Filtronic PLC Settlement Agreement and Notice of Results (2943Q)

TIDMFTC

RNS Number : 2943Q

Filtronic PLC

17 October 2019

17 October 2019

Filtronic plc

(the "Company" or "Filtronic")

Settlement of Warranty Claim and Notice of Results

Filtronic plc (AIM: FTC), the designer and manufacturer of antennas, filters and mmWave products for the critical communications and wireless telecoms markets, confirms that it has entered into a settlement agreement in respect of a warranty claim ("Settlement Agreement").

As announced on 3 July 2019, the Company was notified of a performance issue affecting certain Filtronic antenna products shipped in FY2016/17 that were still under warranty. The performance issue was diagnosed as a component fault that arose on specific antennas when placed in certain operating and environmental conditions. Filtronic has come to a settlement agreement with the customer to pay US$2.0 million (GBP1.6 million) in compensation and to upgrade affected antennas and its customer's stock of antenna units. All unit upgrades have now been completed. In order to ensure minimal disruption to Filtronic, the cash settlement will be made in four instalments between the date of signing the agreement and 31 December 2020. The component issue relates only to antennas sold in the FY2016/17 period, and the performance issue is restricted to certain geographic locations. Other than the claim settled in this agreement there are no other warranty claims.

Given that the Company has come to an agreement on the quantum of the settlement for the warranty claim, the Company can confirm that it expects to release results for the financial year ended 31 May 2019 on 23 October 2019.

As previously announced, Filtronic has entered into a process to sell its loss-making Telecoms Antenna Operations and accordingly we will report these activities as discontinued operations and assets held for sale. The results are expected to show sales from continuing operations of GBP15.9m (FY2018: GBP21.6m) and EBITDA of GBP0.7m (FY2018: GBP3.6m).

Order-intake since the year-end has been encouraging with demand for our class-leading, 5G Backhaul transceivers being particularly strong. We have received orders from clients for these transceivers totalling in excess of GBP10m and expect to ship the vast majority of these orders in FY2020. Longer-term demand for this product range also appears to be good and we have been increasing capacity at our Sedgefield, UK facility to meet demand. Further details on current trading will be provided with our results announcement.

Rob Smith, Filtronic's CEO commented, "The Board is pleased with the outcome of the Settlement Agreement reached with our longstanding customer. We greatly appreciate the constructive approach taken by our customer to mitigate the cost of the warranty claim and for the helpful payment plan that reduces the cash impact on the business as we ramp output of our 5G Backhaul Transceivers. The customer remains a loyal client of the Company and has been continuing to place material orders with Filtronic whilst the warranty discussions have been ongoing".

Enquiries:

 
 Filtronic plc                        Tel. [phone] or [e-mail] 
 Rob Smith (CEO) 
 Michael Tyerman (Finance Director) 
 
 finnCap Ltd                          Tel. [phone] 
 Jonny Franklin-Adams / Hannah Boros (Corporate Finance) 
 Alice Lane / Sunila de Silva (ECM) 
 
 Walbrook PR Limited                  Tel. [phone] or [e-mail] 
 Nick Rome                            Mob. [phone] 
 Paul Vann                            Mob. [phone] 
 

Notes:

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

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October 17, 2019 11:37 ET (15:37 GMT)