6th Feb 2024 10:53
(Alliance News) - Filtronic PLC on Tuesday said it swung to a loss in its latest half year, but celebrated winning two new "significant" contracts with a "leading" client.
Shares in the company were trading 9.8% higher at 28.00 pence in London on Tuesday morning.
Filtronic is a Sedgefield, England-based designer and manufacturer of products and sub-systems for the aerospace, defence, telecoms infrastructure, space, and critical communications markets.
The company said revenue increased 1.3% to GBP8.5 million for the six months to November 30, from GBP8.4 million the year before and "broadly in line with internal forecasts". It also said it had been "making good progress" on its GBP3.2 million contract for the European Space Agency ARTES programme awarded in July 2023.
However, Filtronic still swung to a GBP517,000 pretax loss following the prior year's GBP440,000 profit.
Filtronic also said it swung to a GBP369,000 operating loss from the prior year's GBP483,000 profit. This was largely due to "an adverse first half sales mix comprising a higher concentration of lower margin telecommunications infrastructure product, and a higher cost base following investment into sales channels and engineering".
Looking ahead, Filtronic expects revenue and profit for the current year and for financial 2025 to "materially" surpass market expectations.
"Consistent with our stated growth objectives we anticipate year-on-year forecast revenue improvements," said Chair Jonathan Neale, "but recognise that timing of major project decisions and order placement may span financial years resulting in a growth trajectory that may sometimes be non-linear despite delivering robust compound growth.
"As success is delivered, we will continue to invest for growth whilst managing the rest of the cost base, where possible, to drive stronger profits and margins."
Also on Tuesday, Filtronic announced two "significant contract wins", a production order and a development agreement. The client is "a leading global provider of low earth orbit satellite communications equipment".
Filtronic said the production order contract is valued at USD9.9 million or GBP7.8 million, and is "the third and largest...to date" for additional demand of its Cerus32 solid state power amplifier module. It expects revenue from the deal to be recognised within the current calendar year.
The other contract is a development agreement "to accelerate the design and prototype delivery of an E-band module" to form part of a satellite payload. This module would represent Filtronic's first ever product designed for space flight.
By Emma Curzon, Alliance News reporter
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