SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of January 2003
Filtronic PLC
(Translation of registrant's name into English)
The Waterfront, Salts Mill Road, Saltaire, Shipley, BD18 3TT, UK
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F..X.. Form 40-F.....
Indicate by check mark whether the registrant by furnishing the information
contained in this form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ..... No ..X..
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- ________
27 January 2003
FILTRONIC PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2002
Results ahead of Market expectations
Continued cash generation and debt reduction; Increased market share in
both major businesses
Filtronic plc ("Filtronic"), a leading global designer and manufacturer of
customised microwave electronic subsystems, announces its interim results for
the six months ended 30 November 2002. Its technology and engineering can be
applied to several business sectors in both the commercial and defence areas.
Worldwide sites are in the UK (North of England, Yorkshire, Midlands, Scotland),
the US, Finland, China and Australia.
Both major businesses, Wireless Infrastructure and Cellular Handset Products,
produced the majority of sales and all of the operating profits, in a period of
uncertainty and decline in the wireless telecommunications market.
Wireless Infrastructure increased both its margins and market share, as the
world's leading supplier of transmit/receive modules for mobile communications
base stations to several of the world's leading OEM's. Cellular Handset Products
increased sales, margins and market share as one of the world's leading
manufacturers of antennas for handsets.
In his Statement, Professor J. David Rhodes CBE, FRS, FREng, Executive Chairman
said: "Filtronic has increased its market share in its two main businesses
whilst maintaining strong levels of profitability in those businesses. After
continuing to invest in the development of compound semiconductor technology at
the Newton Aycliffe facility, Filtronic has generated cash and reduced its level
of indebtedness by GBP34m in the last year."
Financial Highlights
* Group sales of GBP123.9m (2001: GBP146.0m).
* Operating profit before non-cash items of GBP5.4m (2001: GBP6.1m).
* Pre-tax profit of GBP50k (2001: Loss of GBP4.5m)
* Loss per share of 1.99p (2001: 8.05p loss) on undiluted basis.
* Wireless Infrastructure operating profit of GBP13.4m (2001: GBP14.0m).
* Cellular Handset Products operating profit up 15.1% to GBP6.1m
(2001: GBP5.3m).
* Maintained dividend of 0.90p (2001: 0.90p), payable 1 April 2003.
* Cash generation of GBP4.9m.
* Net gearing reduced from 83% to 73%.
Operational Highlights
* Wireless Infrastructure: Increased market share, well positioned with major
customers.
* Volumes of transmit/receive modules during 2002 up on previous year.
* Volumes of masthead amplifier units to OEM's more than doubled.
* Reduced value of sales but margins increased, profitability maintained.
* Cellular Handset Products: 29% increase in volume of antennas sold from 82m to
106 million (26% world market share).
* Increased sales levels and profits and improved margins in handset products,
driven by recent introduction of new models.
* Electronic Warfare: disappointing sales and margins; GBP40m order
backlog; second half profitability.
* Compound Semiconductors: Closure of Santa Clara facility, US, October 2002;
exceptional provision of GBP2.7m.
Development of compound semiconductor technologies
* New GaAs chip sets create worldwide opportunities for E-Scan Radar.
* Unique GaAs Power Process for high efficiency power amplifiers for mobile base
stations.
Outlook
In his statement, Professor David Rhodes said: "During the second half of this
financial year, the Board expects that our two main businesses, Wireless
Infrastructure and Cellular Handset Products, will continue to produce a strong
financial performance and also expects improvement from both the Electronic
Warfare and Compound Semiconductors business segments.
After continuing to invest in the development of compound semiconductor
technology at Newton Aycliffe, Filtronic has generated cash and reduced its
level of indebtedness by GBP34m in the last year. The Board expects that the
company will continue to generate cash in the second half of this financial year
and that net indebtedness will further reduce. The development of compound
semiconductor related high value integrated products will continue to dominate
the strategy for growth."
Enquiries:
Professor J. David Rhodes, Executive Chairman, Filtronic plc Tel:020 7786 9600
John Samuel, Finance Director, Filtronic plc Tel:020 7786 9600
Christopher Schofield, Company Secretary, Filtronic plc Tel:01274 530 622
Peter Binns, Paul McManus, Charlotte Barker, Binns & Co
PR Ltd Tel: 020 7786 9600
Executive Chairman's Statement
Interim financial results
Sales for the six months ended 30 November 2002 were GBP123.9m (2001 GBP146.0m)
and operating profit before exceptional closure costs, goodwill amortisation and
share compensation costs was GBP5.4m (2001 GBP6.1m).
