Filtronic plc (AIM: FTC), the designer and manufacturer of products for the wireless telecoms and critical communications markets, announces its half year results for the six months ended 30 November 2019 ("H1 2020").
· Revenue of £7.5m (H1 2019: £8.9m)
· Adjusted EBITDA¹ of £0.6m (H1 2019: £0.6m)
· Adjusted operating profit² of £0.3m (H1 2019: £0.4m)
· Exceptional costs of £0.8m (H1 2019: £nil)
· Operating loss of £0.5m (H1 2019: operating profit of £0.4m)
· Net debt (including IFRS16 lease liabilities) of £3.6m (31 May 2019: net cash of £2.5m)
· Net cash outflow from operating activities £2.8m (H1 2019: £0.9m outflow)
¹ Adjusted EBITDA is earnings before interest, taxation, depreciation, amortisation and exceptional items.
² Adjusted operating profit is operating profit before exceptional items.
· Successfully disposed of the Telecoms Antenna Operation for an initial consideration of $5.5m potentially increasing with a profit share in excess of mutually agreed gross profit targets.
· Strong demand from our lead OEM customer for Orpheus product and initial demand for our next-generation Morpheus, both being deployed in 5G X-Haul applications.
· Good progress made to onshore production of public safety products to the USA with production expected to commence in Q1 calendar year 2020.
· Expansion programme implemented at Sedgefield to increase manufacturing capacity and production volumes of X-Haul and defence transceiver products. Machinery now embedded and optimised to improve operational efficiency.
· New design contract wins for High-Altitude Pseudo-Satellite (HAPS) mmWave "X-Haul" applications and other 5G mmWave equipment markets
Commenting on the outlook, Reg Gott, Chairman, said: "The sale of the FTAO business enables us to implement an effective operating structure across a more efficient footprint and provides us with a stronger balance sheet to further develop and grow the business. The Board is committed to revenue growth initiatives and intends to strengthen the sales and marketing organisation and extend engineering capacity across a range of disciplines during the course of this calendar year.
The recent design wins to develop X-Haul derivatives to major players in the High-Altitude Pseudo-Satellite and 5G mmWave equipment markets were key milestones on our strategic roadmap. However, this NRE funded development work will run through the next 16 months meaning revenue will largely not be recognised until FY2021, slightly limiting our progress in H2 profit development. These new contracts enable us to further extend our engineering capability, know-how and highlight our ability to develop a competitive position across a wider market".