Producer of wireless telecoms and critical communications products Filtronic plc (LON:FTC) saw its shares dip during the Thursday session, following a comparatively less productive half-year period.
The Group’s revenues narrowed from £8.9 million during the first half of the financial year, to £7.5 million for the second half.
Similarly, Filtronic adjusted operating profit dropped from £0.4 million to £0.3 million, while adjusted EBITDA for the period finished at £0.6 million once again.
The headline figure, though, was that the company swung from a £0.4 million operating profit during the first half, to a £0.5 million operating loss during the second half. Further, its net debt widened from £2.5 million to £3.6 million.
In brighter news, the company noted impressive operational developments:
· “Successfully disposed of the Telecoms Antenna Operation for an initial consideration of $5.5m potentially increasing with a profit share in excess of mutually agreed gross profit targets.
· Strong demand from our lead OEM customer for Orpheus product and initial demand for our next-generation Morpheus, both being deployed in 5G X-Haul applications.
· Good progress made to onshore production of public safety products to the USA with production expected to commence in Q1 calendar year 2020.
· Expansion programme implemented at Sedgefield to increase manufacturing capacity and production volumes of X-Haul and defence transceiver products. Machinery now embedded and optimised to improve operational efficiency.
· New design contract wins for High-Altitude Pseudo-Satellite (HAPS) mmWave “X-Haul” applications and other 5G mmWave equipment markets.”
Filtronic comments
Speaking on the update, Chairman Reg Gott, said:
“The sale of the FTAO business enables us to implement an effective operating structure across a more efficient footprint and provides us with a stronger balance sheet to further develop and grow the business. The Board is committed to revenue growth initiatives and intends to strengthen the sales and marketing organisation and extend engineering capacity across a range of disciplines during the course of this calendar year.”
“The recent design wins to develop X-Haul derivatives to major players in the High-Altitude Pseudo-Satellite and 5G mmWave equipment markets were key milestones on our strategic roadmap. However, this NRE funded development work will run through the next 16 months meaning revenue will largely not be recognised until FY2021, slightly limiting our progress in H2 profit development. These new contracts enable us to further extend our engineering capability, know-how and highlight our ability to develop a competitive position across a wider market”.
Investor notes
Following the update, the company’s shares dipped 13.21% or 1.47p, to 9.66p per share 06/02/20 14:10 GMT. Analysts from finnCap reiterated their ‘Corporate’ rating of Filtronic stock. The company’s market cap is £21.25 million.
