Interim Statements Nov 2023
Interim Statements Nov 2023
Interim Statements Nov 2023
FILTRONIC PLC
(“Filtronic”, the “Company” or the “Group”)
HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2023
Filtronic plc (AIM: FTC), the designer and manufacturer of products and sub‐systems for the aerospace,
defence, telecoms infrastructure, space and critical communications markets, announces its half year results
for the six months ended 30 November 2023 (“H1 2024”).
Financial Highlights
H1 2024 H1 2023
Revenue £8.5m £8.4m
Adjusted EBITDA¹ £0.2m £1.0m
Operating (loss)/profit (£0.4m) £0.5m
(Loss)/profit for the period (£0.5m) £0.5m
Basic (loss)/earnings per share (0.24p) 0.22p
Diluted (loss)/earnings per share (0.24p) 0.21p
Cash generated from/(used in) operating activities £1.8m (£0.2m)
At 30 Nov At 31 May
2023 2023
Net cash when including right of use property leases £1.2m £0.3m
‐Net cash when excluding right of use property leases £2.4m £1.6m
¹ Adjusted EBITDA is earnings before interest, taxation, depreciation, amortisation and exceptional items.
Operational Highlights
Revenue and profit expected to be ahead of market expectations for FY2024 and FY2025.
Contract award of £3.4m in the period from the market leader in the high‐growth, low earth orbit
(“LEO”) satellite communications equipment market using Filtronic’s innovative proprietary Cerus
32 product.
Good progress made on the development project to supply the European Space Agency (“ESA”)
with next generation space payload communication systems for £3.2m.
Award of £170k grant from the Defence Technology Exploitation Programme (“DTEP”) to undertake
a project titled ‘Low cost and SWAP high density packaging for future RADAR’.
Healthy cash position enables continued investment in revenue growth initiatives to deliver the
strategic plan.
Post‐period Highlights
Additional contract awards of £12.6m, announced on 20 December 2023 and 6 February 2024,
from the market leader in the high‐growth, low earth orbit (“LEO”) satellite communications
equipment market using Filtronic’s innovative proprietary Cerus 32 product.
Development contract from the market leader of low earth orbit (“LEO”) satellite communications
equipment for £150k to develop an E‐band payload module.
Contract award of £4.5m on 19 December 2023 from BAE Maritime Systems for the development
and manufacture of advanced RF electronic modules.
Contract award from QinetiQ valued at £2.0m announced on 15 January 2024 for the development
of a radio‐frequency subsystem to be deployed as a vehicle mounted land system or helicopter
mounted solution.
Commenting on the outlook, Jonathan Neale, Chairman, said: “We are encouraged by the recent successes
we have had in the execution of our strategic plan and targeted growth initiatives. The impact of this is
expected in H2 FY2024 as we expect revenue to be ahead of full year market expectations and profitability
to be materially ahead. Our confidence stems from the recently announced contract wins with customers in
LEO space, aerospace and defence markets which were particularly pleasing given both the quantity and
value, as well as the significance and quality of the new customers added to our customer portfolio.
Consistent with our stated growth objectives we anticipate year‐on‐year forecast revenue improvements but
recognise that timing of major project decisions and order placement may span financial years resulting in a
growth trajectory that may sometimes be non‐linear despite delivering robust compound growth. As success
is delivered, we will continue to invest for growth whilst managing the rest of the cost base, where possible,
to drive stronger profits and margins“.
Enquiries
Notes:
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.
Forward‐looking statements
Certain statements in this half‐yearly financial report are forward‐looking. Where the half‐yearly financial
report includes forward‐looking statements, these are made by the directors in good faith based on the
information available to them at the time of their approval of this report. Such statements are based on
current expectations and are subject to a number of risks and uncertainties, including both economic and
business risk factors that could cause actual events or results to differ materially from any expected future
events or results referred to in these forward‐looking statements. Unless otherwise required by applicable
law, regulation or accounting standard, the Group undertakes no obligation to update any forward‐looking
statements whether as a result of new information, future events or otherwise.
Chairman’s Statement
Jonathan Neale
Chairman, 5 February 2023
Condensed Consolidated Interim Income Statement
For the period ended 30 November 2023
1 Adjusted EBITDA is defined as profit before interest, taxation, depreciation, amortisation and exceptional items
which is a non‐GAAP metric used by management and is not an IFRS disclosure.
Condensed Consolidated Interim Statement of Comprehensive Income
For the period ended 30 November 2023
The total comprehensive (expense)/income for the period is attributable to the equity shareholders of the
parent company Filtronic plc.
Condensed Consolidated Interim Balance Sheet
At 30 November 2023
The total equity is attributable to the equity shareholders of the parent company Filtronic plc.
Company number 2891064
Condensed Consolidated Interim Statement of Changes in Equity
For the period ended 30 November 2023
1 Company information
Filtronic plc is a company registered and domiciled in the United Kingdom and is listed on the AIM market
of the London Stock Exchange. The Company’s registered number is 2891064. The address of the
Company’s registered office is Filtronic plc, Filtronic House, Unit 3, Airport West, Lancaster Way, Yeadon,
West Yorkshire, LS19 7ZA.
