Year-End Trading Update
30 June 2020
Filtronic plc
(the "Company" or the "Group")
TRADING UPDATE
Filtronic plc (AIM: FTC), the designer and manufacturer of products for the critical communications, wireless telecoms and defence & aerospace markets, is pleased to provide the following trading update for the financial year ended 31 May 2020 ("FY2020").
Antenna Business Sale
As previously reported, the Telecoms Antenna Operation was sold during December 2019 and the sale completed in January 2020. All transitional arrangements agreed with the buyer have now been satisfactorily completed. Consequently, the numbers presented below represent only the continuing operations of the Group.
Financial Highlights
Trading during the second half of the year was broadly in line with market guidance despite some Covid-19 related disruption in the final quarter. The Board therefore expects, subject to audit, to report FY2020 revenue of approximately £17.2m (FY2019: £15.9m), representing growth of 8%, adjusted operating profit of approximately £0.4m (FY2019: £0.2m) and adjusted earnings before interest, taxation, depreciation, amortisation and exceptional items ("EBITDA") of £1.2m (FY2019: £0.7m ). Cash at bank at 30 May 2020 was £2.0m (30 Nov 2019: £0.1m). Net cash (net of all lease obligations except right of use property leases) at 31 May 2020 was £0.7m (30 Nov 2019: net debt of £2.2m).
Operational Highlights
A strong order book entering the second half of the financial year sustained the business during the Covid-19 crisis. In February 2020 the Company established a Covid Business Continuity Team with the purpose of providing and sustaining a fully compliant and safe working environment whilst maintaining full operational capacity to fulfil customer commitments. The Company is pleased to report that it maintained a 24/7 manufacturing capability throughout the period whilst all employees who could work from home were enabled to do so. The extensive measures taken to ensure staff safety, naturally came at a cost for adjustments to operational layouts and processes, operational efficiency and additional headcount. However, most importantly, the Company experienced zero confirmed Covid-19 related staff sickness whilst the average employee attendance rate during the last quarter of the period was over 98%. The support of our entire staff must be recorded as having been exemplary and we are grateful to all of them for their resilience and hard work during a difficult time for everybody.
We continued to receive orders from existing clients during the period but constraints imposed by Covid-19 slowed the rate of new business acquisition and development activities. As year-end approached, we were advised of a short-term delay to two key client delivery schedules. We responded to this by implementing a furlough programme for a number of manufacturing staff from early June and expect to recall these employees progressively during July and August. We did not however suffer any order cancellations or deterioration in commercial terms.
Our new self-calibrating Tower Top Amplifier product for the US Public Safety Communications market was launched as planned and has been adopted by our lead client, from whom we expect the first orders in early FY2021. Our new 5G X-Haul Transceiver product (Morpheus, replacing Orpheus) was also qualified by and launched to our lead X-Haul client during the period and we anticipate the first production units to ship in late summer 2020.
Outlook
There is considerable uncertainty in both the macroeconomic environment and the markets in which we operate. As the focus of concern regarding the impact of Covid-19 progressively shifts from public health to the economy, that uncertainty will increase. Whilst we have entered FY2021 with a good order book, it would be imprudent to be anything other than cautious on the outlook for the year ahead and consequently, in common with many of our peers, we will not be providing guidance for the expected performance of the business at this time.
We expect to release our Preliminary Results on 4 August.
Enquiries:
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Filtronic plc |
Tel. 0113 220 0000 or investor.relations@filtronic.com |
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Reg Gott (Executive Chairman) |
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Michael Tyerman (Chief Financial Officer) |
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finnCap Limited |
Tel. 020 7220 0500 |
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Jonny Franklin-Adams / Hannah Boros (Corporate Finance) |
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Alice Lane / Sunila de Silva (ECM) |
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Walbrook PR Limited |
Tel. 020 7933 8780 / 07768 807631 |
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Paul Vann |
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Notes:
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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