Filtronic aiming to grow.
OVER 50 jobs have been shed at the County Durham production arm of Bradford-based Plc Filtonic, but the company says it is now well-placed to take advantage of the recovery in the global economy when it comes.
Recent years at Filtronic have been eventful as the company disposed of four of its loss-making operations generating substantial cash from the sales.
With its rationalisation now complete the company is sitting on cash reserves of pounds 15.8m and expects to make a profit of pounds 1.8m this year.
And Filtronic says it expects 2009 to be tough but says it is well-placed to take advantage of the recovery in the global economy when it comes.
Its half-year results published yesterday showed operating profit had remained at pounds 1.8m for the six months to the end of November 30, but overall profits came in at pounds 11.7m following the sale of its Glasgow defence division for pounds 13m. Turnover for the six-month period fell from pounds 20.1 to pounds 18.3m.
The Newton Aycliffe plant manufactures broadband transmission kit for mobile phone masts and it is now the company's main production facility, employing 140 of the company's total workforce of 180.
The remaining 40 are employed in Shipley, Bradford, where it has its head office, research and development and some manufacturing.
Chairman John Poulter said: "The business delivered strong sales during the first six months, with demand across all its customers being particularly driven through mobile roll-outs in developing regions.
"However, in the second half we expect weaker demand due to the slow down in telecoms infrastructure expenditure resulting from global economic conditions.
"Overhead and other cost reduction measures have already been taken which, on present indications of customer demand in the second half, would permit the group to trade around break even and on a broadly cash neutral basis. Expenditure on core technology and new product development is being maintained."
In the last six months the company paid a special dividend to shareholders amounting to a total of pounds 29.7m and in the previous period it handed back around pounds 80m.
This money had been generated from a number of sales including the disposal of its Newton Aycliffe microchip manufacturing facility to RF Micro Devices (RFMD).
This facility employs around 200 people and shares the same factory as Filtronic. The factory had been previously owned by Fujitsu.
A Filtronic spokesman added: "The company has lots of cash, profits are up and we are continuing to invest in new products to broaden our customer base.
"While we expect 2009 to be tough the underlying market drivers for our products remain strong with the ongoing mobile subscriber growth in developing regions and with future capacity upgrades in developed regions required to support substantial growth in mobile broadband."
"The business delivered strong sales during the first six months, with demand driven through mobile roll-outs in developing regions
Highlights for six months to Nov 30, 2008 Revenue 2008 pounds 18.3m. 2007 pounds 20.1m Operating profit 2008 pounds 1.8m 2007 pounds 1.8m Profit (with exceptionals) 2008 pounds 11.7m 2007 pounds 0.9m)