TIDMFTC
RNS Number : 6310N
Filtronic PLC
02 February 2021
2 February 2021
FILTRONIC PLC
("Filtronic", the "Company" or the "Group")
HALF YEAR RESULTS FOR THE SIX MONTHSED 30 NOVEMBER 2020
Filtronic plc (AIM: FTC), the designer and manufacturer of
products for the wireless telecoms and critical communications
markets, announces its half year results for the six months ended
30 November 2020 ("H1 2021").
Financial Highlights
H1 2021 H1 2020
Revenue GBP7.1m GBP7.5m
Adjusted EBITDA (1) GBP0.6m GBP0.6m
Adjusted operating profit (2) GBP0.1m GBP0.3m
Exceptional items - GBP0.8m
Operating profit/(loss) GBP0.1m (GBP0.5m)
Loss for the period from discontinued operations - (GBP1.1m)
Loss for the period (GBP0.1m) (GBP1.8m)
Basic and diluted loss per share (0.03p) (0.86p)
Cash received from/(used in) operating activities GBP0.5m (GBP2.8m)
At 30 Nov At 31
2020 May 2020
Net debt when including right of use property (GBP0.6m) (GBP0.7m)
leases
Net cash when excluding right of use property GBP0.4m GBP0.4m
leases
(1) Adjusted EBITDA is earnings before interest, taxation,
depreciation, amortisation and exceptional items.
(2) Adjusted operating profit is operating profit before
exceptional items.
Operational Highlights
-- Appointment of Richard Gibbs as Chief Executive Officer with
sector experience and a strong track record of business growth and
development. Recently appointed John Behrendt, a finance
specialist, with a considerable background in developing businesses
as Non-Executive Director.
-- Award of follow-on order for a two-year defence contract to a
tier 1 European defence equipment supplier to manufacture their
advanced radar transmit-receive modules valued at GBP4.9m.
-- Adoption of the next generation E-band transceiver, Morpheus,
by our lead telecoms Original Equipment Manufacturer ("OEM")
customer to supply into 5G XHaul applications with the production
ramp successfully completed. Development of the next generation
platform has commenced with funding provided by the customer.
-- Initial sales recognised of our "best-in-class" new Tower Top
Amplifier following product launch to the public safety market.
Post-period Highlight
-- A contract award from a new major UK defence customer for the
development and supply of battlefield radio communications hardware
valued at over GBP1 million.
Commenting on the outlook, Reg Gott, Chairman, said: "Whilst the
impact of Covid-19 on the outlook remains uncertain, the
fundamentals of the Group remain intact with year-on-year growth of
EBITDA anticipated for FY2021 despite the disruption we are seeing
in the wider economy. The broadening of the customer base is the
key strategic objective of the Group but with travel restrictions
constraining commercial engagement this has proved more challenging
to achieve. Despite this, the Group has actively progressed its
strategy to develop the channels to market across multiple
territories and is currently in the early stages of executing the
marketing plan to raise the profile of the Company and build the
brand in existing and adjacent markets. The recent contract win
with a new defence OEM customer underlines the technical strength
within our engineering function and our ability to rapidly deliver
first class technical proposals, a competitive advantage that
positions us well to win other opportunities in this market. Over
the coming year we will further invest in our teams tasked with
top-line growth and new technology development as we execute on our
strategic plans to build the business and leverage our recent
investments in operational capital and product development."
Enquiries
Filtronic plc www.filtronic.com
Reg Gott, Chairman 0113 220 0000 or investor.relations@filtronic.com
Richard Gibbs, CEO
Michael Tyerman, CFO
finnCap Ltd 020 7220 0500
Jonny Franklin-Adams/Tim Harper (Corporate Finance)
Alice Lane/Sunila de Silva (ECM)
Walbrook PR Limited 020 7933 8780 or filtronic@walbrookpr.com
Paul Vann/Nick Rome/Nicholas Johnson 07768 807631
Notes:
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
Forward-looking statements
Certain statements in this half-yearly financial report are
forward-looking. Where the half-yearly financial report includes
forward-looking statements, these are made by the directors in good
faith based on the information available to them at the time of
their approval of this report. Such statements are based on current
expectations and are subject to a number of risks and
uncertainties, including both economic and business risk factors
that could cause actual events or results to differ materially from
any expected future events or results referred to in these
forward-looking statements. Unless otherwise required by applicable
law, regulation or accounting standard, the Group undertakes no
obligation to update any forward-looking statements whether as a
result of new information, future events or otherwise.
