Filtronic replaces chief executive after losses and critical review

FILTRONIC has replaced its chief executive just weeks after announcing £5.3m half-year losses and a review found revenues will not improve as forecast.

Chief financial officer Rob Smith has replaced Alan Needle as chief executive with immediate effect.

The Shipley-based designer and manufacturer of microwave electronics products for the wireless telecoms infrastructure market announced at the end of January that the end of a major contract resulted in a loss-making first half.

For the six months to the end of November 2014, the company reported revenue of £7.3m compared with £20.1m for the same period last year – a fall which resulted in pre-tax losses of £5.3m.

This morning, the company said that following recent meetings with customers and a detailed and critical appraisal of the status of key engineering developments, “it is now clear that the revenues from Wireless in the latter months of the second half will not build up as quickly as expected.”

In particular, the company said it is unlikely that any of the antenna projects in development will produce significant revenue before the May 31 year end.

As a result, the board now expects revenues for the Wireless business will be around £10m at year end.

Filtronic said it has set in motion a series of cost-saving measures involving redundancies both in the UK and overseas.

“This will have a modest positive impact on profitability and cash flow in the remaining three months of the financial year. The main benefit of these actions will not be felt, however, until the start of the forthcoming financial year.”

The Broadband business continues to trade in line with market expectations, the company said.

As at February 28, net cash amounted to £1m, while the company said it is investigating “a number of measures” to strengthen the balance sheet with permanent capital.