REG - Filtronic PLC - Final Results
Tue 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250729:nRSc8837Sa&default-theme=true
RNS Number : 8837S Filtronic PLC 29 July 2025
29 July 2025
Filtronic plc
("Filtronic", the "Group, or the "Company")
Audited Full Year Results for the Year Ended 31 May 2025
Transformational year of growth, scale and innovation
Filtronic plc (AIM: FTC), the designer and manufacturer of products for the
aerospace, defence, space and telecommunications infrastructure markets,
announces its full year results for the 12 months ended 31 May 2025.
Financial Highlights
FY2025 FY2024 % change
Revenue £56.3m £25.4m 121%
Adjusted EBITDA* £17.0m £4.9m 247%
Operating profit £13.4m £3.6m 272%
Profit before taxation £13.4m £3.4m 294%
Profit for the year £14.0m £3.1m 352%
Basic earnings per share 6.42p 1.45p 343%
Diluted earnings per share 6.05p 1.41p 329%
Cash at bank £14.5m £7.2m 101%
Net cash when excluding right of use property leases £12.3m £5.2m 137%
Net cash £10.8m £4.2m 157%
Cash generated from operating activities £13.8m £6.3m 119%
*Adjusted EBITDA is earnings before interest, taxation, depreciation,
amortisation, share-based payments and share warrant charge.
Operational Highlights
Strong execution against growth strategy
· Transformational performance reflecting successful delivery against
Filtronic's growth strategy. Project milestones with the Group's key strategic
partner providing the foundations for continued close relationship and further
contract expansion.
· Strengthened go-to-market capability with new leadership team appointments,
restructuring of the commercial team to better align with prime contractors
and the opening of a new Cambridge office attracting top-tier RF and software
engineering talent.
· Move to a new custom-built facility in Sedgefield underway for completion H1
FY2026, doubling the Group's UK manufacturing footprint, to meet growing
demand for the Group's products.
Expanding engagement across Space and Aerospace and Defence markets
· Record order intake in the Space sector, including a landmark agreement with
SpaceX, and new contract awards with Viasat, European Space Agency and Airbus.
· Strengthening position in the Defence sector, demonstrated by the recent
airborne radar application contract with Leonardo and progress made with the
QinetiQ and BAE Maritime Systems programmes.
Continued innovation to support scaling
· Expanded development into higher-frequency RF bands, notably V Band, unlocking
new market opportunities and achieved an important milestone with the
successful launch of Prometheus, the highest-power Solid State Power Amplifier
on the market.
· Accelerated transition from Gallium Arsenide (GaAs) to Gallium Nitride (GaN)
technology enabling higher performance for satellite and defence systems with
the GaN based product range to be launched in 2026.
Confident Outlook
· Healthy cash position enables continued investment in revenue growth
initiatives to deliver the strategic plan.
· The convergence of space, aerospace and defence is driven by the growing need
for high-frequency, secure, and resilient communications infrastructure which
provide the Group with supportive long-term structural growth drivers across
Filtronic's key markets.
· Entered FY2026 with strong commercial momentum, a robust order book, and an
organisation capable of scaling further.
· Expanding pipeline across key markets leaves the business in a strong position
to meet market expectations for FY2026.
Commenting on the results, Nat Edington, Chief Executive, said: "FY2025 has
been a transformative year for Filtronic, showcasing the successful execution
of our growth strategy. Our record revenue growth and landmark wins in the
Space and Defence sectors reflect the trust placed in us by global players and
that our technology is meeting real world demand. As we enter FY2026, we are
confident in our trajectory, with a strong order book, healthy cash position,
and a strengthened leadership team in place. The transition to GaN technology,
expansion into higher-frequency bands, and our move to a new, larger
manufacturing facility will enable us to scale effectively and capitalise on
the significant opportunities ahead."
Enquiries:
Filtronic plc Tel. 01740 618800
Nat Edington (Chief Executive Officer) or investor.relations@filtronic.com (mailto:investor.relations@filtronic.com)
Michael Tyerman (Chief Financial Officer)
Cavendish Capital Markets Limited Tel. 020 7220 0500
Jonny Franklin-Adams, Isaac Hooper, Trisyia Jamaludin (Corporate Finance)
Sunila de Silva (Corporate Broking)
Alma Strategic Communications Tel. 020 3405 0205 or filtronic@almastrategic.com
Caroline Forde, Hannah Campbell, Rose Docherty
About Filtronic:
Filtronic is at the leading edge of advanced microelectronics globally,
specialising in the design and manufacture of mission-critical communication
networks. Operating from two global manufacturing sites and three engineering
centres of excellence, the company delivers solutions that span the full RF
spectrum. An extensive patent portfolio highlights Filtronic's ongoing drive
for innovation and technological leadership.
With a track record of over 45 years', Filtronic's technology is trusted
across high-performance sectors including space, aerospace, defence, telecoms
infrastructure and critical communications. The company develops core IP
building blocks and transforms them into highly customised solutions for
high-growth target markets. Filtronic's expertise enables seamless data
transmission, delivering greater bandwidth, lower latency and enhanced
connectivity.
Filtronic has successfully coupled this engineering expertise with investment
in state-of-the-art production equipment that enables the rapid transition of
a turn-key solution from product development to full scale, high-quality
manufacturing, at volume. The strategic markets of Low Earth Orbit (LEO)
space, aerospace and defence are the focus of current product development
programmes, where Filtronic can add significant value, realise long term
sustainable margins and deliver shareholder value.
Headquartered in Sedgefield, UK, Filtronic is listed on the AIM market of
the London Stock Exchange.
Forward-looking statements
The Chairman's statement and Chief Executive's review include statements that
are forward looking in nature. 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 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
For the year ended 31 May 2025
FY2025 has been an excellent year for Filtronic plc, marked by exceptional
operational execution, accelerated growth, and strategic wins across our core
markets. Building on the momentum established in FY2024, we entered this year
with conviction-and have delivered record-breaking performance across multiple
fronts.