Chairman's Statement
I am pleased to report, in this very disruptive trading
environment, that the Group continues to operate resiliently, and
despite the previously announced programme reschedules at the start
of the period, we have successfully delivered a profitable EBITDA
and H1 FY2021 performance comparable with H1 FY2020.
Group performance for the first half of FY2021 was broadly flat
compared with the prior year, but in line with management
expectations, with sales revenue of GBP7.1m (H1 2020: GBP7.5m). As
previously announced, revenue was impacted by a slowdown in sales
to the public safety market and a slower than anticipated switch by
our lead telecoms OEM customer from the Orpheus generation of our
5G E-band XHaul transceiver to the next generation Morpheus
platform. These were partially offset by stronger sales in the
defence and aerospace market, which resulted in an operating profit
of GBP0.1m (H1 2020: GBP0.3m) and adjusted EBITDA of GBP0.6m (H1
2020: GBP0.6m). The Group had net cash at 30 November 2020 of
GBP0.4m when excluding right of use property leases (31 May 2020:
GBP0.4m) and net debt including right of use property leases of
GBP0.6m (31 May 2020: net debt of GBP0.7m).
We have remained fully operational throughout the Covid crisis,
meeting all customer product and engineering programme delivery
obligations, resulting in all orders being fulfilled. Our largest
operating site at Sedgefield was independently audited in October
by Make UK and declared Covid-Safe, validating the excellent work
undertaken by our Covid Business Continuity Team to keep the
business running within a safe operating environment for employees.
On behalf of the Board, I would like to thank all our employees for
their commitment and hard work throughout these challenging
times.
The pandemic has significantly constrained our new business
acquisition activities and to counter this, we have been developing
other ways to engage with new customers. As advised of our
intention in the FY2020 Annual Report, we have strengthened the
sales channels in North America with the appointment of GT Partners
in line with our plans to establish a Manufacturing Representative
Network across the USA. We are in the process of appointing further
representatives to our network to increase our coverage of the
North American and European markets and gain access to new clients.
To raise the profile of the Company, promote the Filtronic brand
and supplement our direct sales channels, we have established a
dedicated marketing function under the management of a recently
recruited experienced specialist Marketing Manager.
Demand from critical communication customers was slower than
planned during the six months to November 2020, which we believe
was a direct result of public funds being diverted to Covid support
measures. However, we were pleased to see order flow from our lead
customer start to recover in December. Our new "best-in-class"
Tower Top Amplifier, launched in May 2020, has also now started to
gain traction in the market with initial sales recognised in
November as anticipated. The geo-political landscape turned
positive during H1 with the McCain Bill being enacted in the US,
which prevents access to the market by a large number of named
Chinese companies. Based upon recent statements from President
Biden, we do not believe he is likely to reverse the "Made in
America" sentiments or stance on China of the previous US
administration. Having on-shored manufacture of these products to
our US facility in Maryland last year, specifically to reduce lead
times and minimise geo-political risk, we are now actively looking
to capitalise on this market landscape development.
Increasing XHaul capacity is a prerequisite for deploying 5G
networks. Industry forecasts indicate demand for E-band spectrum
technology will steadily increase to support 5G network growth.
This requires high speed and high capacity backhaul infrastructure,
positioning Filtronic to benefit from this market as network
rollout accelerates. Sales of our 5G XHaul transceivers into our
lead telecommunications customer peaked at the back end of FY2020,
in line with our customer's desire to build inventory and fulfil a
large initial customer contract. Demand has, consequently, levelled
off and this has freed some resources to develop solutions for
adjacent 5G markets, including "track to train" and High-Altitude
Pseudo Satellites ("HAPS") applications. In addition to these, we
were successful in winning a GBP0.4m development contract for a
low-latency private network application in December 2020.
