County Durham tech manufacturer Filtronic has sounded a note of caution amid Brexit and Covid-19 uncertainties, despite chalking up an 8% rise in full year revenues.
The Sedgefield firm, which makes antennas and filters for the telecoms market, posted revenue of £17.2m for the year ended May 31, up from £15.9m, following a boost from the sale of its antenna business for £4.1m in January.
Adjusted EBITDA was £1.2m, an increase from £700,000, and last year’s operating profit of £234,000 also increased to £381,000.
The firm posted a pre-tax loss of £400,000, compared to a £100,00 profit last year, after adding exceptional costs of £600,000.
During the year the company also invested in the Sedgefield site, installing and commissioning machinery to double capacity and improve product yields.
Operating costs grew from £7.6m to £9.3m, a substantial part of which relates to rising salary costs after boosting headcount significantly, growing its workforce from 100 to 141 during the year as it took on new people in manufacturing, research and development, and administration.
Soon after selling its antenna business, the Covid-19 pandemic struck, leading to the company furloughing some staff.
Last month, however, Filtronic said it was starting to bring back the workers off the back of a new contract from an existing customer.
The AIM-listed business has now said the slowdown in new business acquisition over the fourth quarter, due to Covid-19 related constraints, means that it has entered the new financial year with a slightly reduced order book compared to last year.
It said: “Although we were very pleased to be able to announce a key two-year follow-on contract from our lead defence client early in the new year, there remains considerable uncertainty within our end markets.
“Many of our customers had increasing difficulty in firming up future commitments, leading to a number of programmes being pushed out. Consequently, we entered the new financial year with a high level of confidence in our ability to perform under the restrictions presented by Covid-19, should conditions deteriorate again, but with a higher degree of uncertainty around customer requirements in terms of volumes and delivery schedules.
“This uncertainty is compounded by the imminent conclusion of the Brexit transitional period with, as yet, little clarity regarding trading terms with Europe from January 2021. As a consequence, we remain cautious in our outlook for the current year.”
Meanwhile, in a separate announcement, Filtronic announced the appointment of Richard Gibbs as the company’s new CEO.
Rob Smith resigned from his position as CEO in October 2019 and chairman Reg Gott had taken on the role in the meantime.
Mr Gibbs, who starts on September 1, has led a number of business operations supplying telecoms, aerospace, defence, medical and oil & gas markets and joins from Micross Components Ltd where he has been managing director since 2016.
News source: Business Live