Financial review
Trading in the second half of the year materially exceeded expectations,
driven by our ability to consistently meet and exceed project milestones with
our key customer. This enabled deeper engagement with them, providing us with
the funding and products to replicate this success more widely in future
years.
With our expanded manufacturing capacity now fully operational, the Group
delivered revenue of £56.3m (FY2024: £25.4m), operating profit of £13.4m
(FY2024: £3.6m) and adjusted EBITDA of £17.0m (FY2024: £4.9m) -more than
double and triple the previous year's results, respectively.
We ended the year in a strong financial position with £14.5 million of cash
at bank (FY2024: £7.2m) and £12.3 million in net cash (FY2024: £5.2m),
providing a solid foundation for further investment and strategic growth.
Operational review
Filtronic operates in complex, fast-evolving markets-ranging from aerospace
and defence to space and critical communications. While we anticipate
continued macroeconomic and geopolitical volatility in the coming 12 months,
the underlying demand for advanced RF and mmWave solutions remains strong.
We have a clear five-year product and technology roadmap and have made
targeted investments in our customer-facing functions to ensure close
alignment with client needs. These efforts are already yielding greater market
insight, sharper product focus, and promising new business opportunities.
Innovation remains central to our strategy, driving the development of
advanced technologies that enhance secure, high-performance connectivity
across diverse domains and platforms. We anticipate the newly launched
Prometheus V band amplifier and the development of a semiconductor chipset
platform for rollout in early 2026 will both be important avenues of future
growth.
Post period end, we secured the largest contract in Filtronic's recent history
of $32.5m (£24.0m). This followed new contract awards from Leonardo in
defence and Airbus in satellite communications, affirming the value of our
technology across aerospace, defence, and space infrastructure domains.
These wins not only demonstrate the technical excellence of our engineering
teams but also reflect the confidence that global industry leaders place in
Filtronic to deliver mission-critical communications solutions.
Dividend Policy
Our strategic focus remains firmly on long-term value creation. Given the
significant growth opportunities ahead, we are not proposing a dividend for
FY2025. We believe retaining capital to invest in technology development,
talent acquisition, and infrastructure expansion is the most effective way to
drive sustainable shareholder returns.
Sustainability and Talent
We operate in long-cycle, high-growth markets where sustained innovation and
execution is critical. To continue to succeed, we must continue to be a
partner of choice-delivering innovative, high-value products through a
globally connected supply chain and customer network.
A truly sustainable organisation is one that can attract, retain, and develop
top talent. In the last twelve months, we have expanded to four engineering
and two manufacturing sites offering exciting roles for both early-career and
experienced professionals.
Resource efficiency is also a key strategic priority. Whether through energy,
materials, water, or time, we are focused on reducing waste and maximising
productivity across all functions. Our upcoming move to a new consolidated
manufacturing facility will play a pivotal role in this regard-seamlessly
integrating the additional capacity brought online during FY2025 and setting
the stage for smooth operations in FY2026 and beyond.
Outlook
We enter FY2026 facing headwinds from a weakened USD but with a growing
pipeline and increased customer engagement across multiple markets. With a
robust order book, world-class talent, and a clear innovation strategy, we are
well-positioned to lead in the converging sectors of communications, aerospace
and defence, and space.
We remain confident that by focusing on what is within our control-engineering
quality, customer intimacy, and operational agility-we are positioned for
long-term relevance and success.
Our typical sale, design-in, and production cycles range from one to three
years, offering the opportunity to grow and extend the long-term visibility of
our customer order book.
I would like to extend my sincere thanks to our employees, customers,
shareholders, and partners for their continued commitment and support.
Jonathan Neale
Chairman
28 July 2025
Chief Executive's review
As I reflect on the financial year 2025, and my first as CEO, I am extremely
proud of the progress we have made. It is clear that this has been a
transformational period for Filtronic - one defined by commercial success,
operational scale-up, and continued technical innovation, all of which
translated into a strong financial performance for FY2025.
Financial performance
Our financial performance in FY2025 reflects delivery against our growth
strategy. Revenue increased by 121% to £56.3m (FY2024: £25.4m), building on
the 56% growth already achieved in the prior year. Profitability improved,
with operating profit increasing to £13.4m (FY2024: £3.6m) and adjusted
EBITDA rising to £17.0m (FY2024: £4.9m) and gross margins benefited from a
greater proportion of business coming from higher-value space and aerospace
and defence contracts, proving our ability to ramp quickly and respond to
market needs.
Operations and innovation
A defining moment in the year was delivering significantly increased demand
from our key customer in the space sector. This required a step change in
production volumes and operational complexity, which we achieved through
targeted investment in production equipment, talent, and process automation.
Our ability to deliver on time, at scale, and to exacting quality standards
has built our credibility with this strategic customer and demonstrated our
ability to support long-term, high-volume programmes. We are also continuing
to see wider engagement with other established verticals of the European space
market, demonstrated by the contract wins with Viasat and the European Space
Agency, supplying technology for the direct to device market, in addition to
an order to supply Airbus for its system on the OneWeb constellation.
In parallel, we advanced our organisational structure, required to position
Filtronic for the next phase of growth. This included strengthening our
leadership team with key new appointments, developing our commercial team to
enhance and accelerate customer engagement and implementing improvements in
programme management to ensure on-time delivery of more complex programmes.
We have also maintained a focus on the development and execution of our
technology roadmap to ensure Filtronic remains at the leading edge of RF and
mmWave innovation. This year, we advanced key technology and product
developments that support our growth market opportunities for several years to
come.