The GBP4.9m follow-on defence and aerospace order for radar
transmit-receive modules ("TRM's") announced at the start of the
year, further underpins our long-term revenue stream from this
sector, and ensures a continued high-level of utilisation for our
state-of-the-art hybrid microelectronics manufacturing operations
in Sedgefield.
The recently announced contract win for battlefield
communication products brings us both a new defence OEM prime
customer, with whom there is significant potential for further
order opportunities, and a new application field for deploying our
technologies. This serves to support two key development objectives
of growing our customer base and broadening our product portfolio.
Defence spending is on the rise around the world, especially in
fields relating to radar and communications technologies. Filtronic
capabilities and know-how in these fields have also recently
resulted in several small development contract wins from new
clients in this market. Whilst initially small, these projects have
the potential to lead to more substantial projects further down the
line and provide us with access to a wider customer base.
Board changes
I reverted to my role as Non-Executive Chairman in October 2020
following a handover to Richard Gibbs who was appointed to the
Board on 1 September 2020 as Chief Executive Officer. Richard has
made a strong start and is focusing his energies on strategic
growth and development. The Board and I are delighted with
Richard's appointment and speed with which he has settled into his
stride. I am equally pleased that the Board was further enhanced
with the appointment of John Behrendt who was formally appointed on
1 January 2021 as a Non-Executive Director. John is a finance
specialist, with a considerable background in developing businesses
within the Private Equity environment and will bring substantial
experience to the Board.
Brexit
The recently agreed EU-UK Trade and Cooperation Agreement will
not significantly change trading relationships with our customers
and suppliers within the EU. We secured the necessary export
licences and additional inventory of critical supplies in advance
of the Brexit deadline to mitigate against potential short to
medium term disruption to our operation.
Outlook
When the impact of Covid eventually subsides, we expect critical
communications and telecoms markets to benefit from an increased
level of investment and an acceleration in the rollout of 5G
networks. In the longer term, the Group is well placed to explore
opportunities beyond E-band as new W-band and D-band licences are
released. Filtronic has developed unique solutions for the HAPS
market and we now require decisions regarding operating frequency
bands to create momentum in this market segment. We are
particularly encouraged by recent UK Government commitments to an
increased level of defence spending; the decision to develop a UK
based LEO satellite capability; and the intent to establish a
robust sovereign telecoms technology supply chain.
A strengthening orderbook, improving customer forecasts and
recent contract wins position us well for growth and profitability
in H2 FY2021.
Reg Gott
Chairman, 1 February 2021
Condensed Consolidated Interim Income Statement
For the period ended 30 November 2020
6 months 6 months Year
Ended Ended Ended
30 November 30 November 31 May
2020 2019 2020
(Unaudited) (Unaudited) (Audited)
Continuing operations Note GBP000 GBP000 GBP000
Revenue 4 7,148 7,533 17,181
====== ====== ======
Adjusted EBITDA (1) 614 608 1,165
Depreciation (438) (310) (677)
Amortisation of other intangible
assets (38) (12) (18)
Impairment of development costs (45) - (89)
---------- ---------- ----------
Adjusted operating profit (2) 93 286 381
Exceptional items - (825) (569)
---------- ---------- ----------
Operating profit/(loss) 93 (539) (188)
Finance costs (236) (132) (277)
Finance income - - 36
---------- ---------- ----------
Loss before taxation (143) (671) (429)
Taxation 85 (94) (89)
---------- ---------- ----------
Loss from continuing operations (58) (765) (518)
Loss from discontinued operations - (1,068) (1,437)
---------- ---------- ----------
Loss for the period (58) (1,833) (1,955)
====== ====== ======
Basic and diluted loss per share (pence)
Basic and diluted loss per share 6 (0.03p) (0.86p) (0.93p)
====== ====== ======
1 Adjusted EBITDA is defined as profit before interest,
taxation, depreciation, amortisation and exceptional items which is
a non-GAAP metric used by management and is not an IFRS
disclosure.
2 Adjusted operating profit is defined as operating profit
before exceptional items which is a non-GAAP metric used by
management and is not an IFRS disclosure.
