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LONDON (Alliance News) - Filtronic PLC Thursday said the pickup in trading it is expecting in the second half of its financial year is likely to be later than originally planned, after it said it swung to a pretax loss in the first half as revenue more than halved due to project delays and slower-than-expected new business wins.
The wireless telecoms product manufacturer posted a pretax loss of GBP5.3 million for the half year to end-November 2014, compared with a pretax profit of GBP93,000 a year before, as revenue more than halved to GBP7.3 million from GBP20.1 million.
It also started burning cash, reporting a net cash outflow from operating activities of GBP2.1 million for the six months, compared with a inflow of GBP5.1 million a year earlier. It held net cash of GBP0.2 million at the end of the period, down from GBP5.9 million a year earlier. However, it did raise GBP2.0 million in a share placing after the end of the half.
Its Wireless business reported lower sales activity after the completion of a television interference mitigation filter contract in the first half of the previous year, and the new sales to original equipment manufacturers that it had hoped for were slower than it had expected.
Additionally, an advanced integrated antenna product was delayed due to technical issues that arose during final product testing. The antenna, which Filtronic had expected to be a significant element of its growth, will now enter production at least four months later than anticipated, it said.
This issue has been compounded after an expected order from an operator failed to materialise, and two programmes with original equipment manufacturers were delayed into its next financial year. As a result, Filtronic anticipates full year results for this business to substantially lower than current expectations.
In its Broadband business, Filtronic's performance has been hit by the curtailment of orders from its customers selling to Russia, leading the business to perform "slightly" below the level Filtronic had expected. Whilst the company expects demand for its products to grow in coming years, it does not foresee a significant improvement in market conditions in the near-term, it said.
"Whilst we are disappointed with the sales performance in the first half and foresee that the upturn in the second half is likely to be later than we had originally planned, we remain confident in our strategy and in the sales growth potential from the original equipment manufacturer products we have developed and are continuing to develop leading to a much improved trading performance over the medium-term," said Chairman Howard Ford in a statement.
Shares in Filtronic were down 5.2% at 19.90 pence Thursday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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