Filtronic set to report loss for financial year ; electronics [Newcastle Journal (England)]
(Newcastle Journal (England) Via Acquire Media NewsEdge) ELECTRONICS firm Filtronic looks set to report a loss for its last financial year.
In a trading update, the County Durham-based company said that in the last quarter both its Wireless and Broadband businesses had traded in line with the board's expectations, the former delivering full-year unaudited revenues of Pounds 23m, compared to Pounds 31m in 2013, and latter reporting an increase from Pounds 8.1m to Pounds 9.7m.
However, the group said after central costs and the costs of establishing new antenna activity, it expects to report a "small operating loss, of not more than Pounds 0.5m", before exceptional items for the year ended May 31, 2014. The business had net cash at the year end of Pounds 2.5m.
Filtronics designs and manufactures microwave electronics products for the wireless telecoms infrastructure market.
The update said its Broadband business had continued to grow revenues for its new E Band radio products, with order cover now extending into the second half of the financial year ending May 31, 2015.
This section of the business had completed a relocation to the North East Technology Park in Sedgefield and the combined effects of the lower operating cost base with improving volumes had enabled it to achieve a small underlying profit.
In March, Filtronic issued an interim management statement referring to delays in a number of potentially large operator projects involving Filtronic Wireless.
The board still expects some of these projects to deliver revenue in the coming financial year, but the timing and extent of such revenues remains uncertain.
The trading update added that Filtronic had focused significant resources on increasing its share of long-term OEM programmes, which would benefit the Wireless business.
"As stated in the March Interim Management Statement, Filtronic is currently engaged on approximately twice the number of wireless infrastructure projects as was the case a year ago," the update said. "The OEM qualification process takes longer between design win and revenue generation than project-based business.
"However, the board believes that this strategy is repositioning the group for a period of sustained growth."
The update said existing operator projects and the start of the new OEM programmes should deliver Wireless revenues for the first half of the next financial year at a similar level to the second half of 2014.
The repositioning strategy, however, would impact on the growth trajectory of the Wireless business for the time being, meaning the board expected performance in the coming financial year to be "considerably lower" than current market expectations.
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