Condensed Consolidated Interim Statement of Comprehensive
Income
For the period ended 30 November 2020
6 months 6 months Year
Ended Ended Ended
30 November 30 November 31 May
2020 2019 2020
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
Loss for the period (58) (1,833) (1,955)
---------- ---------- ----------
Items that are or may be subsequently
reclassified to profit and loss
Transfer of income related to business
disposal - - 117
Currency translation arising on consolidation (41) (55) (111)
---------- ---------- ----------
Other comprehensive (expense)/income (41) (55) 6
---------- ---------- ----------
---------- ---------- ----------
Total comprehensive expense for the
period (99) (1,888) (1,949)
====== ====== ======
The total comprehensive expense for the period is attributable
to the equity shareholders of the parent company Filtronic plc.
Condensed Consolidated Interim Balance Sheet
At 30 November 2020
Note 30 November 30 November 31 May
2020 2019 2020
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
Non-current assets
Goodwill and other intangibles 1,839 1,676 1,847
Right of use assets 7 2,394 2,493 2,685
Property, plant and equipment 1,028 904 1,124
Deferred tax 1,803 1,914 1,868
---------- ---------- ----------
7,064 6,987 7,524
---------- ---------- ----------
Current assets
Inventories 3,348 3,936 2,945
Trade and other receivables 4,203 4,770 4,848
Cash and cash equivalents 1,621 121 2,028
Assets held for sale - 3,832 -
---------- ---------- ----------
9,172 12,659 9,821
---------- ---------- ----------
---------- ---------- ----------
Total assets 16,236 19,646 17,345
---------- ---------- ----------
Current liabilities
Trade and other payables 3,209 3,969 3,463
Provisions 8 932 1,849 1,110
Deferred Income 566 73 568
Financial liabilities 50 1,126 177
Liabilities directly associated - 707 -
with assets held for sale
Lease liability 849 588 662
---------- ---------- ----------
5,606 8,312 5,980
---------- ---------- ----------
Long term liabilities
Financial liabilities - - 144
Lease liability 1,363 1,981 1,867
---------- ---------- ----------
1,363 1,981 2,011
---------- ---------- ----------
---------- ---------- ----------
Total liabilities 6,969 10,293 7,991
---------- ---------- ----------
---------- ---------- ----------
Net assets 9,267 9,353 9,354
====== ====== ======
Equity
Share capital 9 10,795 10,791 10,794
Share premium 10 11,011 10,941 11,000
Translation reserve (593) (613) (552)
Retained earnings (11,946) (11,766) (11,888)
---------- ---------- ----------
Total equity 9,267 9,353 9,354
====== ====== ======
The total equity is attributable to the equity shareholders of
the parent company Filtronic plc.
Company number 2891064
Condensed Consolidated Interim Statement of Changes in
Equity
For the period ended 30 November 2020
Share capital Share premium Translation Retained Total equity
reserve earnings
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 30 November 2019 10,791 10,941 (613) (11,766) 9,353
Loss for the period - - - (122) (122)
New shares issued (net of
issue costs) 3 59 - - 62
Currency translation movement
arising on consolidation - - 61 - 61
---------- ---------- ---------- ---------- ----------
Balance at 31 May 2020 10,794 11,000 (552) (11,888) 9,354
Loss for the period - - - (58) (58)
New shares issued (net of
issue costs) 1 11 - - 12
Currency translation movement
arising on consolidation - - (41) - (41)
---------- ---------- ---------- ---------- ----------
Balance at 30 November 2020 10,795 11,011 (593) (11,946) 9,267
====== ====== ====== ====== ======
Condensed Consolidated Interim Cash Flow Statement
For the period ended 30 November 2020
6 months 6 months Year
Ended Ended Ended
30 November 30 November 31 May
2020 2019 2020
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
Cash flows from operating activities
Loss for the period from continuing
operations (58) (765) (518)
Loss for the period from discontinued
operations - (1,068) (1,437)
Gain on sale of the Telecoms Antenna
Operation - - (671)
Taxation (85) 103 100
Finance income - - (36)
Finance costs 236 135 280
---------- ---------- ----------
Operating profit/(loss) 93 (1,595) (2,282)
Tax received/(paid) 108 (71) 1,227
Depreciation 438 310 677
Amortisation of intangible assets 38 12 18
Impairment of development costs 45 - 89
Movement in inventories (403) (1,703) (731)
Movement in trade and other receivables 645 409 85
Movement in trade and other payables (276) 278 (1,054)
Movement in provisions (178) (416) (1,155)
Change in deferred income (2) (8) 488
---------- ---------- ----------
Net cash generated from/(used in)
