Last close As at 05/08/2026
GBP2.42
▲ 9.00 (3.86%)
Market capitalisation
GBP533m
Research: TMT
Filtronic’s £4.5m contract with a UK defence supplier is its largest for more than five years and indicative of its improving momentum in the traditional defence market, on top of the exciting progress in the space sector. As the bulk of revenues from the deal will be spread across FY25 and FY26, we are not changing our estimates but believe they look increasingly well underpinned. The company’s rating is now starting to factor in an acceleration in growth and margin expansion. With continuing strong execution, we believe that it is more than capable of delivering this – demand for high-end radio frequency (RF) is growing and Filtronic has rare capabilities in the field, while incremental revenue growth should drop strongly through to margins.
Filtronic |
Further momentum with £4.5m defence contract |
Contract win |
Tech hardware and equipment |
19 December 2023 |
Share price performance
Business description
Analysts
Filtronic is a research client of Edison Investment Research Limited |
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Filtronic’s £4.5m contract with a UK defence supplier is its largest for more than five years and indicative of its improving momentum in the traditional defence market, on top of the exciting progress in the space sector. As the bulk of revenues from the deal will be spread across FY25 and FY26, we are not changing our estimates but believe they look increasingly well underpinned. The company’s rating is now starting to factor in an acceleration in growth and margin expansion. With continuing strong execution, we believe that it is more than capable of delivering this – demand for high-end radio frequency (RF) is growing and Filtronic has rare capabilities in the field, while incremental revenue growth should drop strongly through to margins.
Year end |
Revenue (£m) |
EBITDA* (£m) |
PBT* |
Diluted |
DPS |
P/E |
05/22 |
17.1 |
2.8 |
1.5 |
0.53 |
0 |
37.5 |
05/23 |
16.3 |
1.3 |
0.1 |
0.06 |
0 |
308.8 |
05/24e |
20.7 |
2.2 |
0.7 |
0.32 |
0 |
62.5 |
05/25e |
22.7 |
2.7 |
1.2 |
0.56 |
0 |
36.0 |
Note: *EBITDA, PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
The deal announced today is with a major UK prime defence contractor and is for the development and manufacture of advanced RF modules for packaging semiconductors, optimised for both thermal and RF performance. Management has highlighted that Filtronic sees exciting opportunities in aerospace and defence, as western countries reinvest in their capabilities. The company is well placed to benefit from this dynamic as high-end skills are in short supply and governments have become more focused on sourcing from sovereign or allied suppliers. This contract marks a significant milestone in this regard.
The contract is the result of a collaboration over a number of years with the MoD, the customer and PRFI, a leading UK-based technical design consultancy. Engagement will start with a product qualification phase in January 2024, with delivery of final production scheduled over 12 months starting in 2024. As a result, the bulk of revenues will be recognised over Filtronic’s FY25 and FY26.
At its AGM on 26 October, Filtronic confirmed that it is confident of delivering FY24 results in line with market expectations. Medium-term prospects look increasingly positive, with this contract adding to the company’s recent wins in the space market. In the longer term, Filtronic’s technology development to support E-band frequencies for space applications and W-band frequencies for terrestrial backhaul solutions provide further growth opportunities.
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Research: TMT
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