Our commitment to innovation remains central to our strategy. This year, we
have progressed the transition of core technologies from Gallium Arsenide
(GaAs) to Gallium Nitride (GaN) processes, enabling higher power, improved
efficiency, and greater thermal performance-critical advantages for aerospace
and defence and satellite communications applications. Alongside this, we
expanded development efforts into other high-frequency RF bands, most notably
V Band, which is anticipated for wider market adoption. A significant
milestone in FY2025 was the launch of Prometheus, the highest power Solid
State Power Amplifier ("SSPA") on the market, capable of very high frequency
communications for Geostationary satellites. FY2026 will see a launch of a
range of products based on our GaN technology, which will achieve power levels
and performance that will be world leading.
Our markets
The convergence of space, aerospace and defence, and communications is
accelerating - driven by the need for high-frequency, secure, and resilient
communications infrastructure and Filtronic is well-positioned to capitalise
on this significant medium-term market opportunity. Key growth drivers include
accelerating satellite launches, global 5G base station rollouts, rising
military expenditure, and a shift toward higher spectrum frequencies and
advanced component technologies such as GaN. With a strong foundation in
high-frequency connectivity solutions and a sharpened organisational
structure, we are investing in go-to-market strategies and infrastructure to
expand our customer orderbook and enhance long-term revenue visibility.
Our technology and product roadmaps have been designed specifically to support
these markets and capitalise on the convergence and emerging needs over the
next several years. Our roadmaps are aligned with key programmes to ensure we
have the right products and capabilities in time and support our growth
projections.
People and investment
The investment in our commercial team, including a new Chief Commercial
Officer, has already ensured an expansion and acceleration of our
opportunities. In FY2026, we will further evolve our go-to-market model to
build strategic relationships earlier in programme lifecycles and align more
closely with the buying behaviours of large primes and government-led
initiatives. We will also deepen our activities in the European and US markets
while actively expanding our pipeline and opportunities in other global
regions.
This year, we successfully scaled our engineering function to support more
complex and concurrent programmes. This included the opening of our Cambridge
office, which has allowed us to tap into a larger pool of engineering talent.
This has already proved to be a great success, with rapid expansion of the
team, and three development programmes already running there. The mission of
the Cambridge site is also to support our strategic initiative of moving up
the value chain, by expanding our capabilities beyond pure RF into digital,
software and system level expertise.
Outlook
We enter FY2026 with good commercial momentum, a robust order book, and an
organisation capable of scaling further. Early trading has been encouraging,
with continued demand from space and aerospace and defence customers and a
growing pipeline of opportunities. We are focused on broadening the customer
base, completing key technology developments and relocating our
state-of-the-art manufacturing site in Sedgefield to a new facility at the
same science and technology park.
The medium-term outlook is positive, and I am confident in our ability to
build a sustainable high-growth, high-performance business that plays a
critical role in the future of global communications infrastructure.
Nat Edington
Chief Executive Officer
28 July 2025
Financial Review
I'm delighted to be a member of a team that delivered strong revenue growth
for the second consecutive year, underpinned by rising demand within the
high-growth space market. This sustained performance has strengthened the
balance sheet and enabled the Group to invest, at pace, ensuring we maintain
forward momentum to capitalise on the market opportunity ahead.
It has been a year of significant progress, with the investments made enabling
us to add capacity, build capability and enhance our product offerings. Our
long-term strategy remains firmly on track with the markets we serve
benefitting from structural growth and macroeconomic tailwinds.
FY2025 saw us expand our Strategic Partnership with SpaceX for further
alignment of E-band technology. The initial strategic partnership signed in
April 2024 was the enabler for the revenue growth of 121% and the adjusted
EBITDA growth of 248% to £17.0m (2024: £4.9m), which saw the market
expectations upgraded several times in the year.
Revenue growth has been exceptional over the last two years and while our lead
customer accounts for a significant percentage of our revenue in FY2025, we
expect this concentration to decrease going forward as we execute on a growing
pipeline of opportunities elsewhere in the market, in addition to material
contracts we have already announced for delivery in FY2026 and beyond.
Revenue
Group revenue increased to £56.3m (2024: £25.4m) demonstrating an ability to
scale our operation to meet customer demand requirements. This manufacturing
know-how and ability to ramp up production quickly has been developed from
years of supplying the high-volume telecoms infrastructure market providing a
core competence which is highly valued by our customers in the space and
aerospace and defence market.
Revenue growth this year has been driven by our lead customer's expansion of
their constellation, contributing 83% (2024: 48%) of revenue in FY2025.
As we move into FY2026, we are determined to diversify our customer base. New
space order wins were recently announced with Viasat/European Space Agency and
Airbus in the LEO market whilst further contracts were awarded with aerospace
and defence customers such as Leonardo. We also have material revenue to be
recognised from contracts with the European Space Agency, BAE Maritime and
QinetiQ, won in the prior year, which will positively impact FY2026 and
beyond.
Revenue from the aerospace and defence sector grew by 11%, reflecting early
contributions from new programmes with recently acquired customers. We see
momentum building to deliver year-on-year growth in the coming year to this
sector. This outlook is supported by compelling sector fundamentals, including
a shortage of RF engineering talent, increased focus on sovereign capability,
greater engagement by defence primes with the UK supply chain, and a continued
rise in defence spending across Western governments.
Demand in the critical communications market normalised following elevated
levels last year, which were driven by the rebound from the global
semiconductor shortage. While we expect trading in this sector to remain
broadly flat over the coming years, our customer is important and highly
valued, and we remain committed to servicing their long-term needs.
IFRS 15 'Revenue from Contracts with Customer' requires the SpaceX share
warrants to be treated as a non-cash variable consideration payable to the
customer. Therefore, there was a charge to revenue in the year of £1.3m
(2024: £nil). Further information can be found in note 10.
Operating costs and headcount
Operating costs increased by 68% in the year to £21.0m (2024: £12.5m)
reflecting the accelerated speed at which we are scaling the business to
capitalise on the market opportunities. As revenue has grown, we have
realigned our cost base to support a larger, more capable organisation that
can sustain higher revenue levels and deliver against a broader technology
offering and customer base.
