Growing demand in the global aerospace and defence markets has helped to lift half-year revenues by 5% at telecoms tech firm Filtronic.
The NETPark firm, which also has bases in Leeds and Maryland in the US, has posted results for the six months ended November 30 2022, showing sales of £8.4m, up from £8m, although investments into sales channels and engineering led to lower operating profit of £500,000, down from £700,000.
The company makes products for markets including defence, telecoms infrastructure and critical comms markets, with chairman Jonathan Neale saying demand within the aerospace and low earth orbit (LEO) sectors has come faster than anticipated, boosting its order book. He said governments are seeing increasing needs to invest in electronic warfare and battlefield communication in the wake of the war in Ukraine.
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During the six months the firm secured orders with new and existing customers, and said it is investing in capital equipment, to support engineering and new production capability in the growing markets. But Mr Neale said the rest of the year will be dictated by the global semiconductor shortage.
He said: “Notwithstanding a strong order book and signs that our target markets remain robust, the outlook for the current financial year continues to be shaped by global supply chain challenges as announced on 31 January 2023. The semiconductor shortages originating during the pandemic are showing signs of recovery but supplies of specific components are still inconsistent and prone to schedule change.
“The impact of this global issue not only disrupts manufacturing at Filtronic, but it also impacts our customers’ ability to complete their own manufacturing cycle. The team at Filtronic are adept at component sourcing and fortunate that we can rely on our ability to make rapid design changes to accommodate alternative components and use our in house manufacturing resources to react quickly to changes in material availability.
“Whilst we deal with the frustration of the continuing component shortages, we have focused our efforts on driving forward our strategic operational targets, and therefore remain confident in our ability to deliver growth in FY2024 and beyond.”
Looking further ahead, Mr Neale said Filtronic’s strategic markets continue to benefit from strong growth drivers and significant inward investment.
He said: “The LEO space market is developing faster than originally estimated and we have multiple project opportunities that look promising for E-band technology.
“The importance of defence spending on EW (electronic warfare) and battlefield communications is more pronounced than ever, following the events in Ukraine, with governments acknowledging that spending needs to increase to protec its population and the deployment of 5G network infrastructure continues at pace with the insatiable demand for bandwidth driving people toward E-band frequencies.”
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