operating activities 508 (2,784) (2,638)
---------- ---------- ----------
Cash flows from investing activities
Acquisition of plant and equipment (49) (1,231) (384)
Acquisition of intangible assets (21) (21) (27)
Acquisition of right of use assets (12) - (154)
Capitalised development costs (52) (385) (678)
Proceeds on sale of assets 4 1 -
Proceeds on sale of the Telecoms
Antenna Operation - net of sale costs - - 3,652
---------- ---------- ----------
Net cash (used in)/generated from
investing activities (130) (1,636) 2,409
---------- ---------- ----------
Cash flows from financing activities
Interest paid (117) (111) (258)
Proceeds from bank loans and finance
agreements - 2,047 192
Repayment of bank loans and finance
agreements (272) (117) (202)
Repayment of lease liabilities (331) (125) (375)
Proceeds from new shares (net of
issue costs) 11 229 290
---------- ---------- ----------
Net cash (used in)/generated from
financing activities (709) 1,923 (353)
---------- ---------- ----------
Movement in cash and cash equivalents (331) (2,497) (582)
Currency exchange movements (76) (7) (15)
Opening cash and cash equivalents 2,028 2,625 2,625
---------- ---------- ----------
Closing cash and cash equivalents 1,621 121 2,028
====== ====== ======
Notes to the Condensed Financial Statements
1 Company information
Filtronic plc is a company registered and domiciled in the
United Kingdom and is listed on the AIM market of the London Stock
Exchange. The Company's registered number is 2891064. The address
of the Company's registered office is Filtronic plc, Filtronic
House, Unit 3, Airport West, Lancaster Way, Yeadon, West Yorkshire,
LS19 7ZA.
Copies of the Company's annual report and interim financial
report are available from the Company's registered office or the
Company's website at www.filtronic.com.
2 Basis of preparation
Whilst the financial information included in this preliminary
statement has been prepared on the basis of the requirements of
IFRSs in issue, as adopted by the European Union and effective at
30 November 2020, this statement does not itself contain sufficient
information to comply with IFRS.
These financial results do not comprise statutory accounts
within the meaning of Section 434 of the Companies Act 2006. The
interim report should be read in conjunction with the annual report
2020, which includes annual financial statements for the year ended
31 May 2020. Those accounts have been reported on by the Company's
auditor and delivered to the registrar of companies. The report of
the auditor was (i) unqualified (ii) did not include a reference to
any matters to which the auditor drew attention by way of emphasis
without qualifying their report, and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act
2006.
The condensed consolidated financial statements for the six
months ended 30 November 2020 consolidate the financial statements
of the Company and all of its subsidiaries (together referred to as
the "Group"). Transactions between Group companies, which are
related parties, have been eliminated upon consolidation and
therefore do not require disclosure.
The condensed consolidated financial statements for the six
months ended 30 November 2020 and comparative period have not been
audited. The interim financial report for the six months ended 30
November 2020 was approved by the Board on 1 February 2021.
3 Going Concern
The business continuity plans implemented during the Covid-19
pandemic have limited the adverse impact to date with the Group
trading resiliently through the crisis. However, the Board
recognises the uncertain macroeconomic environment that the world
now faces and has reviewed the business outlook to reflect this
uncertainty. Cash flow forecasts have been prepared to model
various scenarios over a three-year period based on the Group's
financial and trading position, principal risks and uncertainties
and strategic plans. A downside scenario was modelled where the
pandemic may adversely affect forward-looking demand to levels
significantly lower than those initially modelled in the base case
scenario.
The downside scenario modelled demonstrates the Group has
adequate cash and borrowing capacity, details of which are included
in note 11, for the next twelve months and therefore the directors
continue to adopt the going concern basis to prepare the
accounts.
The directors have reviewed the projected cash flow and other
relevant information and have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future. For this reason, the directors continue
to adopt the going concern basis in preparing the interim financial
report.
