AIM-listed electronics firm posted revenues of £21m and adj operating profit of £1.8m
Companies: Filtronic plc
AIM-listed microwave electronics designer Filtronic plc has reported solid half-year results for the six months to 30 November 2016, showing a dramatic increase in revenue, a swing to profit, and positive net cash.
The Company announced revenues of £21.6m for the first half of 2017, up from £4.5m in the previous period, a five-fold increase. The lion's share came from sales of Filtronic Wireless (£18.7m) with the remainder coming from Filtronic broadband sales.
Adj operating profit swung to £1.8m from a £4.1m loss in H1 2016, and net cash was up at £800k from -£300k in May.
Operationally, the firm said its wireless division enjoyed a strengthened sales team and improved demand for mission critical public safety filters, whilst its broadband division signed a multi-year agreement with a major defence contractor.
Broker Panmure Gordon welcomed the "impressive" interims, saying revenue growth was driven by strong orders from within the Wireless division:
"These improvements stem from on-going product innovation and the cost re-alignment programme (under taken last year). As a consequence, the results highlight that Filtronic has made the right strategic decisions over the last couple of years and is well placed to benefit from the growth in mobile telco infrastructure market."
Chairman Reg Gott was positive about the results, but cautioned that the first half was going to be better than the second:
"...we would caution that the phasing of customer order fulfilment for FY 2017 has been significantly biased to the first half and, consequently, we expect revenues to be lower in H2 2017."
He said there was limited risk for the firm from the UK's decision to leave the European Union due to the nature of Filtronic's business. The firm has, however, enjoyed modest currency benefits due to the fall in Sterling:
"... given the international nature of our trading, the effect on the Group will be relatively minor. We have, however, seen a modest gain from the fall in the value of sterling as the majority of our sales revenue is in US dollars."
Filtronic shares fell 8% as the market opened on Monday despite the positive update.
