Filtronic upbeat on outlook after tough year

(Sharecast News) - Critical communications and wireless telecoms products supplier Filtronic reported a fall in revenue to £15.9m in its full-year results on Wednesday, from £21.6m in the prior year.
The AIM-traded firm said its EBITDA for the year ended 31 May totalled £0.7m, down from £3.6m in the 2018 financial year, while its operating profit slid to £0.2m from £3.2m.

Profit before tax was just £0.1m, compared to £2.7m a year earlier, while the company swung to a basic and diluted losses per share of 0.63p, from earnings of 0.59p 12 months prior.

Filtronic's net cash balance was £2.5m as at 31 May, falling from £3.6m at the start of the year, while its cash inflow for the year was nil, compared to £1.8m in the previous financial period.

On the operational front, Filtronic reported "strong" demand for its 5G backhaul products, with more than £10m of order intake for its 'Orpheus' product, for delivery in the 2020 financial year.

It said its production capacity and capability had been increased at its Sedgefield site to meet rising demand, adding that its public safety market product offering and engineering capability was also extended.

The company's engineering team was strengthened in Leeds during the period, to capitalise on those opportunities.

Filtronic's board said it was progressing with the divestment of its telecoms antenna operations following a comprehensive strategic review.

It also reported the final settlement of the warranty claim at $2.0m (£1.6m), which would be paid out of existing cash resources over four instalments.

"We have concluded a challenging year but entered the new year with optimism and excitement as we seek to capitalise on numerous opportunities with the potential to deliver significant organic growth," said Filtronic chairman Reg Gott.

"The decision to divest our telecoms antenna operation allows us to focus on a profitable continuing business where we can sustainably differentiate ourselves in the market and operate with a reduced geographical footprint and a more efficient overhead cost base.

"We are delighted with the recent order intake in excess of £10m for our class-leading Orpheus transceiver product, utilised in 5G backhaul networks, which builds on the long-term defence contracts we have accumulated in recent years."

Gott said that progress in "key markets", together with the new products the firm was developing for its customers in the public safety market, would provide a "robust layer" of business on which to build and grow.

"To enable us to exploit these opportunities, we have made significant investments in both plant and machinery and further expanded our engineering team to augment capacity and capability in order to facilitate further contract wins."

As at 1041 BST, shares in Filtronic were up 4.94% at 8.5p.