4 Accounting estimates and judgements
The preparation of the financial statements requires the use of
accounting estimates and judgements that affect the application of
accounting policies and reported amounts of assets and liabilities,
income and expenses. The accounting estimates and judgements are
continually evaluated and are based on historical experience and
other factors, including expectations of the future that are
believed to be reasonable under the circumstances. Actual results
may differ from the expected results. Revisions to accounting
estimates are recognised in the period in which the estimate is
revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both
current and future periods. The accounting estimates and judgements
that have a significant effect on the financial statements are
considered in the Filtronic plc Annual Report for the year ended 31
May 2020 which can be found on the Filtronic website. Unless stated
below there is no material change to those judgements from the
Annual Report in the basis of calculation.
5 Segmental Analysis
Operating Segments
IFRS 8 requires consideration of the identity of the Chief
Operating Decision Maker ('CODM') within the Group. In line with
the Group's internal reporting framework and management structure,
the key strategic and operating decisions are made by the Chief
Executive Officer, who reviews internal monthly management reports,
budget and forecast information as part of this. Accordingly, the
Chief Executive Officer is deemed to be the CODM.
The CODM has identified one operating segment within the Group
as defined under IFRS 8. In turn, this is the only reportable
segment of the Group as the entities in the Group have similar
products and services, production processes and economic
characteristics. Therefore, there is no allocation of operating
expenses, profit measures or assets and liabilities to specific
commercial markets.
Accordingly, the CODM assesses the performance of the operating
segment on financial information which is measured and presented in
a manner consistent with those in the financial statements by
reference to Group results against budget.
The Group profit measures are adjusted operating profit and
adjusted EBITDA, both disclosed on the face of the consolidated
income statement. No differences exist between the basis of
preparation of the performance measures used by management and the
figures in the Group financial statements.
The Group has three customers representing individually over 10%
each and in aggregate 93% of revenue.
Revenue by Destination
The revenue presented is based on the geographic location of
customers receiving the product/service from the continuing
operations.
6 months 6 months Year
Ended Ended Ended
30 November 30 November 31 May
2020 2019 2020
GBP000 GBP000 GBP000
Revenue
United Kingdom 1,687 2,119 4,764
Europe 2,642 2,659 7,985
Americas 1,494 2,472 3,945
Rest of the world 1,325 283 487
---------- ---------- ----------
7,148 7,533 17,181
====== ====== ======
Revenue from sales
The revenue presented is based on the Group deriving revenue
from product sales and those received from Non-Recurring
Engineering ("NRE") at a point in time when the performance
obligation is satisfied.
6 months 6 months Year
Ended Ended Ended
30 November 30 November 31 May
2020 2019 2020
GBP000 GBP000 GBP000
Revenue
Sales of product 6,710 7,426 16,954
NRE - point in time 438 107 227
---------- ---------- ----------
7,148 7,533 17,181
====== ====== ======
6 Basic and diluted loss per share
6 months 6 months Year
Ended Ended Ended
30 November 30 November 31 May
2020 2019 2020
GBP000 GBP000 GBP000
Continuing operations (58) (765) (518)
Discontinued operations - (1,068) (1,437)
---------- ---------- ----------
Loss for the period (58) (1,833) (1,955)
====== ====== ======
'000 '000 '000
Basic weighted average number of
shares 213,898 211,482 211,021
----------- ----------- ----------
Diluted weighted average number of
shares 213,898 211,482 211,021
======= ====== ======
Basic and diluted loss per share (pence)
Continuing operations
Basic and diluted loss per share (0.03p) (0.36p) (0.25p)
====== ====== ======
Discontinued operations
Basic and diluted loss per share - (0.50p) (0.68p)
====== ====== ======
Total Group
Basic and diluted loss per share (0.03p) (0.86p) (0.93p)
====== ====== ======
7 Right of Use Assets
Property Plant and Total
leases equipment
GBP000 GBP000 GBP000
Cost
At 31 May 2020 1,333 1,727 3,060
Additions - 147 147
Disposals - (208) (208)
Exchange differences (21) (3) (24)
---------- ---------- ----------
At 30 November 2020 1,312 1,663 2,975
====== ====== ======
Depreciation
At 31 May 2020 226 149 375
Provided in the year 111 194 305
Disposals - (91) (91)
Exchange differences (8) - (8)
---------- ---------- ----------
At 30 November 2020 329 252 581
====== ====== ======
Carrying amount at 31 May 2020 1,107 1,578 2,685
Carrying amount at 30 November
2020 983 1,411 2,394
====== ====== ======
The Group's lease commitments are made up of property leases and
plant and equipment under asset finance agreements.