After charging exceptional closure costs of GBP2.7m, goodwill amortisation of
GBP1.1m and share compensation costs of GBP0.2m, operating profit was GBP1.4m
(2001 GBP2.4m). Financing costs totalled GBP1.4m (2001 GBP6.9m), comprising net
interest payable of GBP4.4m, a net currency exchange gain of GBP2.0m and an
exceptional gain on the repayment of debt of GBP1.0m.
The profit before taxation was GBP50k (2001 GBP4.5m loss). After taxation
charges of GBP1.5m relating to our Finnish operations, the loss was GBP1.5m
(2001 GBP5.9m loss). The loss per share is 1.99p (2001 8.05p loss) and these
figures are unchanged on a diluted basis.
Dividend
The Board is maintaining an interim dividend of 0.90p (2001 0.90p) per share
payable on 1 April 2003 to shareholders on the register at 28 February 2003.
Finance
Cash generation in the six months ended 30 November 2002 was GBP4.9m. Together
with cash brought forward at 1 June 2002, this enabled the company to buy in
$21.5m of 10% Senior Notes due 1 December 2005 during the period.
At 30 November 2002, long term debt totalled GBP74.9m (2001 GBP117m),
representing GBP76.6m ($119.2m) of 10% Senior Notes due 1 December 2005, net of
GBP1.7m of deferred debt issue costs.
At 30 November 2002, Filtronic had a cash balance of GBP3.0m and was using
GBP2.4m of its GBP31m bank overdraft facility. Net gearing was 73% (2001 83%).
Operations
The segmental analysis of the business is as follows:
Operating profit before closure costs goodwill
amortisation and
Six months ended 30 November Sales impairment, tangible fixed asset impairment and
share compensation
2002 2001 2002 2001
GBP000 GBP000 GBP000 GBP000
Wireless infrastructure 81.5 99.5 13.4 14.0
Cellular handset products 24.3 23.6 6.1 5.3
Electronic warfare 11.0 13.7 (1.8) (2.0)
Broadband access 5.9 8.0 (1.4) (1.0)
Inter segment (0.7) (2.7) - -
Central costs - - (2.5) (2.4)
--------------- --------------- --------------- ---------------
Excluding Compound 122.0 142.2 13.8 13.9
semiconductors
Compound semiconductors 1.9 3.8 (8.4) (7.8)
--------------- --------------- --------------- ---------------
123.9 146.0 5.4 6.1
======== ======== ======== ========
Our major business continues to be the supply of transmit/receive modules for
mobile communications base stations where we supply several of the world's
leading Original Equipment Manufacturers ("OEM's") and where we are acknowledged
as the world's leading independent supplier of such equipment. Throughout 2002
global demand for 2G and 2.5G equipment has been unpredictable and it is
estimated that the global market fell by around 20% when compared to 2001.
Filtronic has maintained business volumes in these difficult trading conditions
by increasing market share and programme position with our major customers.
Filtronic supplied approximately 375,000 transmit/receive modules in calendar
year 2002, slightly more than the number shipped in 2001. Following the strategy
of supplying only OEM's with masthead amplifiers, unit sales of these products
increased to 25,000 in 2002 from 10,000 in 2001 with a strong increase towards
the end of the calendar year. Although the value of Wireless Infrastructure
sales has reduced compared to the same period last year, profitability has been
maintained and margins improved by a continuing focus on cost effective designs
and overhead reductions.
In the Cellular Handset Products business, sales have increased and margins
improved. During calendar year 2002, Filtronic supplied 106m handset antennas
compared to 82m in 2001, an increase of 29%. This increase has been driven by
the introduction of many new models in the second half of the year.
Approximately 400m handsets were sold in 2002 giving Filtronic more than a 26%
share of the world market for handset antennas.
Sales and margins in the Electronic Warfare business have been disappointing.
Losses have been incurred, principally because it has taken until the end of the
first half of the current financial year for the European Fighter Aircraft
programme to progress to volume production. UK export restrictions have also
prevented the shipment of products to certain customers.
