Delays smash Filtronic

Despite a string of profit warnings in 2014, telecoms equipment supplier Filtronic was confident that it could increase wireless sales revenue each month of the current financial year. It won't. All depended on a raft of new products, specifically its advanced integrated antenna, but final testing has thrown up technical problems that will push its development back even further and a potential customer has pulled out.

A day before it publishes full-year results, Filtronic revealed that production of the antenna has been pushed back by four months which has also delayed two programmes with a major equipment manufacturer until the next financial year ending May 2016. It's not surprising to hear that earnings from Filtronic's wireless business will come in "substantially" below expectations.

What's more, the company's broadband business continues to be hit by loss of orders from customers who sell mainly to Russia, an early adopter of E-band and V-band technology. It warned of problems back in September as sanctions against Russia in retaliation for backing Pro-Russian rebels in Ukraine began to bite. Although the company is confident that demand will pick up over the medium term, "it does not foresee a significant improvement in market conditions in the near-term."

Of course, today's news hardly comes as a surprise. Filtronic has issued warnings liberally over the years and its share price is down by about 70% since January 2014. The share price plummeted by as much as a third in response to the latest warning, trading as low as 16.125p.

The loss-making firm will release its half-year report tomorrow and broker Panmure Gordon has put its forecasts under review. The broker had estimated breakeven this year and an underlying pre-tax profit of £4.3 million in 2016. By late morning the share price had recovered some of its lost ground and was trading at 21p as some investors spied a bargain. But after a challenging year and no let-up in sight, many are holding back ahead of the numbers and new estimates.

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