The largest area of investment was in our engineering team, where we
significantly increased headcount to support both product development and
customer delivery. Our success in high-growth markets such as space, servicing
high-profile customers, has helped attract an impressive calibre of talent.
However, recognising the RF skills gap in the UK, we proactively expanded our
access to talent by opening a new engineering design centre in Cambridge at
the end of December 2024. The site scaled quickly and has already proven to be
an effective addition.
To maintain flexibility and manage workload peaks, we continue to partner with
external engineering firms and contract engineering resource on a variable
cost basis, especially where niche skills or additional capacity is required.
Manufacturing headcount also increased in the year to meet output demand. This
investment proved critical in supporting delivery performance, contributing to
an "A" grade awarded by our lead customer in a recent supplier performance
evaluation.
Salary-related costs remain the Group's largest overhead, representing 69% of
the total operating costs, increasing by 78%, or £6.4 million, and were a
large driver of the overall uplift in operating costs. This is reflected in
our headcount numbers which increased to 186 (2024: 133) at 31 May 2025 and is
analysed below:
Number 2025 2024
Manufacturing 89 73
Research and development 72 39
Sales and marketing 6 7
Administration 19 14
Total headcount 186 133
Engineering capability remains central to our long-term growth strategy. It is
particularly encouraging that, in addition to increasing capacity, we also
added new skills. This enhanced our ability to deliver more complex customer
programmes, accelerate product development, and expand our technology roadmap
which positions the Group well to execute on its strategic objectives.
Engineering spend as a percentage of revenue is a critical key performance
indicator for the Group, reflecting its importance in driving long-term,
sustainable growth. Whilst this metric temporarily lagged earlier in the year
due to the pace of revenue growth, a strong recruitment drive in the second
half enabled us to close the year just below target at 12% (2024: 11%).
Maintaining focus on this metric ensures we are appropriately resourced to
capitalise on growth opportunities, accelerate product innovation, and
maintain a competitive edge through continued technology leadership.
Other costs increased in line with the ongoing scale-up of the business. This
included additional administration resource to manage higher transaction
volumes, as well as increased IT infrastructure, recruitment fees and
insurance costs. The opening of the new Cambridge engineering site contributed
to a rise in property-related expenses. These investments are aligned with our
strategy to build a scalable and resilient business, capable of supporting a
significantly higher level of trading and sustained long-term growth.
The Group continues to be active in securing grant funding to further support
growth initiatives and investment. We benefitted from a further £0.1m of
grant income in the year from the Defence Technology Exploitation Programme
("DTEP") and secured a further £0.2m towards the cost of key engineering
capex which is critical for execution of the V-band product roadmap. We are
actively engaged in several open calls across both regional funding schemes
and national technology grant programmes and remain optimistic about obtaining
the funds. This will play a role in continuing to support our innovative
roadmaps and capital investment plans.
Adjusted EBITDA
The Group utilises an alternative performance measure ("APM") to provide a
clearer view of underlying business performance. This APM is adjusted EBITDA
as it measures the quality of earnings without the impact of non-cash expenses
such as depreciation, amortisation and share-based payments, including the
charge associated with SpaceX share warrants which is recognised against
revenue.
Adjusted EBITDA for the year was £17.0m (2024: £4.9m) representing a 248%
increase whilst operating profit was £13.4m (2024: £3.6m) representing a
272% increase. This improvement was driven by stronger gross profit on higher
revenues, supported by a more favourable sales mix. Notably, the reduced
proportion of low margin 5G telecommunications equipment which is
characterised by its highly competitive price sensitivity contributed to this
improvement in margin.
The table below shows the reconciliation of operating profit delivered at
£13.4m (2024: £3.6m) to adjusted EBITDA of £17.0m (2024: £4.9m).
2025 2024
Reconciliation of operating profit to adjusted EBITDA £000 £000
Operating profit 13,442 3,610
Depreciation 1,315 945
Amortisation 537 287
Share warrant charge 1,303 -
Share-based payments 414 47
Adjusted EBITDA 17,011 4,889
Taxation
Our tax strategy is aligned with our core values and fits within our overall
corporate governance structure. Our strategy ensures that we comply with all
tax laws wherever we do business and that we pay all taxes that
we are legally required to pay when they fall due. To safeguard our
reputation as a responsible taxpayer we do not participate in any tax
planning arrangements that do not comply with either the legal interpretation
or the spirit of tax laws.
A tax credit of £0.7m (2024: tax charge of £0.2m) was recognised in the
year. The Group benefits from R&D tax credits, due to the advancement of
science and technology in the new products we develop, which lowers the amount
of taxable profit on qualifying R&D activities. We also make use of the
Annual Investment Allowance ("AIA") which offers tax relief on capital
expenditure purchases and utilise first year allowances on capital purchases
above the AIA threshold.
Research and development costs ("R&D")
Total R&D costs in the year before capitalisation and amortisation of
development costs were £6.7m (2024: £2.8m). The Group incurred engineering
costs on a mix of customer funded developments and progression of the
technology roadmap.
The Group remains committed to investing in R&D as a key driver for future
revenue growth and consequently measures R&D spend as a KPI. Key areas of
spend in the year included product development for space applications in both
the ground station and the payload, private networks and aerospace and
defence. The year ahead will see us continue to invest in the development of
our own strategic technology roadmap and proprietary intellectual property
("IP"), enabling us to build long-term shareholder value in the years ahead.
Where product development is customer specific, we seek to receive a
Non-Recurring Engineering ("NRE") charge to maintain a healthy flow of cash
during the development phase of engineering projects and ensure commitment
from our customer. When developing our own technology roadmap and IP, we
invest from our own cash reserves. Technology developed for the LEO space
market, across multiple frequency bands, in both ground station applications
and the payload have been developed exclusively from internal funds this year.
Consequently, we capitalised £1.5m of development costs in the year (2024:
£0.7m).
