- Higher-than-expected orders
- SpaceX driving upgrade cycle
- Aerospace and defence market penetration excites analysts
Shares in Filtronic (FTC:AIM) rose 7% to an all-time high of 96.5p on 13 January after the communications equipment specialist upgraded guidance for the year to May 2025 once again amid ongoing positive order momentum.
In a brief update, the County Durham-based firm announced that order intake for delivery in the current financial year is at ‘a higher rate than anticipated’ and as a result, results are now expected to beat recently upgraded market expectations.
REACHING FOR THE STARS
Guided by CEO Nat Edington, Filtronic designs and makes advanced radio frequency communications products supplying sectors including mobile telecommunications infrastructure, space, public safety as well as aerospace and defence, where customers include BAE Systems (BA.) and QinetiQ (QQ.).
Filtronic has seen its shares surge by a staggering 330% over the past year as it continues to benefit from its relationship with SpaceX, believed to be generating a large proportion of the company’s orders as Elon Musk’s space exploration innovator expands its Starlink satellite network.
In April 2024, Filtronic announed a long-term partnership agreement with SpaceX to supply E-band Solid State Power Amplifiers (SSPAs) for the ground stations which enable the Starlink Low Earth Orbit satellite network.
Then on 30 August, Filtronic announced a further follow-on production order with SpaceX valued at £6.4 million for E-band solid-state power amplifier modules for the Starlink constellation of satellites.
WHAT ARE THE BROKERS SAYING?
Cavendish understands that the Starlink programme has been the main driver of the increase in Filtronic’s full-year 2025 revenue expectations and continues to expect ‘increased levels of revenue from the Starlink partnership in future years’.
Following the update, Cavendish upgraded its full-year 2025 sales forecast by 11.5% to £48.4 million and its EBITDA (earnings before interest, taxation, depreciation and amortisation) estimate by 22.3% to £13.7 million.
The broker also upped its year-end net cash forecast from £9.9 million to £10.4 million. This reflects the higher EBITDA forecast, partially offset by higher capital expenditure in support of Filtronic’s new facility at its base in Sedgefield and its investment in a new design facility art Cambridge Science Park.
Edison analyst Katherine Thompson upgraded her year-to-May 2025 sales forecast by 11.8% to £48.1 million and now sees pre-tax profits surging from £3.4 million to £11.5 million as a result.
‘In our view,’ said Thompson, ‘the relationship with SpaceX, the potential to widen the customer base in the space market and growing penetration of the aerospace and defence market all provide avenues for sustainable growth. The company reports first half 2025 results on 4 February, when we expect an update on progress with pipeline conversion.’