The Broadband Access business has continued to suffer from low levels of demand
for millimetre wave transceivers and has incurred further losses as a result.
GBP1.5m of the sales and GBP2.5m of the operating losses for the Compound
Semiconductor business segment arose from our facility at Santa Clara,
California. This fabrication facility was closed in October 2002 and a provision
of GBP2.7m for closure costs has been charged as an exceptional item in these
results. Newton Aycliffe recorded GBP0.4m of sales and GBP5.9m of losses.
Development of compound semiconductor technologies
The company now has the ability to design and produce complex integrated
circuits using three different processes in the facility at Newton Aycliffe.
These are the 'Switch Process', 'D-Mode Process' and a unique gallium arsenide
("GaAs") 'Power Process'. The first process is related to the agreement with
M/A-COM, Inc., the second to the BAE SYSTEMS Avionics Limited agreement and
internal commercial applications, and the third to the internal development of
power amplifiers for base stations.
Trading outlook
Since the end of November demand in the Wireless Infrastructure business has
continued at a similar level to that achieved in the first half although
industry expectations are that the global market will decline slightly in 2003.
Growth in this business remains dependent on both continuing demand for 2G and
2.5G systems and the timing and extent of 3G deployments. Prospects for growth
in all 3G systems with our existing products remain strong.
In the Cellular Handset Products business, Filtronic is involved in an extensive
number of new opportunities for both existing and new customers including
innovative handset components incorporating new antenna structures. We remain
confident of continuing to increase our market share in an increasing market.
The Electronic Warfare business has a forward order book of over GBP40m.
Shipments of products on the European Fighter Aircraft programme are expected to
increase substantially in the second half of this financial year and as a result
the Electronic Warfare business should be profitable in the second half of the
current financial year.
The activities of the Broadband Access group have been expanded to cover the
substantial opportunities for E-Scan Radars using new GaAs chip sets developed
at Newton Aycliffe. These devices are already functioning successfully in the
key transmit / receive modules for phased array radars. A new programme is being
instigated to bring a complete surveillance radar to the market within two years
where its aggressive pricing will create worldwide opportunities. Technical
progress continues to be made with respect to the point to point transceiver
business but improved financial performance is not expected until the next
financial year.
The company's most important development programme is in the area of high
efficiency power amplifiers for mobile base stations. Engineering resources have
been deployed in both the UK and USA, in addition to those at Newton Aycliffe in
developing the unique GaAs 'Power Process'. Current units now produce more than
120 watts of power. By using Filtronic's proprietary efficiency enhancing
circuits, more than 70% peak efficiency at all 3G frequencies has been achieved.
These modules form the basis of both more conventional feed forward
linearisation and new digitally predistorted power amplifiers. The company is
currently working with several OEM's with the objective of incorporating the new
technology, regarded by them as a fundamental change which displaces existing
technology. This new technology meets the key requirements of the service
providers to reduce both capital expenditure and operational costs. These costs
are currently dominated by high levels of energy consumption and unreliable
power amplifiers.
It has recently become clear that the level of foundry sales deriving from the
M/A-COM agreement will be lower than either Filtronic or M/A-COM anticipated.
Therefore it is probable that the general exclusive rights granted to M/A-COM as
part of the agreement will lapse in November 2003 and negotiations are underway
to maximise the opportunity for switch products. Sales of merchant compound
semiconductors arising from the fabless operation at Santa Clara are expected to
improve slightly in the second half of the financial year. These products will
be manufactured at Newton Aycliffe. Together with the impact of the cost
reductions at Santa Clara, this should reduce losses in the Compound
Semiconductor business in the second half of the current financial year.
Auditors
Following a review by the Audit Committee, KPMG Audit Plc have been appointed as
auditors. The Board would like to thank Ernst & Young LLP for their services
during the last eight years.
Summary
During a period of uncertainty and decline in the wireless telecommunications
market, Filtronic has increased its market share in its two main businesses,
whilst maintaining strong levels of profitability in those businesses. During
the second half of this financial year, the Board expects that these businesses
will continue to produce a strong financial performance and also expects
improvement from both the Electronic Warfare and Compound Semiconductors
business segments.
