The year ended 31 May 2008 produced revenue from continuing operations
of £54.6m
and operating profit before exceptional items of £3.9m compared with the prior
year revenue of £38.4m and £1.8m loss. The group loss for the
period was £14.6m after pension settlement compared to £45.0m profit in the
prior year. Cash at the year end was £31.5m
compared with £118.3m at 31 May 2007 after payment of the £89.2m special dividend.
A full breakdown of the year is shown in the financial statements, notes and
narratives which follow.
Having detailed the events impacting the performance
of Filtronic in my report to shareholders at the half year stage, I shall
concentrate in this commentary on the activities of the second half of
the year to avoid repetition. It is pleasing to note that the intentions
described in the half yearly financial report have been delivered. The
sale of Filtronic Compound Semiconductors Limited to RF Micro Devices
was completed on 29 February 2008. Including the disposal proceeds, this
business generated £17.1m of cash during
the period from 30 November 2007 to disposal.
On the same day, 29 February 2008, the company paid a top up amount to Paternoster
which, along with the proceeds of the liquidation of the defined benefit pension
scheme assets, secured the past service liabilities relating to scheme members
by means of annuity purchase. Wind up of the scheme continues with an expectation
of completion by the end of 2008 and subject to further cash funding of around £1m.
Following Court confirmation of the capital reorganisation approved
by shareholders, a special dividend of 120p per share (£89.2m)
was paid to shareholders on 30 May 2008. This left the group with a closing
cash balance of £31.5m.
Of the two continuing operations, the Point
to Point business performed strongly and the UK Defence business showed
some improvement over the first half. Point to Point recorded revenue
similar to the first half year and produced a very encouraging 79% year
on year growth in revenue and 176% growth in operating profit. Point to
Point has had a strong start to the year.
Following the exercise referred to in the year-end trading
update, several attractive offers have been received for the company's
Defence business. Detailed discussions with the preferred bidder are
well advanced. As a result, the decision has been taken to streamline
the Board and reduce corporate overheads in anticipation of a single
focus around the high-growth Point to Point business, under the leadership
of Hemant Mardia. It has been agreed that Charles Hindson, the present
Chief Executive, and Professor Stephen Burbank and Ian Hardington,
both non-executive directors, will step down from the Board at the
AGM on 19 September 2008. I should like to record the Board's thanks
to the departing directors for their respective and substantial contributions
to the past two challenging years of recovery and reorganisation.
In
addition to these anticipated Board changes, Stephen Mole was appointed
to the Board as Finance Director on 13 June 2008.
I should like to
thank all staff in the business who have had to accommodate the changes
in the group over the period.
John Poulter
Chairman
28 July 2008
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