Recruitment of RF engineers remains a significant industry-wide challenge.
However, we are encouraged by recent successes in attracting new talent across
our four UK engineering development sites. To further strengthen our
workforce, we are focused on building an organisation fit for the future by
increasing graduate recruitment and expanding our apprenticeship programme,
ensuring a pipeline of skilled engineers to support our growth ambitions. This
aligns well with our sustainability strategy to provide high-quality jobs in
the local community.
The Group capitalises its development costs in line with IAS 38. A
reconciliation of R&D costs before capitalisation and amortisation can be
seen in the table below along with details of our conservative approach to
capitalisation of R&D:
2025 2024
Reconciliation of R&D costs £000 £000
R&D costs in income statement 5,625 2,408
Capitalisation of development costs 1,496 677
Amortisation of development costs (440) (245)
R&D cash spend 6,681 2,840
When capitalising development costs, an impairment review is undertaken of
each development programme to test the carrying value does not require
impairment in line with IAS 36.
Capital expenditure - plant and machinery and right of use assets (excluding
property leases)
An elevated level of capital expenditure was undertaken in the year to support
expansion plans including initial construction work on the new
state-of-the-art facility at Sedgefield which will serve us well for the next
phase of growth. Plant and machinery investment related to automated test
providing the business with the capability to service other frequency bands in
development and new production lines added to deliver the scale up of the
operation. The total amount of capital purchased was £4.0m (2024: £1.5m).
Warranty provision
In line with industry practice, the Group provides warranties to customers
over the quality and performance of the products it sells. Reflecting a full
risk analysis of current commercial contracts at 31 May 2025, the warranty
provision was £0.2m (2024: £0.4m).
Dilapidation provision
The Group leases facilities at four sites in the UK and one in the USA with
each of the leases requiring the site to be restored to its original
condition. At 31 May 2025, the dilapidation provision was £0.3m (2024:
£0.0m).
Cash position and banking facilities
The Group recorded an increase in cash and cash equivalents to £14.5m (2024:
£7.2m) at the year-end. Cash generated from operating activities in the year
was £13.2m (2024: £6.3m) as adjusted EBITDA performance drove cash
generation albeit with an increase in working capital synonymous with improved
trading.
Net cash, when including all debt except property leases at the end of the
period, was £12.3m (2024: £5.2m), whilst overall net cash including property
leases was £10.8m (2024: £4.2m).
The Group's banking facilities are provided by Santander UK plc ("Santander").
The Group has a £5.0m Revolving Credit Facility ("RCF") with Santander which
was signed in October 2024. This provides a high-level of cash headroom for
future growth of the business. As at 31 May 2025 the facility was undrawn
(2024: undrawn). Our covenants under this facility are debt service cover and
interest cover measures, which have both been met throughout the year with
substantial headroom available.
Regular reviews take place of our foreign currency cash flows. The Group
undertakes hedging only where there are highly probable future cash flows and
to hedge working capital exposures. The Group does most of its trading with
customers in US dollars which creates a requirement to put in place a level of
hedging contracts against the US dollar surplus that is expected to arise.
Going concern
In assessing going concern, the Board have considered:
· The principal risks faced by the Group which are discussed within the 'Risk
management' section of the Annual Report;
· The financial position of the Group including forecasts and financial plans;
· The healthy cash position at 31 May 2025 of £14.5m (2024: £7.2m) and the
additional headroom available through the undrawn RCF of £5m (2024: undrawn);
and
· Economic headwinds with the potential for customers to reassess their
priorities, with opportunities postponed or curtailed.
Following the above considerations, the directors are satisfied that the Group
has adequate financial resources to continue in operational existence for a
period of at least 12 months from the date of this report. Accordingly, the
going concern basis has been adopted in the preparation of the Annual Report
for the year ended 31 May 2025.
Michael Tyerman
Chief Financial Officer
28 July 2025
The Board
The directors that served during the year ended 31 May 2025, and to the date
of this announcement, and their respective roles are set out below:
Jonathan Neale (Non-Executive Chairman)
Nat Edington (Chief Executive Officer)
Michael Tyerman (Chief Financial Officer)
Pete Magowan (Non-Executive Director)
John Behrendt (Non-Executive Director)
Consolidated Income Statement
for the year ended 31 May 2025
2025 2024
Note £000 £000
Revenue 2 56,318 25,432
====== ======
Adjusted earnings before interest, taxation, depreciation, amortisation, 17,011 4,889
share-based payments and share warrant charge
Amortisation of intangible assets (537) (287)
Depreciation of property, plant and equipment and right of use assets (1,315) (945)
Share warrant charge (1,303) -
Share-based payments (414) (47)
---------- ----------
Operating profit 13,442 3,610
Finance costs 3 (268) (332)
Finance income 4 213 83
---------- ----------
Profit before taxation 13,387 3,361
Taxation 6 662 (220)
---------- ----------
Profit for the year 14,049 3,141
====== ======
---------- ----------
Basic earnings per share 5 6.42p 1.45p
Diluted earnings per share 5 6.05p 1.41p
====== ======
The profit for the year is attributable to the equity shareholders of the
parent company, Filtronic plc.
Consolidated Statement of Comprehensive Income
for the year ended 31 May 2025
2025 2024
£000 £000
Profit for the year 14,049 3,141
---------- ----------
Other comprehensive income
Items that are or may be subsequently reclassified to profit and loss:
Currency translation movement arising on consolidation 154 (52)
---------- ----------
Total comprehensive income for the year 14,203 3,089
====== ======
The total comprehensive income for the year is attributable to the equity
shareholders of the parent company Filtronic plc.
All income recognised in the year was generated from continuing operations.
