Filtronic PLC (LSE:FTC), the microelectronic services company, saw shares jump 16% to 30p in early trading after it said both revenues and profits for the full year would be ahead of market consensus and announced new contract wins.
Jonathan Neale, the chairman of the company, said the lift in guidance followed success in the recent “execution of our strategic plan and targeted growth initiatives”.
“Our confidence stems from the recently announced contract wins with customers in LEO [low earth orbit] space, aerospace and defence markets which were particularly pleasing given both the quantity and value, as well as the significance and quality of the new customers added to our customer portfolio,” Neale added.
Despite a challenging economic environment, the company achieved a slight uptick in half-year revenue, marking £8.5 million in the six months ended 30 November 2023, compared to £8.4 million in the same period last year.
However, the first half also witnessed a downturn in profitability, with the company’s underlying profits slipping to £0.2 million from £1 million.
Two key contract wins during the period included the £3.4 million deal with the market leader in the LEO satellite communications equipment market, which is set to use Filtronic's proprietary Cerus32 solid state power amplifier (SSPA) module.
In a separate statement on Tuesday, Filtronic announced the signing of a follow-on £7.8 million contract, its third and largest in the LEO market, for the Cerus32 SSPA.
Richard Gibbs, chief executive officer, said: "We are very pleased to continue our partnership with the leading global provider of LEO satellite broadband services, and proud of the way we have scaled our operations to supply production volumes of the Cerus32 SSPA module for their ground station network."
During the first half, Filtronic also signed a £3.2 million contract with the European Space Agency to provide it with a “next-generation space payload communication systems.”
“As success is delivered, we will continue to invest for growth whilst managing the rest of the cost base, where possible, to drive stronger profits and margins," Neale concluded.