After continuing to invest in the development of compound semiconductor
technology at Newton Aycliffe, Filtronic has generated cash and reduced its
level of indebtedness by GBP34m in the last year. The Board expects that the
company will continue to generate cash in the second half of this financial year
and that net indebtedness will further reduce. The development of compound
semiconductor related high value integrated products will continue to dominate
the strategy for growth.
Professor J D Rhodes CBE FRS FREng
Executive Chairman
27 January 2003
Consolidated Profit and Loss Account
Unaudited 6 months Ended 30 November 2002
Excluding Compound Compound
Semiconductors Semiconductors
note GBP000 GBP000 GBP000
Sales 1, 2 121,957 1,912 123,869
-------------- -------------- --------------
Operating profit/(loss) before 1, 2 13,810 (8,362) 5,448
closure
costs, goodwill amortisation and
impairment, tangible fixed asset
impairment and share compensation
Exceptional closure costs 4 - (2,719) (2,719)
Goodwill amortisation (1,063) - (1,063)
Exceptional goodwill impairment - - -
Exceptional tangible fixed asset - - -
impairment
Share compensation (218) - (218)
-------------- -------------- --------------
Operating profit/(loss) 1, 2 12,529 (11,081) 1,448
-------------- -------------- --------------
Net interest payable (4,451)
Net financing currency exchange 2,027
gain/(loss)
Exceptional gain on repayment of 1,026
debt
--------------
(1,398)
--------------
Profit/(loss) on ordinary 50
activities
before taxation
Taxation (1,525)
--------------
Loss on ordinary activities (1,475)
after
taxation
Dividends (669)
--------------
Deficit for the period (2,144)
--------------
Adjusted (loss)/earnings per
share
Basic 3 (0.71)p
Diluted 3 (0.71)p
Loss per share
Basic 3 (1.99)p
Diluted 3 (1.99)p
Dividend per share 0.90p
Consolidated Profit and Loss Account
Unaudited 6 months Ended 30 November 2001
Excluding Compound
Compound Semiconductors
Semiconductors
note GBP000 GBP000 GBP000
Sales 1, 2 142,196 3,792 145,988
-------------- -------------- --------------
Operating profit/(loss) before closure 1, 2 13,922 (7,850) 6,072
costs, goodwill amortisation and
impairment, tangible fixed asset
impairment and share compensation
Exceptional closure costs - - -
Goodwill amortisation (1,930) (740) (2,670)
Exceptional goodwill impairment - - -
Exceptional tangible fixed asset - - -
impairment
Share compensation (1,033) - (1,033)
-------------- -------------- --------------
Operating profit/(loss) 1, 2 10,959 (8,590) 2,369
-------------- -------------- --------------
Net interest payable (6,656)
Net financing currency exchange (236)
gain/(loss)
Exceptional gain on repayment of debt -
--------------
(6,892)
--------------
Profit/(loss) on ordinary activities (4,523)
before taxation
Taxation (1,414)
--------------
Loss on ordinary activities after (5,937)
taxation
Dividends (666)
--------------
Deficit for the period (6,603)
--------------
Adjusted (loss)/earnings per share
Basic 3 (2.71)p
Diluted 3 (2.71)p
Loss per share
Basic 3 (8.05)p
Diluted 3 (8.05)p
Dividend per share 0.90p
Consolidated Profit and Loss Account
Audited Year Ended 31 May 2002
Excluding Compound
Compound Semiconductors
Semiconductors
note GBP000 GBP000 GBP000
Sales 1, 2 273,066 7,481 280,547
-------------- -------------- --------------
Operating profit/(loss) before closure 1, 2 34,029 (16,196) 17,833
costs, goodwill amortisation and
impairment, tangible fixed asset
impairment and share compensation
Exceptional closure costs - - -
Goodwill amortisation (3,880) (1,472) (5,352)
Exceptional goodwill impairment (5,658) (10,378) (16,036)
Exceptional tangible fixed asset - (7,938) (7,938)
impairment
Share compensation (1,570) - (1,570)
-------------- -------------- --------------
Operating profit/(loss) 1, 2 22,921 (35,984) (13,063)
-------------- -------------- --------------
Net interest payable (12,638)
Net financing currency exchange 165
gain/(loss)
Exceptional gain on repayment of debt -
--------------
(12,473)
--------------
Profit/(loss) on ordinary activities (25,536)
before taxation
Taxation (3,508)
--------------
Loss on ordinary activities after (29,044)
taxation
Dividends (1,999)
--------------
Deficit for the period (31,043)
--------------
Adjusted (loss)/earnings per share
Basic 3 2.28p
