Filtronic profits up despite coronavirus crisis

Filtronic profits up despite coronavirus crisis

FILTRONIC has reported an increase in revenue and profits in a trading statement for the end of its financial year.

The Yeadon-based communications technology manufacturer said that its board expects, subject to audit, revenue of approximately £17.2, up from £15.9m the previous year, representing growth of 8%.

Adjusted operating profit is about £0.4m, up from £0.2m, and adjusted earnings of £1.2m, up from £0.7m.

The company said that 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.

It reported that it maintained manufacturing capability during the crisis with no staff sickness but it said it has had to furlough some staff recently because of a delay on customer delivery schedules.

It said: “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.”

It added: “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.”

Filtronic said the sale of the Telecoms Antenna Operation was completed in January.

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).

The company’s share price fell nearly 5% in trading yesterday to £7.85 after opening at £8.25.

Shares fell to a low of £5.50 in March after having hit a high of nearly £12 in February.