Why Filtronic’s fortunes are set to rocket

Armed with contracts from Elon Musk’s SpaceX and BAE Systems, Nat Edington has set off like a rocket as CEO of Filtronic. He tells Sheryl Moore why the company is once again poised for global take-off.

“We’re in a new phase at here at Filtronic,” says Edington. You don’t say! Twelve months on after taking over at the helm, Edington has spearheaded a transformation that has seen the RF components manufacturer partner with the world’s leading space and defence companies.

Filtronic’s share price has surged to highs not seen in more than a decade. This time five years ago, its share price was 8.5p – it  has recently been trading at around 95p. Elsewhere revenue has tripled, and a game-changing partnership with SpaceX has put the business on the international technology map.

Filtronic was founded in 1977 by Professor John David Rhodes, who was a lecturer in the department of electrical and electronic engineering at the University of Leeds. The company began life as an electronics design and manufacturing business and rapidly became a specialist supplier to the telecommunications industry, developing expertise in complex electronic components at a time when global telecommunications were rapidly evolving.

However, as markets began to change dramatically, margins became increasingly challenging as global competition intensified.

The pivot towards high-performance RF (Radio Frequency), microwave, and mmWave (millimeter-wave) technology came as a strategic response and, by the time Eddington, arrived Filtronic had already begun its metamorphosis into a cutting-edge RF.

But a global scale-up strategy was needed, and Edington was put in charge. Leveraging his background in technology commercialisation, Eddington has quickly repositioned Filtronic, focusing on high-growth defence and space markets, and the financials speaks for themselves.

Two years ago, Filtronic was turning over around £16m. In February this year, the company revealed its interim results for the first half of FY2025 which saw revenue soar by more than 200% to £25.6m, and adjusted EBITDA at £8.7m. Analysts have predicted full year turnover to come in at around £50m. However, in trading statement this morning, Filtronic said it  expects to exceed current market expectations in a move that pushed its shares up by 6.5% to 109p.

The figures make Edington’s ambitious target of reaching £100m within the next few years looking increasingly achievable.

Central to this transformation is contracts with Elon Musk’s SpaceX. Filtronic and SpaceX’s strategic partnership began in April 2024 and has been expanded to increase the supply of E-band SSPA modules – a key component of the Starlink satellite system which provides high-speed internet access worldwide. So far, the contracts are worth around £40m.

The company’s technology focus is razor-sharp – operating at the most challenging end of the RF spectrum. For SpaceX, they’re providing communications technology in the extremely high-frequency A-band, a capability that sets them apart globally.

While the contract has driven significant growth, some market commentators have questioned the company’s dependency on a single customer.

However, Eddington is quick to address these concerns. “We’re very aware of customer concentration,” he says. “Our sales objectives are 95% non-SpaceX. We’re actively building a diverse customer base across defence and space markets.”

Only last month, Filtronic revealed a new contract to develop cutting edge-feeder link technology as part of the European Space Agency (ESA) and Viasat’s Direct-to-Device (D2D) initiative.

Edington says Filtronic has significantly enhanced its presence in the defence sector with strategic contracts wins that demonstrate the company’s technological prowess beyond space communications.

Recent wins include a contract with BAE Systems to supply its RF electronic modules to the company’s maritime business, and QinetiQ, a global defence and security company. QinetiQ awarded Filtronic the contract to design and supply full RF chain sub-system for a new radar system that will be used for land, sea, and air applications.

He says: “We now have radar contracts across all three defence domains. This isn’t just about winning contracts – it’s about establishing Filtronic as a critical technology partner in defence communications.”

Current projections suggest the company’s sales pipeline is now evenly split between defence and space markets – a significant strategic achievement. The company is targeting R&D investment of 12% to 13% of revenue, focusing on developing technologies that can be deployed across multiple defence and commercial applications.

“Our underlying business is growing substantially,” Eddington explains. “These contracts allow us to penetrate key markets and develop long-term customer relationships.”

Eddington’s background as a design engineer turned commercial leader gives him a unique perspective. With an early passion for electronics that saw him building circuits at home, he studied physics and microelectronics at university.

He started out as a design engineer, developing chip and system designs. But early in his career he decided to move away from pure technical roles and, armed with an MBA, he transitioned into commercial management.

Most recently, Eddington led a technology business in Edinburgh, transforming a small team of eight into a 30-strong operation focused on electric vehicle and battery management technology. The company successfully attracted US investment.

“My technical background allows me to ask the right questions,” he explains. “But now it’s about growing businesses, penetrating markets, and making strategic technology development decisions.”

The potential for a takeover has been discussed by market watchers. Filtronic has issued warrants to SpaceX as part of an expanded strategic agreement, allowing SpaceX to purchase up to 5% of Filtronic’s existing share capital.

“These warrants are not a simple equity play,” Edington explains. “They’re a carefully structured partnership mechanism that aligns both companies’ long-term interests. Only 5% of warrants have vested, and crucially, future warrant tranches are tied to specific technological developments, not just volume of business. Any future warrants will vest based on new technologies that are valuable not just to SpaceX, but to the broader market.”

With the share price rising and the business becoming increasingly attractive, Eddington is pragmatic. “You can’t control everything,” he says. “But our focus is on building a successful, sustainable business.”

This means continuing to invest in capacity. A new manufacturing facility will support the company’s growth plans for the next five years, with Filtronic now employing around 170 staff and actively recruiting. Eddington also hints at further substantial contract announcements in both defence and space markets.

“We’re confident about our trajectory as we scale to capitalise on future opportunities.”  Eddington states. “The market opportunities are vast, our technology is world-leading, and we have the team and strategy to execute which has worked tirelessly to bring new programmes to fruition across the defence and space markets.”