Copies of the Company’s Annual Report and interim financial report are available from the Company’s
registered office or the Company’s website at www.filtronic.com.
2 Basis of preparation
Whilst the financial information included in this preliminary statement has been prepared on the basis of
the requirements of IFRSs in issue, this statement does not itself contain sufficient information to comply
with IFRS.
These financial results for the six months ended 30 November 2023 do not comprise statutory accounts
within the meaning of Section 434 of the Companies Act 2006. The interim report should be read in
conjunction with the Annual Report 2023, which includes annual financial statements for the year ended
31 May 2023. Those accounts have been reported on by the Company's auditor and delivered to the
registrar of companies. The report of the auditor was (i) unqualified (ii) did not include a reference to any
matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii)
did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The condensed consolidated financial statements for the six months ended 30 November 2023
consolidate the financial statements of the Company and all of its subsidiaries (together referred to as the
“Group”). Transactions between Group companies, which are related parties, have been eliminated upon
consolidation and therefore do not require disclosure.
The condensed consolidated financial statements for the six months ended 30 November 2023 and
comparative period have not been audited. The interim financial report for the six months ended 30
November 2023 was approved by the Board on 5 February 2023.
3 Going Concern
In accordance with corporate governance requirements the directors have undertaken a review of
forecasts and the Group’s cash requirements to consider whether it is appropriate that the Group
continues to adopt the going concern assumption.
The directors have reviewed the projected cash flow and other relevant information, including a ‘severe
but plausible’ scenario and have a reasonable expectation that the Group has adequate resources to
continue in operational existence and therefore it remains appropriate to adopt the going concern basis
in preparing the interim financial report for the six months ended 30 November 2023.
4 Accounting estimates and judgements
The preparation of the financial statements requires the use of accounting estimates and judgements that
affect the application of accounting policies and reported amounts of assets and liabilities, income and
expenses. The accounting estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of the future that are believed to be reasonable
under the circumstances. Actual results may differ from the expected results. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the revision affects both current and future
periods. The accounting estimates and judgements that have a significant effect on the financial
statements are considered in the Filtronic plc Annual Report for the year ended 31 May 2023 which can
be found on the Filtronic website. Unless stated below there is no material change to those judgements
from the Annual Report in the basis of calculation.
5 Segmental Analysis
Operating Segments
IFRS 8 requires consideration of the identity of the Chief Operating Decision Maker (‘CODM’) within the
Group. In line with the Group’s internal reporting framework and management structure, the key strategic
and operating decisions are made by the Chief Executive Officer, who reviews internal monthly
management reports, budget and forecast information as part of this. Accordingly, the Chief Executive
Officer is deemed to be the CODM.
The CODM has identified one operating segment within the Group as defined under IFRS 8. In turn, this is
the only reportable segment of the Group as the entities in the Group have similar products and services,
production processes and economic characteristics. Therefore, there is no allocation of operating
expenses, profit measures or assets and liabilities to specific commercial markets.
Accordingly, the CODM assesses the performance of the operating segment on financial information
which is measured and presented in a manner consistent with those in the financial statements by
reference to Group results against budget.
The Group profit measures are adjusted operating profit and adjusted EBITDA, both disclosed on the face
of the consolidated income statement. No differences exist between the basis of preparation of the
performance measures used by management and the figures in the Group financial statements.
The Group has three customers representing individually over 10% of revenue each and in aggregate 82%
of revenue. This is split as follows:
Customer A – 37% (HY 2023: 41%)
Customer B – 32% (HY 2023: 17%)
Customer C – 13% (HY 2023: 24%)
5 Segmental Analysis (continued)
Revenue by Destination
The revenue presented is based on the geographic location of customers receiving the product/service
from the continuing operations.
The revenue presented is based on the Group deriving revenue from product sales and those received
from Non‐Recurring Engineering (“NRE”) at a point in time when the performance obligation is satisfied.
Other operating income relates to grants received for plant and machinery and R&D innovation whilst
R&D tax credits claimed under the RDEC scheme are also recognised in operating profit.
7 Finance costs
Contract liabilities are invoices raised in advance of NRE work completed for customers that will be
recognised as income once the performance obligation of the contract has been met. The majority of NRE
contracts are invoiced with a proportion of the contract value upfront which is recognised as revenue,
over time, across the life of contract at each milestone based on the percentage of the overall contract
value achieved at that performance obligation.
A capital grant of £150k was awarded in the period towards the cost of plant and equipment for new
plastic encapsulation capability.
11 Share Capital
All shares are allotted, called up and fully paid. Holders of the ordinary shares and entitled to retrieve
dividends when declared and are entitled to one vote per share at meetings of the company.
Holders of the ordinary shares are entitled to receive dividends when declared and are entitled to one
vote per share at meetings of the Company.
12 Share Premium
£000
Cash at bank earns interest at floating rates based on daily bank deposit rates.
At 30 November 2023, the Company had a £3.0m invoice discounting facility in place with Barclays Bank
plc against the UK debtor book and a $4.0m factoring facility with Wells Fargo against the US debtor book.
There were no drawings on either of the facilities at 30 November 2023 (31 May 2023: undrawn).