Consolidated Balance Sheet
at 31 May 2025
Restated
2025 2024
Note £000 £000
Non-current assets
Goodwill and other intangible assets 3,507 2,271
Right of use assets 4,546 3,756
Property, plant and equipment 4,508 1,153
Contract assets 7 1,302 1,302
Deferred tax assets 1,754 1,047
---------- ----------
15,617 9,529
---------- ----------
Current assets
Inventories 4,010 3,273
Trade and other receivables 12,169 6,550
Contract assets 7 3,504 1,303
Cash and cash equivalents 14,494 7,215
---------- ----------
34,177 18,341
---------- ----------
Total assets 49,794 27,870
---------- ----------
Current liabilities
Trade and other payables 9,119 5,406
Provisions 516 493
Deferred income 851 1,403
Lease liabilities 1,112 895
---------- ----------
11,598 8,197
---------- ----------
Non-current liabilities
Deferred income 247 132
Lease liabilities 2,573 2,121
---------- ----------
2,820 2,253
---------- ----------
Total liabilities 14,418 10,450
---------- ----------
---------- ----------
Net assets 35,376 17,420
---------- ----------
Equity
Share capital 8 10,800 10,798
Share premium 9 11,354 11,213
Share warrant reserve 6,109 2,605
Translation reserve (676) (522)
Retained earnings 7,789 (6,674)
----------12,16 ----------12,16
Total equity 35,376 17,420
====== ======
The total equity is attributable to the equity shareholders of the parent
company Filtronic plc.
Company number 2891064.
Nat Edington
Chief Executive Officer
Consolidated Statement of Changes in Equity
for the year ended 31 May 2025
Share capital Share premium Share warrant reserve Translation reserve Retained earnings Total equity
£000 £000 £000 £000 £000 £000
Balance at 31 May 2023 10,796 11,077 - (470) (9,862) 11,541
Profit for the year - - - - 3,141 3,141
Currency translation movement arising on consolidation - - - (52) - (52)
Share-based payments - - - - 47 47
New shares issued 2 136 - - - 138
Share warrants issued (note 10) - - 2,605 - - 2,605
---------- ---------- ---------- ---------- ---------- ----------
Balance at 31 May 2024 (restated) 10,798 11,213 2,605 (522) (6,674) 17,420
Profit for the year - - - - 14,049 14,049
Currency translation movement arising on consolidation - - (154) - (154)
-
Share-based payments - - - - 414 414
New shares issued 2 141 - - - 143
Share warrants issued - - 3,504 - - 3,504
---------- ---------- ---------- ---------- ---------- ----------
Balance at 31 May 2025 10,800 11,354 6,109 (676) 7,789 35,376
====== ====== ====== ====== ====== ======
Consolidated Cash Flow Statement
for the year ended 31 May 2025
2025 2024
£000 £000
Cash flows from operating activities
Operating profit 13,442 3,610
Share warrant charge 1,303 -
Share-based payments 414 47
Depreciation of property, plant and equipment and right of use assets 1,315 945
Amortisation of intangible assets 537 287
Movement in inventories (797) (531)
Movement in trade and other receivables (5,671) (1,235)
Movement in trade and other payables 3,762 1,749
Movement in provisions 24 129
Change in deferred income (437) 1,342
Tax paid (49) (16)
---------- ----------
Net cash generated from operating activities 13,843 6,327
---------- ----------
Cash flows from investing activities
Capitalisation of development costs (1,496) (677)
Acquisition of other intangible assets (277) (107)
Acquisition of property, plant and equipment (3,835) (666)
Acquisition of right of use assets (177) (120)
Interest received 163 83
---------- ----------
Net cash used in investing activities (5,622) (1,487)
---------- ----------
Cash flows from financing activities
Interest paid (268) (332)
Proceeds from financing agreements 137 750
Exercise of employee share options 143 138
Repayment of principle element of lease liabilities (915) (784)
---------- ----------
Net cash used in financing activities (903) (228)
---------- ----------
Movement in cash and cash equivalents 7,318 4,612
Currency exchange movement (39) (7)
Opening cash and cash equivalents 7,215 2,610
---------- ----------
Closing cash and cash equivalents 14,494 7,215
====== ======
Notes to the Preliminary Financial Information
for the year ended 31 May 2025
1 Basis of Preparation
These preliminary results have been prepared on the basis of the accounting
policies which are to be set out in Filtronic plc's Annual Report and
financial statements for the year ended 31 May 2025.
Whilst the information included in this preliminary announcement has been
prepared on the basis of International Accounting Standards in conformity of
the requirements of the Companies Act 2006 as applicable to companies
reporting under those standards, this announcement does not itself contain
sufficient information to comply with IFRSs. The Company expects to publish
full financial statements within two months of this announcement.
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 May 2025 or 31 May 2024. The
financial information for 2024 is derived from the statutory accounts for 2024
which have been delivered to the registrar of companies. The auditor has
reported on the 2025 accounts; their report 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 statutory accounts for FY2025 were finalised on the basis of the financial
information presented by the directors in this preliminary announcement and
will be delivered to the registrar of companies in due course.
Going Concern
In accordance with corporate governance requirements and the statement of
directors' responsibilities, and as disclosed in the Directors' Report, 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.
At 31 May 2025, the Group had cash at bank of £14.5m and access to an undrawn
revolving credit facility of £5.0m.
The Board recognises the uncertain economic and political environment that the
world faces and has reviewed the business outlook to reflect this uncertainty.
Cash flow forecasts have been prepared to model various scenarios over a
three-year period based on the Group's financial and trading position,
principal risks and uncertainties and strategic plans.
A downside scenario was modelled, to stress-test the business, where programme
curtailment and/or delays may adversely affect forward-looking demand to
levels lower than those initially modelled in the base case scenario including
reduced demand from a major customer.
A severe but plausible scenario was also modelled that took the downside
scenario and removed a significant contract win that the Group expected to
convert from the outlook period.
The scenarios modelled including the severe but plausible model, demonstrate
the Group has adequate cash for the next twelve months from the date of the
approval accounts.
