Filtronic – excellent finals, point to potential for this space products group, shares 147p, brokers increased TP is 198p

Mark Watson-Mitchell
Jul 30
4 min read

30.07.2025

Yesterday morning’s Final Results from Filtronic (LON:FTC), one of this column’s better performers (up nearly 13 times in three years) was extremely positive and showed no surprises.

That is because the Sedgefield-based designer and manufacturer of products for the aerospace, defence, space and telecommunications infrastructure markets, has been painstakingly informative as it has progressed over the last year and a half.

Group CFO, Michael Tyerman, has kept investors up-to-date with a stream of statements about new orders and relevant increased guidance’s for its sales and profits expectations.

For the year to end-May the group reported a 121% increase in revenues to £56.3m (£25.4m), reporting pre-tax profits of £13.4m (£3.4m), a 294% improvement, while lifting its basic earnings 343% to 6.42p (1.45p) per share.

Impressively the groups cash at bank ended the year 101% higher at £14.5m (£7.2m).

Management Comment

Group CEO Nat Edington stated that:

"FY2025 has been a transformative year for Filtronic, showcasing the successful execution of our growth strategy.

Our record revenue growth and landmark wins in the Space and Defence sectors reflect the trust placed in us by global players and that our technology is meeting real world demand.

As we enter FY2026, we are confident in our trajectory, with a strong order book, healthy cash position, and a strengthened leadership team in place.

The transition to GaN technology, expansion into higher-frequency bands, and our move to a new, larger manufacturing facility will enable us to scale effectively and capitalise on the significant opportunities ahead."

The Business

Filtronic develops and manufactures radio frequency (RF), microwave and mmWave technologies.

Its products transmit, receive, and condition radio signals, particularly at microwave and mmWave frequencies. It designs and manufactures RF-to-mmWave components and subsystems for mission-critical communication networks.

The group is at the leading edge of advanced microelectronics globally, specialising in the design and manufacture of mission-critical communication networks.

Delivering solutions that span the full RF spectrum, the group operates from two global manufacturing sites and three engineering centres of excellence.

The group has been building an extensive patent portfolio, which highlights its ongoing drive for innovation and technological leadership.

With a track record of over 45 years', Filtronic's technology is trusted across high-performance sectors including space, aerospace, defence, telecoms infrastructure and critical communications.

The company develops core IP building blocks and transforms them into highly customised solutions for high-growth target markets.

Its expertise enables seamless data transmission, delivering greater bandwidth, lower latency and enhanced connectivity.

The group has successfully coupled this engineering expertise with investment in state-of-the-art production equipment that enables the rapid transition of a turn-key solution from product development to full scale, high-quality manufacturing, at volume.

The strategic markets of Low Earth Orbit (LEO) space, aerospace and defence are the focus of current product development programmes, where Filtronic can add significant value, realise long term sustainable margins and deliver shareholder value.

Outlook

Chairman Jonathan Neale, when commenting the group’s Outlook, stated that:

“We enter FY2026 facing headwinds from a weakened USD but with a growing pipeline and increased customer engagement across multiple markets.

With a robust order book, world-class talent, and a clear innovation strategy, we are well-positioned to lead in the converging sectors of communications, aerospace and defence, and space.

We remain confident that by focusing on what is within our control-engineering quality, customer intimacy, and operational agility-we are positioned for long-term relevance and success.

Our typical sale, design-in, and production cycles range from one to three years, offering the opportunity to grow and extend the long-term visibility of our customer order book.”

The Equity

There are some 219m shares in issue.

The larger holders include David Newlands (9.58%), Canaccord Genuity Wealth (9.36%), Mark Hollingsworth Dixon (6.96%), KW Investment Management (5.04%), Schroder Investment Management (5.03%), Dowgate Wealth (5.02%), Legal & General Investment Management (4.84%), Hargreaves Lansdown Asset Management (3.65%), Driehaus Capital Management (3.22%) and Harwood Capital (2.97%).

Broker’s Views

Tipping my hat to analysts Edward Stacey and Kimberley Carstens at Cavendish Capital Markets – they have called this one right so far.

They are obviously bullish about the group and its prospects.

The analysts note that:

“The results underscore the strong progress with the largest customer programme SpaceX, as well as the broadening of the growth opportunity with new wins in defence and space.

In light of the confirmed positive progress, we revisit our valuation model.”

Yesterday they upped their Target Price for its shares from 158p to 194p.

Their estimates for this year and next suggest sales of £54.0m to end-May 2026, with £8.3m adjusted pre-tax profits, with earnings of 3.2p per share.

For the 2027 year they see £60.0m revenues, £10.0m profits and 3.9p per share in earnings.

My View

Clearly the last couple of years have been a transformational period for Filtronic - one defined by commercial success, operational scale-up, and continued technical innovation, all of which translated into its strong financial performance.

The group has developed a five-year-plan going forward, which if achieved could well see the revenues, profits and earnings pumping ahead significantly.

As that occurs the pe ratio is likely to soar, which will make for jerky price swings in due course.

But do not be put off, until the earnings come in line, the shares will remain a ‘punter’s favourite’ – so from the current 147p to 200p is a fairly close gap to fill in but the shares remain a gamble, not on its prospects but upon its share price.