Filtronic Current Year Results To Be "Considerably" Below Expectations
(Alliance News Via Acquire Media NewsEdge) LONDON (Alliance News) - Filtronic PLC said Monday it expects its performance for the financial year 2015 to be considerably lower than market expectations, as contract delays and the repositioning of its Wireless business weigh on its performance.
The company, which makes products for the wireless telecommunications market, said its Wireless business had seen revenues of GBP23 million in the year ended May 31, down from GBP31 million the year earlier, while Broadband revenues rose to GBP9.7 million from GBP8.1 million.
As a result of this, and due to costs of establishing its new antenna operations, Filtronic said it expects to report a small operating loss of not more than GBP500,000 before exception items and amortisation for the recent financial year year.
The company's Wireless business saw a number of potentially large projects delayed past the year end, and whilst it expects some of these delayed projects to deliver revenue in 2015, the timing and scale of revenues remain uncertain, it said.
In Broadband, the company has completed the relocation of its operations to a lower-cost facility in County Durham, England and said the lower costs and improving order volumes helped the business see a small underlying profit at the end of the year.
Filtronic said that since the start of calendar 2014 it has concentrated a significant amount of its resources into taking a higher share of original equipment manufacturer programmes in the growing 4G telecommunications market.
Whilst it has continued to address projects from operators, the number of opportunities has been decreasing, and the programmes where it has developed a product have been subject to customer delays, cutting the addressable market for its Wireless business, the company said.
Filtronic is repositioning the Wireless business, and it said that it is currently working on twice the number of wireless infrastructure projects as it was a year ago. The business has secured a number of new platform wins for base-station filters, combiners and tower mounted amplifiers, and three antenna design wins.
The company noted that the original equipment manufacturer qualification process takes longer than the more cyclical project-based business on which it had previously focussed. As a result, the first of the new design wins will begin volume manufacture in the first half of the financial year 2015. Filtronic expects to see volume growth in the second half of 2015 and beyond.
As a result of the new programmes and work on existing projects, Filtronic said it expects the Wireless business's revenues in the first half of fiscal 2015 to be similar to 2014. However, as a result of its repositioning, Filtronic has pushed back its expectations for the timing of the Wireless business's growth by around 12 months.
It said it will announce its full year results July 28.
Filtronic shares were down 1.5% at 38.15 pence at the open Monday.
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