New Accounting Standards
There are a number of new standards, including, amendments to standards and
interpretations that are effective for financial statements after this
reporting period, but the Group has not adopted them early. None of these are
expected to have a material impact on the results or financial position of the
Group.
Notes to the Preliminary Financial Information
for the year ended 31 May 2025
2 Segmental analysis
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 Board who reviews internal monthly management reports, budget
and forecast information as part of this. Accordingly, the Board 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 one customer representing individually over 10% of revenue each
and in aggregate 83% of revenue. This is split as follows:
• Customer A - 83% (2024: 48%)
Revenue by destination Total
2025 2024
£000 £000
United Kingdom 3,946 2,239
Europe 1,205 2,154
Americas 51,163 17,121
Rest of the World 4 3,918
---------- ----------
56,318 25,432
====== ======
Split of non-current assets by location Total
Restated
2025 2024
£000 £000
United Kingdom 15,004 9,274
Americas 613 255
---------- ----------
15,617 9,529
====== ======
Non-current assets relate to property, plant and equipment, right of use
assets, goodwill and other intangible assets and deferred tax.
Notes to the Preliminary Financial Information
for the year ended 31 May 2025
3 Finance costs
Year Year
Ended Ended
31 May 31 May
2025 2024
£000 £000
Interest expense for lease agreements 268 236
Minimum service costs and interest charges on invoice discounting facilities
- 96
---------- ----------
268 332
====== ======
4 Finance income
Year Year
Ended Ended
31 May 31 May
2025 2024
£000 £000
Revaluation of foreign currency denominated intercompany balance
50 1
Interest receipt on treasury deposits 163 82
---------- ----------
213 83
====== ======
5 Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to
the equity holders of the Company by the weighted average number of ordinary
shares issued during the year.
Diluted earnings per share is calculated by adjusting basic earnings per share
for the potential dilution from share options and share warrants. For the
purposes of the diluted earnings per share calculation, it is assumed that all
performance conditions attached to the share option schemes have been met as
of the reporting date.
The weighted average number of shares in issue during the year and the
resulting earnings per share calculations are as follows:
2025 2024
£000 £000
Profit for the year 14,049 3,141
====== ======
'000 '000
Basic weighted average number of shares 218,854 216,340
Dilution effect of share options and share warrants 13,389 6,555
---------- ----------
Diluted weighted average number of shares 232,243 222,895
---------- ----------
Basic earnings per share 6.42p 1.45p
Diluted earnings per share 6.05p 1.41p
====== ======
The SpaceX Warrants increase the number of diluted shares reported, which has
an effect on our fully diluted earnings per share. If SpaceX exercises its
right to acquire shares pursuant to the SpaceX warrant strategic partnership
agreement, it will dilute the ownership interests of existing shareholders and
reduce earnings per share.
Notes to the Preliminary Financial Information
for the year ended 31 May 2025
6 Taxation
The reconciliation of the effective tax rate is as follows:
2025 2024
£000 £000
Profit before taxation 13,387 3,361
====== ======
2025 2024
£000 £000
Profit before taxation multiplied by the average standard rate of corporation 3,347 840
tax in the UK - 25% (2024: 25%)
Disallowable items 838 209
Deferred tax asset not recognised - 237
Enhanced R&D tax credit (360) (589)
Foreign tax not at UK rate 13 27
Group relief from previously unrecognised deferred tax assets (144) -
Recognition of deferred tax asset (707) (504)
Recognition of previously unrecognised deferred tax assets (3,649) -
---------- ----------
Taxation (credit)/charge (662) 220
====== ======
The main rate of UK corporation tax was 25% for companies with profit above
£250,000. The US federal corporate rate is 21%.
The deferred tax assets recognised in the year have been calculated at the
rates expected to be in existence in the period of reversal.
7 Contract Assets
Contract assets relate to the share warrants issued to Space X. Full details
of the share warrants can be found in note 10.
Restated
Year Year
Ended Ended
31 May 31 May
2025 2024
£000 £000
Opening contract assets 2,605 -
New contract assets generated 3,504 2,605
Amortised to revenue (1,303) -
---------- ----------
4,806 2,605
====== ======
Notes to the Preliminary Financial Information
for the year ended 31 May 2025
8 Share
Capital
Deferred shares of 10p each Ordinary shares of 0.1p each issued and fully paid
Number '000 Number '000 £000
At 31 May 2023 106,877 215,121 10,796
Exercise of share options - 2,000 2
------------- ------------ -----------
At 31 May 2024 106,877 217,121 10,798
Exercise of share options - 1,881 2
------------- ------------ -----------
At 31 May 2025 106,877 219,002 10,800
======== ======== =======
All shares are allotted, called up and fully paid. 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.
The deferred shares have no rights to vote or receive dividends.
9 Share Premium
£000
At 31 May 2023 11,077
Exercise of share options 136
-----------
At 31 May 2024 11,213
Exercise of share options 141
-----------
At 31 May 2025 11,354
=======
10 Share Warrant Reserve
Tranche 1 and 2
On 24 April 2024, the Group entered into a share warrant arrangement with
SpaceX in conjunction with a
commercial agreement and strategic partnership. This related to the supply of
E-band Solid State Power Amplifiers ("SSPAs") and new technology being
developed for SpaceX for use in their Starlink constellation.
The warrant agreement grants SpaceX the right to acquire up to 21,712,109
shares of the Company (equivalent to 10% of the Company's total share capital
at the inception of the warrant agreement). The exercise price of vested
warrants is 33.0p per share, based on the closing mid-market price at 23 April
2024, which is the date prior to signing the warrant agreement. The directors
have assessed the warrants and made a judgement that the warrants should be
treated as equity instruments as defined by IAS 32. This is because the
warrants have a fixed consideration at 33.0p per share for a fixed number of
units to exercise.
Notes to the Preliminary Financial Information
for the year ended 31 May 2025
10 Share Warrant Reserve (continued)
The warrants have been recognised in the financial statements based on the
value at the date of signing of
the agreement. An initial entry has been made in contract assets measured at
fair value, but not subsequently remeasured, with the corresponding entry to
equity.
