Filtronic Regulatory News (FTC)

31 January 2023

Filtronic plc

("Filtronic" or "the Company")

New Contract Award and Trading Update

Filtronic expands presence in satellite communications market

Filtronic plc (AIM: FTC), the designer and manufacturer of products and sub-systems for the aerospace, defence, telecoms infrastructure, space, and critical communications markets, is pleased to announce a new contract win with a leading global provider of low earth orbit ("LEO") satellite communications equipment, a new customer for Filtronic.

The contract, valued in excess of £2.0m, with revenue expected to be recognised in calendar year 2023, requires customisation and delivery of Filtronic's Cerus solid state power amplifier ("SSPA") module. The modules, and the related control boards, will be installed in selected ground stations for commercial trials of the E-band earth station antenna links to and from the LEO satellite. This is the first time that high bandwidth E-band frequencies have been used in an operational LEO application.

Originally developed for early High Altitude Pseudo-Satellites ("HAPS") applications, the Cerus Power module is based on Filtronic proprietary MMIC chip design and is provided in a small form factor module as a scalable SSPA. The Cerus module is available in 4, 8, 16 and 32-way configurations offering power ranging from 4W to >10W at E-band frequencies.

Revenue in H1 FY2023 was £8.4m (FY2022: £8.0m) representing 5% growth, with £1.0m of adjusted EBITDA. Strong demand has carried through to H2 which is reflected by the current order book of £17m but we are currently experiencing a shortage on a number of unique semiconductor components which is impacting our ability to meet customer schedules in the second half. Our efforts to find the components from alternative sources in the secondary market have so far been unsuccessful. Consequently, this near-term timing issue will result in weaker trading in FY2023 than current market expectation. As these temporary shortages unwind, we expect an uplift in revenue and a resumption to plan in FY2024.

Richard Gibbs, Chief Executive Officer, commented: "We are delighted to engage with a highly respected new customer at the leading edge of LEO space communications. As the number of subscribers to LEO telecommunication services grow, maintaining network speed will become an increasingly important consideration for the service operator. E-band represents a viable licenced frequency band for the critical communication links to and from the orbiting satellite. Whilst terrestrial telecom companies have successfully used Filtronic E-band technology in their backhaul links for many years, this new contract award vindicates our decision to adapt Filtronic's proprietary mmWave products for the emerging commercial LEO satellite market".

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The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018 (as amended) ("UK MAR").