The Group leases office premises at its sites in Sedgefield and
Yeadon in the UK, Salisbury, Maryland in the USA and a virtual
office space in Suzhou, China. Leases remaining are between one and
eight years.
8 Provisions
6 months 6 months Year
Ended Ended Ended
30 November 30 November 31 May
2020 2019 2020
GBP000 GBP000 GBP000
Warranty provision
Opening balance 1,053 2,205 2,205
Used during the year (146) (386) (1,188)
Released during the year (9) - (274)
Charge for the year 9 14 301
Currency translation movement (31) (39) 9
---------- ---------- ----------
876 1,794 1,053
====== ====== ======
6 months 6 months Year
Ended Ended Ended
30 November 30 November 31 May
2020 2019 2020
GBP000 GBP000 GBP000
Dilapidation provision
Opening balance 57 60 60
Reclassification to assets held
for sale - (5) (5)
Exchange differences (1) - 2
---------- ---------- ----------
56 55 57
====== ====== ======
6 months 6 months Year
Ended Ended Ended
30 November 30 November 31 May
2020 2019 2020
GBP000 GBP000 GBP000
Total provision
Warranty provision 876 1,794 1,053
Dilapidation provision 56 55 57
---------- ---------- ----------
932 1,849 1,110
====== ====== ======
The provision for warranty relates to the units sold during the
last two financial years and the remaining liability of the
warranty settlement agreement for GBP0.4m (H1 2020: GBP1.6m). The
provision is based on estimates made from historical warranty
data.
The final GBP0.4m of the warranty settlement agreement was paid
in December 2020.
9 Share Capital
Ordinary shares of 0.1p each
issued and fully paid
Number '000 GBP000
At 30 November 2019 211,482 10,791
Exercise of employee share options 2,216 3
-------------- ---------
At 31 May 2020 213,698 10,794
Exercise of employee share options 200 1
------------ ------------
At 30 November 2020 213,898 10,795
======== ======
Holders of the ordinary shares are entitled to receive dividends
when declared and are entitled to one vote per share at meetings of
the Company.
10 Share Premium
GBP000
At 30 November 2019 10,941
Exercise of employee share
options 59
-----------
At 31 May 2020 11,000
Exercise of employee share
options 11
-----------
At 30 November 2020 11,011
=======
11 Analysis of net (debt)/cash
1 June Cash Flow Other movements 30 Nov
2020 2020
GBP000 GBP000 GBP000 GBP000
---------- ---------- ---------------- ----------
Cash and cash equivalents 2,028 (331) (76) 1,621
---------- ---------- ---------------- ----------
Bank loans (209) 209 - -
---------- ---------- ---------------- ----------
Lease liability - plant
and equipment (1,381) 212 (15) (1,184)
---------- ---------- ---------------- ----------
Lease liability - property
lease (1,148) 119 1 (1,028)
---------- ---------- ---------------- ----------
--------- --------- --------- ---------
---------- ---------- ---------------- ----------
Net (debt)/cash (710) 209 (90) (591)
---------- ---------- ---------------- ----------
====== ====== ====== ======
---------- ---------- ---------------- ----------
Cash at bank earns interest at floating rates based on daily
bank deposit rates.
At 30 November 2020, the Company had a GBP3.0m invoice
discounting facility in place with Barclays Bank plc against the UK
debtor book and a $4.0m factoring facility with Wells Fargo against
the US debtor book. There were no drawings on either of the
facilities at 30 November 2020 (31 May 2020: undrawn).
The Company also has an overdraft facility with Barclays Bank
plc of GBP0.5m that was put in place during the period. There were
no drawings at 30 November 2020.
IFRS16 requires the recognition of property leases on the
balance sheet which is classified as a debt item.
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