The initial fair value of the warrants at inception was £2,605,453, based on
a fair value per warrant of £0.11 and the total number of warrants expected
to vest over the 5-year vesting period. The directors have judged all of the
warrants will vest, otherwise SpaceX and Filtronic would not have entered into
the agreement. The warrants represent non-cash consideration payable to a
customer under IFRS 15. Therefore, the contract asset, which effectively
represents a deferred volume rebate, is amortised to revenue based on when the
units are supplied to SpaceX. In the year, this represented a charge to
revenue of £1,303,000.
The fair value of the warrants was determined using the Black-Scholes Model
valuation method using a number of variables that require judgement including
share price volatility, discount to the bid price, the risk-free rate and the
expected life of the warrants. There are a number of variables that require
judgement within this model including the risk-free rate, share price
volatility, the vesting period and a bid price
discount.
Tranche 3
On 19 March 2025, the Company entered into a second warrant arrangement with
SpaceX expanding the
Original strategic partnership entered into on 23 April 2024 to secure an
increased allocation of business for the Group. The vesting of these warrants
is dependent on certain performance conditions relating to the procurement of
E-band SSPAs to support the Starlink constellation.
The warrant agreement grants SpaceX the right to acquire up to 10,949,079 at
92.8p per share. The accounting treatment of the warrants has been judged by
management and has been determined to be treated the same as tranche 1 and 2.
An initial entry has been made in contract assets measured at fair value, but
not subsequently remeasured, with the corresponding entry to equity.
Fair value of share warrants - Tranche 3
The initial fair value of the warrants at inception was £3,504,000, based on
a fair value per warrant of £0.93 and the total number of warrants expected
to vest over the 5-year vesting period. The directors have judged all of the
warrants will vest, otherwise SpaceX and Filtronic would not have entered into
the agreement. The warrants represent non-cash consideration payable to a
customer under IFRS 15. Therefore, the contract asset, which effectively
represents a deferred volume rebate, is amortised to revenue based on when the
units are supplied to SpaceX. There was no charge to revenue for tranche 3 in
the year.
The fair value of the warrants was determined using the Black-Scholes Model
valuation method using a number of variables that require judgement including
share price volatility, discount to the bid price, the risk-free rate and the
expected life of the warrants. There are a number of variables that require
judgement within this model including the risk-free rate, share price
volatility, the vesting period and a bid price discount.
11 Dividends
The directors are not proposing to pay a dividend for the year ended 31 May
2025 (2024: £nil).
Notes to the Preliminary Financial Information
for the year ended 31 May 2025
12 Analysis of net cash
31 May Cash Flow Other movements 31 May 2025
2024
£000 £000 £000 £000
Cash and cash equivalents 7,215 7,318 (39) 14,494
Lease liabilities - plant and equipment (1,990) 650 (840) (2,180)
--------- --------- --------- ---------
Net cash when including all debt except property leases 5,225 7,968 (879) 12,314
Lease liabilities - property leases (1,027) 268 (746) (1,505)
--------- --------- --------- ---------
Net cash 4,198 8,236 (1,625) 10,809
====== ====== ====== ======
Reconciliation of cash flow to movement in net cash
2025 2024
£000 £000
Movement in cash and cash equivalents 7,318 4,612
Movement in lease liabilities - plant and machinery (190) (971)
Movement in lease liabilities - property lease (478) 269
Effect of exchange rate fluctuations (39) (7)
---------- ----------
Movement in net cash 6,611 3,903
Net opening cash 4,198 295
---------- ----------
Net closing cash 10,809 4,198
====== ======
Cash at bank earns interest at floating rates based on daily bank deposit
rates. There are no restrictions on the availability of the cash and cash
equivalents at 31 May 2025 (2024: £nil).
IFRS 16 requires the recognition of property leases on the balance sheet which
is classified as a debt item.
Notes to the Preliminary Financial Information
for the year ended 31 May 2025
13 Restatement of financial statements
Restatements have been made to some of the financial statements for the period
ended 31 May 2024. This impacted the Consolidated Statement of Financial
Position and Statement of Changes In Equity but there have been no amendments
to the income statement or cash flow statement.
The share warrants have been restated in line with the IAS 32 accounting
standard which requires the fair value of share warrants to be accounted for
as a contract asset with a corresponding entry to equity or financial
liability. The director's judged this to be accounted for as equity. IAS 32
requires for this to be accounted at the time the warrant agreement was
signed. Consequently, the contract asset in FY2024 increased by £2.6m, prior
to amortisation, and equity in the share warrant reserve increased by £2.6m.
31 May 31 May
2024 2024
(Audited) Correction (Audited)
£000 £000 £000
Non-current assets
Contract assets - 1,302 1,302
---------- ---------- ----------
8,227 1,302 9,529
---------- ---------- ----------
Current assets
Contract assets - 1,303 1,303
---------- ---------- ----------
17,038 1,303 18,341
---------- ---------- ----------
---------- ---------- ----------
Total assets 25,265 2,605 27,870
---------- ---------- ----------
---------- ---------- ----------
Net assets 14,815 2,605 17,420
====== ====== ======
Equity
Share warrant reserve - 2,605 2,605
---------- ---------- ----------
Total equity 14,815 2,605 17,420
====== ====== ======
Owing to the nature of the adjustment, an original and restated statement of
financial position has not been shown.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR MZGZNRRFGKZMRecent news on Filtronic
See all newsREG - AIM - AIM Notice - 29/07/2025
AnnouncementREG - Filtronic PLC - Final Results
AnnouncementREG - Filtronic PLC - Exercise of Options and Total Voting Rights
AnnouncementREG - Filtronic PLC - Holding(s) in Company
AnnouncementREG - Filtronic PLC - New £13.4m contract award for Defence prime
Announcement