announced its half year results for the six months ended November 30 2018.

Filtronic said that group performance for the first half of the year was broadly in line with management’s expectations, with sales revenue of £10.4m, compared with £12.8m in the same period the year before. The lower revenues resulted from the anticipated conclusion of certain legacy filter product programmes, partially offset by stronger defence sales, the company said.

Over the half year, it recorded an operating loss of £0.9m, compared with a profit of £0.9m in the same period the previous year.

Commenting on the outlook, Reg Gott, the chairman, said: “Our focus on high margin products and the strategic decision to target critical communications markets has been a key component of our strategy to mitigate the revenue volatility of network roll-outs in the telecoms market. This focus has provided us with a significant level of baseline business and improved visibility of future revenues, along with further opportunities to grow our product offering and customer base.

“The news received in December from our mMIMO launch client that the end-customer was putting its roll-out programme on hold and thus significantly reducing its forecast demand until further notice, was a significant setback to our growth plans. However, our client has confirmed that the programme is not cancelled and they will continue to sell and market our mMIMO products into the market. Notwithstanding this setback, we believe the outlook for the antenna market remains positive, with continued industry investment in network developments for 4G densification and 5G roll-outs.

“Subsequent to the December notice we have received a follow-on order for the balancing requirement of mMIMO for H2 which underpins our confidence in the sales outlook for the remainder of the year and this, combined with our solid platform of long-term business within critical communications, means we expect trading in H2 to be broadly similar to H1.

“We require a little time to fully evaluate the ongoing status of the mMIMO programme, bring the new distribution arrangement up to speed and complete a review of our options for the antenna business but, in the meantime, we are comfortable with our current cash position and cash flow outlook.”