Sales and tighter controls put £117m in Filtronic pot

Jan 22 2008 by Peter McCusker, The Journal

A SERIES of asset sales and greater management cost control has left an electronics company employing 120 people in the region with cash reserves of £117m.

Filtronic recorded sales of £27.2m in the six months to November 30, 2007 – a rise of 51% on the same period in 2006 – with profits of £2.2m on these sales.

The Bradford-based company employs 120 people in its broadband division at a factory in Newton Aycliffe.

Late last year it sold its semiconductor division in the same building to US company RF Micro Devices for £12.5m.

Filtronic’s improvement in performance is due to a number of factors, according to analyst Mike Bloggs of Arbuthnot Securities.

He said: “There has been a marked improvement in the company’s performance. It has moved from a loss to a profit.

“Some parts of the business have seen higher demand in better market conditions.

“The company has offloaded a number of assets and there have been redundancies. There appears to better overall management control on costs.”

Filtronic say its cash reserves will be partly used to offload its pension fund. It is also looking for a far greater shareholder return and plans a special dividend to shareholders at the end of the financial year.

Chairman John Poulter said: “Looking into the second half of this financial year, defence had made progress in its order intake and is expected to demonstrate some improvement in trading. Point to point, having seen exceptional growth in the first half, is expected to trade at a lower level although substantially ahead of the equivalent period in the previous year.”

During the past six months, Filtronic has sold its US defence arm and £6.1m of surplus properties.

The company specialises in the manufacture of microwave radio mobile telephone infrastructure – its point to point division – and sophisticated electronic aerospace defence equipment.