Diluted 3 2.25p
Loss per share
Basic 3 (39.31)p
Diluted 3 (39.31)p
Dividend per share 2.70p
Consolidated Balance Sheet
Unaudited Unaudited Audited
30 November 30 November 31 May
2002 2001 2002
GBP000 GBP000 GBP000
Fixed assets
Intangible assets 33,459 53,021 34,720
Tangible assets 101,493 121,716 108,589
-------------- -------------- --------------
134,952 174,737 143,309
-------------- -------------- --------------
Current assets
Stocks 36,443 42,789 43,735
Debtors 58,257 69,082 55,435
Cash 3,026 11,176 9,083
-------------- -------------- --------------
97,726 123,047 108,253
-------------- -------------- --------------
Creditors: amounts falling due within one year
Borrowings 2,429 139 -
Other creditors 40,670 41,652 39,774
-------------- -------------- --------------
43,099 41,791 39,774
-------------- -------------- --------------
Net current assets 54,627 81,256 68,479
-------------- -------------- --------------
Total assets less current liabilities 189,579 255,993 211,788
Creditors: amounts falling due after one year
Borrowings 74,874 116,994 93,769
Provision for deferred tax 409 - 408
Deferred income 12,337 11,480 12,415
-------------- -------------- --------------
Net assets 101,959 127,519 105,196
-------------- -------------- --------------
Capital and reserves
Called up share capital 7,430 7,388 7,409
Share premium account 135,851 133,478 134,151
Shares to be issued 4,392 6,145 6,682
Revaluation reserve 106 106 106
Profit and loss account (45,820) (19,598) (43,152)
-------------- -------------- --------------
Equity shareholders' funds 101,959 127,519 105,196
-------------- -------------- --------------
Statement of Total Recognised Gains and Losses
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
30 November 30 November 31 May
2002 2001 2002
GBP000 GBP000 GBP000
Loss on ordinary activities after taxation (1,475) (5,937) (29,044)
Currency exchange movement arising on consolidation (4,283) 2,224 1,422
Currency exchange movement on loan 2,972 347 2,496
-------------- -------------- --------------
Total recognised gains and losses (2,786) (3,366) (25,126)
-------------- -------------- --------------
Reconciliation of Shareholders' Funds
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
30 November 30 November 31 May
2002 2001 2002
GBP000 GBP000 GBP000
Loss on ordinary activities after taxation (1,475) (5,937) (29,044)
Dividends (669) (666) (1,999)
-------------- -------------- --------------
Deficit for the period (2,144) (6,603) (31,043)
Contribution to QUEST - - (461)
Currency exchange movement arising on consolidation (4,283) 2,224 1,422
Currency exchange movement on loan 2,972 347 2,496
Issue of shares 2,508 2,535 3,229
Shares to be issued
- shares issued (2,508) (2,504) (2,504)
- share compensation 218 1,033 1,570
-------------- -------------- --------------
Movement in shareholders' funds (3,237) (2,968) (25,291)
Opening shareholders' funds 105,196 130,487 130,487
-------------- -------------- --------------
Closing shareholders' funds 101,959 127,519 105,196
-------------- -------------- --------------
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
30 November 30 November 31 May
2002 2001 2002
note GBP000 GBP000 GBP000
Net cash flow from operating activities A 16,413 33,744 64,218
-------------- -------------- --------------
Returns on investment and servicing of finance
Net interest paid (4,133) (6,235) (11,271)
-------------- -------------- --------------
Tax paid (2,598) (961) (2,345)
-------------- -------------- --------------
Capital expenditure
Purchase of tangible fixed assets (4,382) (5,550) (11,369)
Sale of tangible fixed assets 851 486 1,312
Government grants received 37 - 1,034
-------------- -------------- --------------
Net cash flow from capital expenditure (3,494) (5,064) (9,023)
-------------- -------------- --------------
Equity dividends paid (1,333) (1,326) (1,992)
-------------- -------------- --------------
-------------- -------------- --------------
Net cash flow before financing 4,855 20,158 39,587
-------------- -------------- --------------
Financing
Issue of shares - 31 264
Loans repaid (12,473) (132) (21,982)
-------------- -------------- --------------
Net cash flow from financing (12,473) (101) (21,718)
-------------- -------------- --------------
