Filtronic (LON:FTC) – ready to blast off again or is it time to take it more slowly and not chase?

07.05.2025

Yesterday’s Trading Update from this designer and manufacturer of products for the aerospace, defence, space and telecoms infrastructure markets, announced that the outlook for both its 2025 and 2026 trading years could exceed current market expectations.

The company has now completed investments in manufacturing capacity which will allow Filtronic to meet increased customer demand.

The statement refers to both new and existing customer programmes to benefit FY26E.

CEO Nat Edington stated that:

"We are very pleased with the substantial progress we've made and the positive impact it's having on our financial performance.

The team has worked tirelessly to bring new programmes to fruition across the defence and space markets.

Our continued investment in engineering and manufacturing has positioned us to meet growing demand, and we are confident in the trajectory of the business as we scale to capitalise on future opportunities."

Analysts Edward Stacey and Kimberley Carstens at Cavendish Capital Markets took the group’s new guidance to heart and upped their revenue estimates for the year, to the end of this month, by 9.1% and our EBITDA by 15.6%.

For the end-May 2025 finals, they go for £55.0m (£25.4m) revenues, while adjusted pre-tax profits could well quadruple to £14.1m (£3.4m), boosting earnings to 5.9p (1.4p) per share.

The analysts, who maintained their 110p Target Price, were also increasing their revenue figures for 2026 by 8.7% to £50.0m, with adjusted pre-tax profits of some £7.9m, earning about 3.0p per share.

This column has had a magnificent ride with the company’s shares, rising more than five times in price over the last 16 months.

The shares, which were up to 119p in early March, before all of Trump’s terrible Tariff Debacle, but have since been back down to 72p a month ago.

Yesterday on the back of a very healthy 2.7m dealing volume, the shares closed the day 10% higher at 105.50p, they opened at 107p this morning.

Based upon those broker estimates, despite the massive Space Sector order potential, I would now be wary about chasing the shares without more solid coming-year earnings indications.

Without doubt, I am a fan of this group and still consider that its prospects over the next two-to-five years warrant medium-term holdings being maintained.

(Profile 04.02.22 @ 11.6p set a Target Price of 14.5p*)

(Profile 04.01.24 @ 21p set a Target Price of 24p*)

(Profile 26.06.24 @ 67p set a Target Price of 80p*)