Market Cap£24m

Last Close 11.25p

Filtronic is a designer and manufacturer of advanced radio frequency communications products supplying a number of market sectors including mobile telecommunications infrastructure, public safety, defence and aerospace.

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Investment summary

Group sales rose by 10% y-o-y during FY22 to £17.1m. The recovery noted in the US public safety market during Q421 as COVID-19-related restrictions started to ease was sustained throughout the year, but supply chain issues prevented Filtronic from fulfilling demand for 5G transceivers during H122. While this was resolved in Q222, the US public safety customer was itself affected by supply chain issues in H222. A higher proportion of sales to the critical communications and defence markets benefited gross margin, resulting in adjusted EBITDA climbing by 58% y-o-y to £2.8m.

Y/E May
Revenue (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2021A 15.6 1.8 0.1 0.14 80.4 9.6
2022A 17.1 2.8 1.5 0.53 21.2 10.5
2023E 19.0 2.1 0.9 0.42 26.8 13.4
2024E N/A N/A N/A N/A N/A N/A
Industry outlook

We leave our FY23 estimates, which are underpinned by a growing orderbook for 5G XHaul transceivers, unchanged. Since gross margins are likely to be lower year-on-year in FY23 because of the higher proportion of Xhaul transceivers, which are price-sensitive, and overheads are likely to be higher because of continued investment in engineering personnel, we model a year-on-year drop in EBITDA (but a substantial increase compared with FY21) even though revenue growth is modelled at 11.5%. Management intends that this investment will result in stronger revenue and profit growth during FY24 and FY25 as the group diversifies into adjacent markets.

Last updated on 28/09/2022
Content on Filtronic
Filtronic – Third consecutive year of EBITDA growth
TMT | research Update | 2 August 2022
Filtronic – Recovery continues throughout H222
TMT | research Update | 20 June 2022
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Share price graph
Balance sheet
Forecast net cash (£m) 3.8
Forecast gearing ratio (%) N/A
Price performance
Actual (14.3) 2.3 5.9
Relative* (8.5) 8.0 11.9
52-week high/low 16.8p/9.0p
*% relative to local index
Key management
Jonathan Neale Chairman
Richard Gibbs CEO
Michael Tyerman CFO