Filtronic Regulatory News (FTC)

Filtronic plc

("Filtronic" or the "Company")

 16 August 2011

Posting of Annual Report & Notice of AGM

Filtronic plc, the designer and manufacturer of microwave electronics products for the wireless telecoms backhaul infrastructure market, confirms that the Annual Report and Accounts for the year ended 31 May 2011 ("2011 Annual Report and Accounts"), the Notice of the Annual General Meeting and a Form of Proxy were posted to shareholders on 12 August 2011. Filtronic has also today submitted a copy of the above documents to the National Storage Mechanism where they will shortly be available for inspection at www.Hemscott.com/nsm.do

The Company's Annual General Meeting is to be held at 11:00am on Friday 23 September 2011 at the offices of Pinsent Masons LLP, 1 Park Row, Leeds LS1 5AB.

A copy of the 2011 Annual Report and Accounts is also available on the Company's website: www.filtronic.co.uk.

Enquiries:

Compliance with Disclosure and Transparency Rule ("DTR") 6.3.5 - Extracts from the Annual Report and Accounts

The information below, which is extracted from the 2011 Annual Report and Accounts, is included solely for the purpose of complying with DTR 6.3.5 and the requirements it imposes on issuers as to how to make public annual financial reports. It should be read in conjunction with the Company's Preliminary Announcement issued on 2 August 2011. Together these constitute the material required by DTR 6.3.5 to be communicated to the media in unedited full text through a Regulatory Information Service. This material is not a substitute for reading the full 2011 Annual Report and Accounts. Page numbers and cross-references in the extracted information below refer to page numbers and cross-references in the 2011 Annual Report and Accounts.

The information contained in this announcement and in the Preliminary Announcement does not constitute the Filtronic group's ("Group") statutory accounts as defined in section 240 of the Companies Act 1985 but is derived from those accounts. The statutory accounts for the year ended 31 May 2011 have been approved by the Board and will be delivered to the Registrar of Companies following the Company's Annual General Meeting which will be held on 23 September 2011. On 2 August 2011, the Group announced its draft financial statements for the year ended 31 May 2011. The auditors have subsequently reported on those accounts, their reports were unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under s498(2) or (3) Companies Act 2006 or equivalent preceding legislation.

Directors' Responsibility Statement

With regard to the 2011 Annual Report and Accounts, the directors confirm that to the best of their knowledge:

·; the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole; and

·; the Chairman's Statement and Business Review which form part of the Report of the Directors, includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole, together with the description of the principal risks and uncertainties that they face.

Principal Risks and Uncertainties

The following description of principal risks and uncertainties is set out on pages 7 and 8 of the 2011 Annual Report and Accounts. This description is repeated here solely for the purpose of complying with DTR 6.3.5.

-Introduction

Filtronic supplies microwave and base station filter products for the wireless telecommunications market. The business is in a fast-changing sector with a small number of sophisticated customers, demanding performance standards and international competition, all of which pose risks to the business.

Market

Filtronic supply a niche range of products to a small number of large OEM customers for both the Broadband and Basestation filter businesses as well as an as yet small number of network operators in the Basestation business. The loss of any of these customers, including Ceragon Networks, or any material reduction in orders from any such customers may have a material adverse effect upon Filtronic's financial condition. With the rapid evolution of product technology and other corporate decisions the size of Filtronic's addressable market may be affected. Filtronic may also fail to forecast market movements correctly so missing opportunities or wrongly predicting product longevity.

Manufacturing

In most of the products, production is demand led and customers may vary their requirements from the business at short notice, which also impacts inventory management. Customers in these businesses expect consistent high quality product and reducing prices, hence Filtronic depends on control of its operating environment, including management of security of supply in its supply chain, and the provision of correctly designed technological solutions including the achievement of target cost reduction plans. Non-performance in these areas risks a diminished market position.

All Filtronic's products are provided to customers after detailed qualification testing. However, this may not test all aspects of the product's design and manufacturing process or may not ensure that the product is viewed as fit for purpose in its intended use. Identification of these types of problem after release of product to customers creates the risk of being required to rectify such product defects. Historically such work has not had a substantial impact on the financial performance of the business, although a major defect, leading to a field recall, could do so in future.

The Broadband business operates a leased manufacturing location, located within the facility of Filtronic's major semiconductor supplier. The Basestation business relies for the manufacture of its products on a large Chinese turnkey manufacturer that provides favourable supply and financing terms. The loss of this supplier or a material change to supply terms could have a material adverse effect on the Group.

Technology

Filtronic's product competitiveness is strongly influenced by technology choices at product concept stage and throughout execution of design to product launch. For products in the production cycle, technology insertion is often required as a means of achieving price reductions, which underpin sales. The market is time sensitive and opportunities may be lost if the technology Filtronic develops is not appropriate or ready for exploitation to match market demand, so having an adverse effect on business performance.

Filtronic's ability to remain competitive in terms of technology and product design is also underpinned by retaining key staff, the loss of whom could seriously impact the rate of introduction of new products and technologies.

Financial management

A large proportion of sales is denominated in US dollars with the cost base substantially in sterling, which may therefore create margin risks that may not be recoverable through price changes. This risk is mitigated to some extent by purchasing some input materials in US dollars.

Filtronic has sold four divisions of the Group in the past seven years. Filtronic has provided warranties in support of these transactions, covering areas including product liability for an initial period and usually environment risks on freehold property and tax risks for longer specified periods. Filtronic has received claims on the sale of the Wireless Infrastructure and Defence Electronics business, some of which have been settled or rejected, and may receive claims in future related to these current and future commitments.

Goodwill and Going Concern

With the acquisition of the Basestation business, goodwill and intangibles have arisen. If the Basestation business does not develop as anticipated then this may have an adverse impact upon business performance which may result in a write down of the goodwill and/or the intangibles.

The directors have considered going concern matters and whilst they have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, it remains possible that sufficient events with material adverse impacts on the business could occur such as to change this expectation.