(Decrease)/increase in cash B (7,618) 20,057 17,869
-------------- -------------- --------------
Notes to the Consolidated Cash Flow Statement
A Reconciliation of operating profit/(loss) to net cash flow from operating activities
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
30 November 30 November 31 May
2002 2001 2002
GBP000 GBP000 GBP000
Operating profit/(loss) 1,448 2,369 (13,063)
Goodwill amortisation 1,063 2,670 5,352
Exceptional goodwill impairment - - 16,036
Share compensation 218 1,033 1,570
Depreciation 9,088 10,493 20,433
Exceptional tangible fixed asset impairment - - 7,938
(Profit)/loss on sale of tangible fixed assets (246) 167 191
Deferred licence fee income received - - 10,000
Government grants released (115) (35) (134)
Movement in stocks 6,309 8,734 7,445
Movement in debtors (4,038) 8,203 12,115
Movement in creditors 2,686 110 (3,665)
-------------- -------------- --------------
Net cash flow from operating activities 16,413 33,744 64,218
-------------- -------------- --------------
B Reconciliation of net cash flow to movement in net debt
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
30 November 30 November 31 May
2002 2001 2002
GBP000 GBP000 GBP000
(Decrease)/increase in cash (7,618) 20,057 17,869
Cash flow from debt 12,473 132 21,982
-------------- -------------- --------------
Change in net debt resulting from cash flows 4,855 20,189 39,851
Non-cash movement 708 (421) (1,367)
Currency exchange movement 4,846 199 2,754
-------------- -------------- --------------
Movement in net debt in the period 10,409 19,967 41,238
Opening net debt (84,686) (125,924) (125,924)
-------------- -------------- --------------
Closing net debt (74,277) (105,957) (84,686)
-------------- -------------- --------------
Notes to the Interim Financial Information
1 Geographical origin segment analysis
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
30 November 30 November 31 May
2002 2001 2002
GBP000 GBP000 GBP000
Sales
United Kingdom 53,214 59,576 108,951
Finland 32,051 32,433 68,936
United States of America 30,746 50,201 98,871
Australia 3,632 7,221 14,962
China 10,035 6,264 12,857
Inter segment (5,809) (9,707) (24,030)
-------------- -------------- --------------
123,869 145,988 280,547
-------------- -------------- --------------
Operating profit/(loss) before closure costs, goodwill
amortisation and impairment, tangible fixed asset impairment and
share compensation
United Kingdom 533 730 2,862
Finland 5,228 4,891 12,316
United States of America (91) 244 2,482
Australia (734) 588 793
China 3,045 2,015 4,332
Central costs (2,533) (2,396) (4,952)
-------------- -------------- --------------
5,448 6,072 17,833
-------------- -------------- --------------
Operating profit/(loss)
United Kingdom 533 730 2,862
Finland 4,281 3,961 10,424
United States of America (3,144) (2,529) (26,522)
Australia (734) 588 793
China 3,045 2,015 4,332
Central costs (2,533) (2,396) (4,952)
-------------- -------------- --------------
1,448 2,369 (13,063)
-------------- -------------- --------------
Notes to the Interim Financial Information
2 Business segment analysis
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
30 November 30 November 31 May
2002 2001 2002
GBP000 GBP000 GBP000
Sales
Wireless infrastructure 81,454 99,541 188,589
Cellular handset products 24,324 23,632 48,845
Electronic warfare 11,014 13,745 26,977
Broadband access 5,888 7,997 12,544
Inter segment (723) (2,719) (3,889)
-------------- -------------- --------------
Excluding compound semiconductors 121,957 142,196 273,066
Compound semiconductors 1,912 3,792 7,481
-------------- -------------- --------------
123,869 145,988 280,547
-------------- -------------- --------------
Operating profit/(loss) before closure costs, goodwill
amortisation and impairment, tangible fixed asset impairment and
share compensation
Wireless infrastructure 13,443 14,003 31,777
Cellular handset products 6,120 5,303 11,570
Electronic warfare (1,848) (1,998) (1,336)
Broadband access (1,372) (990) (3,030)
Central costs (2,533) (2,396) (4,952)
-------------- -------------- --------------
Excluding compound semiconductors 13,810 13,922 34,029
Compound semiconductors (8,362) (7,850) (16,196)
-------------- -------------- --------------
5,448 6,072 17,833
-------------- -------------- --------------
