Filtronic chief’s farewell as trading remains on target

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MOBILE phone technology business Filtronic told investors trading is on track despite weakness in its broadband arm, as it parted company with former chief executive Hemant Mardia.

The group, which recently moved its head office from Shipley to Leeds Bradford Airport, told investors at its annual meeting trading at group level has been in line with expectations.

Its broadband business, which makes filters and modules for mobile phone base stations, is experiencing a decline in its traditional radio module business. While it expects this to be offset by growth in its E-band radio and aerospace work, Filtronic said volumes of new business have been slower than expected, leaving trading “slightly behind” expectations.

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Filtronic added its wireless business, which helps mobile phone operators upgrade base stations to handle more data, is growing “slightly ahead” of expectations. As well as strong US demand, it is also getting “significant” inquiries from European and US operators.

Its cash pile remained stable in August at £3.7m. All resolutions were passed at its AGM.

Filtronic recently said revenues surged 68 per cent to £26.1m in the year to the end of May. It reported pre-tax losses of £1.6m, but a significant improvement on the £7m losses a year earlier. Underlying operating profits were £0.8m, compared with £5.3m losses in 2011.

Analysts hailed its progress in supporting the fourth generation (4G) mobile internet roll-out.

Daniel Stewart analyst Mike Jeremy said: “Our view is unchanged. Growth prospects remain concentrated in the wireless segment, allied to demand for 4G/LTE capacity as spectrum is allocated and operators activate rollout plans, notably in the US and UK, and manage the crucial transition from 3G to next-generation services.”

George O’Connor, analyst at house broker Panmure Gordon, said the statement was a “proof point that Filtronic is benefiting as network operators upgrade infrastructure to deliver 4G networks”.

“In our view, Filtronic’s US expertise in delivering 4G should help it competitively as networks across the world upgrade their network infrastructure.”

Dr Mardia announced in July he was quitting the group after 28 years to seek a new challenge. He was replaced as CEO by former executive director Alan Needle, who rejoined the business in 2010 when it bought Leeds wireless firm Isotek.

Dr Mardia joined Filtronic in 1984 as a student under founder Professor David Rhodes and was awarded a doctorate in electronic engineering from Leeds University.

He became managing director of Filtronic Broadband in 1996, and joined the board as an executive director in October 2007. In September 2008 he became chief executive.