Electronics manufacturer moves into the red as it suffers ‘set-back’ in growth plans

Filtronic, the designer and manufacturer of microwave electronics products, has moved into the red after suffering a “set-back” in its growth plans after a client announced it was putting a programme roll-out on hold.

The Shipley-based firm, which supplies the wireless telecoms infrastructure market and adjacent markets, this morning published is half-year results to 30 November 2018.

The firm has reported pre-tax losses of £941,000; a drop from pre-tax profits of £582,000 for the same period in 2017. Its revenues for the six month period also dropped by £2.4m; from £12.8m in 2017 to £10.4m in the 2018 results.

The firm warned of reduced demand in August, when its full-year results saw revenues drop £11m.

Reg Gott, chairman of Filtronic, said: “The news received in December from our mMIMO launch client that the end-customer was putting its roll-out programme on hold and thus significantly reducing its forecast demand until further notice, was a significant set-back to our growth plans. However, our client has confirmed that the programme is not cancelled and they will continue to sell and market our mMIMO products into the market.”

Gott added that “notwithstanding this setback”, the firm believed the outlook for the antenna market remained positive, with continued industry investment in network developments for 4G densification and 5G roll-outs.

“Subsequent to the December notice we have received a follow-on order for the balancing requirement of mMIMO for H2 which underpins our confidence in the sales outlook for the remainder of the year and this, combined with our solid platform of long-term business within critical communications, means we expect trading in H2 to be broadly similar to H1,” added Gott. 

The chairman added that Filtronic required “a little time to fully evaluate the ongoing status of the mMIMO programme” and complete a review of options for the antenna business. He added: “But, in the meantime, we are comfortable with our current cash position and cash flow outlook.”

“Our focus on high margin products and the strategic decision to target critical communications markets has been a key component of our strategy to mitigate the revenue volatility of network roll-outs in the telecoms market. This focus has provided us with a significant level of baseline business and improved visibility of future revenues, along with further opportunities to grow our product offering and customer base.”