Operating profit/(loss)
Wireless infrastructure 13,443 14,003 31,777
Cellular handset products 5,173 4,373 9,678
Electronic warfare (1,964) (2,123) (1,583)
Broadband access (1,590) (2,898) (11,999)
Central costs (2,533) (2,396) (4,952)
-------------- -------------- --------------
Excluding compound semiconductors 12,529 10,959 22,921
Compound semiconductors (11,081) (8,590) (35,984)
-------------- -------------- --------------
1,448 2,369 (13,063)
-------------- -------------- --------------
Notes to the Interim Financial Information
3 Loss per share
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
30 November 30 November 31 May
2002 2001 2002
Adjusted basic (loss)/earnings per share (0.71)p (2.71)p 2.28p
Effect of adjusted items net of taxation (1.28)p (5.34)p (41.59)p
-------------- -------------- --------------
Basic loss per share (1.99)p (8.05)p (39.31)p
-------------- -------------- --------------
Adjusted diluted (loss)/earnings per share (0.71)p (2.71)p 2.25p
Effect of adjusted items net of taxation (1.28)p (5.34)p (41.56)p
-------------- -------------- --------------
Diluted loss per share (1.99)p (8.05)p (39.31)p
-------------- -------------- --------------
GBP000 GBP000 GBP000
Adjusted (loss)/profit (528) (1,998) 1,687
Exceptional closure costs (2,719) - -
Goodwill amortisation (1,063) (2,670) (5,352)
Exceptional goodwill impairment - - (16,036)
Exceptional fixed asset impairment - - (7,938)
Share compensation (218) (1,033) (1,570)
Net financing currency exchange gain/(loss) 2,027 (236) 165
Exceptional gain on repayment of debt 1,026 - -
-------------- -------------- --------------
Loss on ordinary activities after taxation (1,475) (5,937) (29,044)
-------------- -------------- --------------
Weighted average number of shares 74,186,415 73,760,593 73,881,832
Dilution effect of share options - - 243,482
Dilution effect of contingently issuable shares - - 708,543
-------------- -------------- --------------
Diluted weighted average number of shares 74,186,415 73,760,593 74,833,857
-------------- -------------- --------------
4 Exceptional closure costs
Exceptional closure costs of GBP2,719,000 relate to the closure of
the compound semiconductors fabrication facility at Filtronic Solid
State, Santa Clara, California.
5 Interim financial information
The accounting policies adopted in preparing this interim financial
information are consistent with those set out on pages 22 and 23 of
the Filtronic plc Annual Report 2002.
The interim financial information contained in this report does not
constitute statutory financial statements within the meaning of
Section 240 of the Companies Act 1985.
The figures for the year ended 31 May 2002 are extracted from the
Financial Statements included in the Filtronic plc Annual Report
2002 dated 29 July 2002. Those Financial Statements,
upon which the auditors issued an unqualified opinion, have been
delivered to the Registrar of Companies in England and Wales.
Copies of this Interim Report are available from the registered
office of the company:
Filtronic plc
The Waterfront
Salts Mill Road
Saltaire
Shipley
West Yorkshire
BD18 3TT
Tel: +44 1274 530 622
Fax: +44 1274 531 561
www.filtronic.com
Independent Review Report to Filtronic plc
Introduction
We have been instructed by the company to review the financial information
consisting of the profit and loss account, balance sheet, statement of total
recognised gains and losses, reconciliation of shareholders funds, cash flow
statement and notes and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where they
are to be changed in the next annual accounts in which case any changes, and the
reasons for them, are to be disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin
1999/4: Review of interim financial information issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review is substantially less
in scope than an audit performed in accordance with Auditing Standards and
therefore provides a lower level of assurance than an audit. Accordingly we do
not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 November 2002.
KPMG Audit Plc
Chartered Accountants
Leeds
27 January 2003
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Filtronic PLC
(Registrant)
By: Fiona Pick
Solicitor & Asst. Co. Secretary
Date 27 January 2003