Filtronic swings to operating profit despite lower revenue

The AIM-traded firm said its adjusted EBITDa was £1.8m for the 12 months ended 31 May, however, rising from £1.2m, while its adjusted operating profit improved to £0.6m from £0.4m.

It swung to an operating profit of £0.6m, from a loss of £0.2m in the 2020 financial year, while basic and diluted earnings per share came in at 0.03p, compared to losses of 0.93p per share a year earlier.

Net cash at year-end, excluding right-of-use property leases, totalled £1.9m, up from £0.4m at the end of the prior year, while the company reported £2.5m of cash generated from operating activities, swinging from a total of £2.6m cash used in operating activities in 2020.

On the operational front, Filtronic said its “healthy” cash position would be used to drive further organic growth in its served markets, which were showing strong signs of recovery from the pandemic with a stronger order book, improved customer forecasts and increased opportunities.

It said it had been awarded a contract to develop and supply battlefield radio communications equipment valued at £1.3m through a new channel-to-market.

The firm's "best-in-class" Tower Top Amplifier, meanwhile, was supplied to “the market-leading original equipment manufacturer” in critical communications, and saw its first significant revenue recognition in the fourth quarter.

Filtronic expanded its direct and indirect sales channels in the United States, Europe and Asia during the period, through a mix of agents and distributors, to expand its sales reach.

“Our healthy cash reserves and continued generation of EBITDA provide a solid platform from which to build the business and make the necessary investments to facilitate further revenue growth,” said chairman Reg Gott.

“The biggest challenge we faced throughout the pandemic was customer engagement and new customer acquisition due to travel restrictions.

“We countered this by expanding our channels to market, across multiple territories, and executed on the marketing plan to raise the brand profile which has provided fresh momentum, stimulating a growing opportunity pipeline and a number of initial contract wins with key target customers.”

Gott said that alongside increased order-flow and strengthened customer forecasts, there were signs of pent-up demand in the company’s served markets, that it was positioning itself to capitalise on.

“The recent refresh of our strategic plan identified key objectives, milestones and the required advancement of our technology roadmap to further develop the business which we look forward to executing on over the coming year.”

At 1030 BST, shares in Filtronic were up 3.36% at 11.37p.