Filtronic boosted by 4G market

Electronics company Filtronic has reported a 56% rise in half-year sales to £16.4m on the back of soaring demand for 4G-related technology.

The Newton Aycliffe firm, which makes products for the mobile phone market, saw a 129% year-on-year rise in sales in its wireless division to £11.9m in the six months to the end of November 2012.

The main driving force remained demand in the US for the next generation of mobile technology- known as 4G – with a number of network roll-outs starting to pick-up speed.

While the group’s wireless division made an operating profit of £1.8m – compared to a £0.4m loss in H1 2012 – the firm’s broadband business endured a disappointing first half.

Sales in the division stood at £4.5m, a 16% drop on last year's comparable period, resulting in an operating loss of £1.3m.

Overall, the group made an operating profit of £0.1m in the period, compared to a £1.2m loss in H1 2012.

“Wireless continues to extend its participation in a broadening number of OEM and operator programmes for its filter and combiner products,” the company said.

“Whilst demand levels of individual product lines remain subject to quite large month-on-month variability, the aggregate position is positive and healthy.

“Wireless has recently received orders in excess of £14m for the supply of large quantities of LTE/4G interference mitigation filters that prevent 4G services interfering with domestic television receivers in Europe.

“Subject to a demanding production schedule, shipments for the initial phase of this product will be largely completed by the middle of calendar 2013, straddling the group's financial year end. There are prospects for follow-on business after this initial surge. Wireless is also at an early stage of developing opportunities for a similar product in other European markets.

The firm added that losses in broadband activity should be ameliorated in the second half as long-term customer programmes in defence and commercial millimetre wave technology products begin to build.

“Overall, the board anticipates that stronger than expected wireless results will more than compensate for the shortfall in broadband, and that group performance will be ahead of current market estimates for both turnover and profits, with Wireless sales likely to represent nearly 80% of the total group revenues for FY2013,” it said.