Trading Update and Notice of Results

RNS Number : 1672C

Filtronic PLC

17 June 2021

 

Filtronic plc

 ("Filtronic")

TRADING UPDATE AND NOTICE OF RESULTS

Improved second-half lifts earnings and net cash at year-end

Filtronic plc (AIM: FTC), the designer and manufacturer of products for the aerospace, defence telecoms infrastructure and critical communications markets, is pleased to provide the following trading update for the financial year ended 31 May 2021 ("FY2021").

Financial highlights

Following a softer first half, trading improved in the second half of the year to deliver revenue broadly in line with market expectations. However, a favourable sales mix at higher margins has delivered EBITDA* slightly ahead of market expectations. The board therefore expects, subject to audit, to report FY2021 revenue of approximately £15.6m (FY2020: £17.2m) and EBITDA of approximately £1.8m (FY2020: £1.2m). Cash at bank on 31 May 2021 was £2.9m (30 November 2020: £1.6m). Net cash (net of all lease obligations except right of use property leases) at 31 May 2021 was £1.9m (30 November 2020: £0.4m).

Operational highlights

The final quarter benefited from demand recovery for critical communication products as Covid-19 related delays to new installations and system upgrades in the USA started to ease. Particularly pleasing was the receipt and shipment of our first significant orders for our new "best-in-class" Tower Top Amplifier ("TTA"). The new TTA product range is now finding its way into a significant number of new critical communications projects in the USA. The modular nature of the product and our flexible manufacturing centre in Salisbury, Maryland enables us to respond quickly to output scaling requirements. 

Orderbook and demand profiles in the aerospace and defence market remain stable and we continue to make good progress with the product development programme wins secured over the last 12 months. We held sufficient component inventory to maintain a steady run rate of production throughout the year with quality and yield continuing to improve as we further optimise our processes from recent investments in our hybrid assembly line.

Roll-out of 5G networks has been challenging during the pandemic and some countries have consequently delayed the release of E-band licences necessary for the deployment of our products. We have however managed to maintain stable order flow through the year, albeit at reduced volumes, and we continue to engage with key customers regarding next generation products.

Market conditions across the electronics industry are expected to be impacted by supply chain challenges and component shortages for several months. We have asked customers to pay increased attention to forecasting and adequacy of forward order cover, and this has gone some way to providing a stronger opening order book for the new financial year.

We continued to expand our sales reach in the second half of the year and signed a further two agents to address the Southwest and South-Central territories of the USA. In addition, we signed-up a further two agents in Western Europe covering France, Germany, Spain and Austria, together with a new agent in South Korea. These agents provide an established "in-territory" presence to augment our direct sales channel to help build the opportunity pipeline.

We were extremely pleased to close the year by being recognised with the prestigious Queen's Award for Enterprise in International Trade 2021. Filtronic's award recognised the growth in export sales of its microwave and mmWave solutions as a key enabling technology for initial 5G deployment.

The results for the financial year ended 31 May 2021 will be announced on 3 August 2021.

Richard Gibbs, Chief Executive Officer, said "Across the year our markets progressively regained composure and notwithstanding ongoing disruptions from Covid and Brexit, they are now starting to show some welcome signs of recovery. Our recent performance demonstrates the core strength and underlying robustness of the Filtronic business. Despite some concerns associated with delivery of key semiconductor components, we start the new financial year with a strong order book and cause for optimism".

* earnings before interest, taxation, depreciation and amortisation

Enquiries:

Filtronic plc	Tel. [phone] or [e-mail]
Richard Gibbs (Chief Executive Officer)
Michael Tyerman (Chief Financial Officer)
finnCap Limited	Tel. [phone]
Jonny Franklin-Adams / Tim Harper (Corporate Finance)
Alice Lane / Sunila de Silva (ECM)
Walbrook PR Limited	Tel. [phone] or [e-mail]
Paul Vann	Mob. [phone]

Notes:

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

 

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