6th Feb 2020 11:57
(Alliance News) - Filtronic PLC on Thursday reported a swing to loss in the first half of its current financial year, due to lower sales and increased costs from recruitment and restructuring.
Filtronic was 11% down at 9.95 pence each on Thursday morning.
The Leeds-based antenna manufacturer said it swung to a loss of GBP671,000 in the six months to the end of November compared to a profit of GBP369,000 a year prior. Revenue fell 16% to GBP7.5 million from GBP8.9 million.
Filtronic said that the revenue loss came from a fall in sales resulting from the sale of its legacy filter product programmes.
The swing to a loss was attributed by the company to costs arising from an "extensive" recruitment & training programme of additional manufacturing and test staff for the increase in mmWave and defence production volumes.
Filtronic said it also incurred exceptional costs of GBP800,000 relating to the sale of its telecommunications antenna operations which completed in January, as well as the restructuring of the continuing business. It expects additional costs in this regard of GBP700,000 in the second half of its financial year ending May 31.
Looking ahead, Filtronic said it started its second half with a strong order book of over GBP10 million and expects its annual earnings before interest, taxes, depreciation, and amortization to be in line with market expectations.
"The recent design wins to develop X-Haul derivatives to major players in the high-altitude pseudo-satellite and 5G mmWave equipment markets were key milestones on our strategic roadmap. These new contracts enable us to further extend our engineering capability, know-how and highlight our ability to develop a competitive position across a wider market," said Executive Chair Reg Gott.
"However, this NRE funded development work will run through the next 16 months meaning revenue will largely not be recognised until our financial year ending May 2021, slightly limiting our progress in H2 profit development."
On Wednesday, Filtronic had said it secured two new mmWave design and development contracts worth approximately USD1.6 million total.
By Ife Taiwo; [email protected]
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