12th Dec 2018 10:26
LONDON (Alliance News) - Filtronic PLC on Wednesday said it expects a swing to loss in its current financial year following a decline in sales in the first half.
The stock was down 54% on Wednesday at 8.22 pence a share.
The communications equipment company said sales in the six months to the end of November were GBP10.4 million, down from GBP12.8 million reported for the same period a year earlier, due to the lower demand for its Massive MIMO antennas.
As a result, Filtronic said it now expects to be loss-making for the current financial year. In financial 2018, the company reported pretax profit of GBP1.2 million.
As a consequence of this lower demand and the uncertainty it brings, Filtronic said it has decided to impair fully the net book value of the capitalised development costs of GBP500,000 relating to the development of Massive MIMO in its half-year results.
More positively for Filtronic, the company said it has made considerable efforts to diversify its customer base in recent years and was recently approved as a supplier of a niche antenna product to a Tier 1 mobile network operator in South Africa.
"Notwithstanding the antenna business setback, we are pleased with the continuing progress made in developing our critical communications market opportunities and advise that this part of the business is trading in line with expectations," Filtronic said in its statement.
The production ramp-up of Filtronic's long-term contracts to the defence and aerospace market is now complete, it said, with a steady rate of throughput in line with the customer's requirements.
These has enabled the company to secure further contract wins with this customer and to penetrate other major players within the defence and aerospace sector.
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