Filtronic PLC
14 April 2004
Filtronic plc
New Major OEM Customer frame agreement
Impact of exchange rates on reported results
Professor J David Rhodes, CBE FRS FREng, Executive Chairman of Filtronic plc
('Filtronic'), issues the following statement concerning developments in its
customer base and the impact of exchange rates on current trading results.
'I am pleased to announce that Filtronic has signed a significant new frame
agreement with a new major Original Equipment Manufacturer ('OEM') customer for
the design, manufacture and supply of Radio Frequency transmit/receive modules
for cellular basestations. Initial production volumes will be for GSM 1900 MHz
applications and in a full year are scheduled to increase the total units
currently supplied by Filtronic's Wireless Infrastructure division by more than
20%. Initial supplies will be made in the last quarter of 2004 calendar year
following the normal qualification processes.
As stated in my interim results statement on 2 February 2004, we have been
aggressively pursuing business opportunities of this type with new customers.
In order to be able to satisfy our customers' demands for production capacity,
we have not only maintained levels of our design and manufacturing capacity in
our Wireless Infrastructure facilities in the UK, USA, Finland and Australia but
we have been rapidly increasing our now substantial manufacturing capacity in
China. In doing this, there have been additional costs in this business which
in the short term have had the effect of reducing margins.
Filtronic's results for the year ending 31 May 2004 will include the financial
performance of our overseas operations for the whole year translated into
sterling at the rate of exchange ruling at that date. Based on today's
exchange rates the translation is likely to impact operating profit for the full
year by £2.6m, of which £0.7m is due to retranslation of the first half results.
An additional effect of the strength of sterling is to place our competition,
which is principally US based corporations, potentially at a competitive
advantage on price. However, we are maintaining our market share.
Our work on the new power amplifier products for cellular basestations continues
to progress favourably with the first production units scheduled to be supplied
in the autumn. The Board believes that this strategy of addressing new markets
and aggressively pursuing new customers in our traditional markets will provide
long-term growth and sustained profitability.'
Professor J D Rhodes, CBE FRS FREng
Executive Chairman
Tel: 07850 827 280
Binns & Co PR Ltd
Peter Binns / Paul McManus
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