• Results in line with Trading Update
• Production Contracts with all major OEMs
• Confident Outlook

Filtronic plc ("Filtronic"), a leading global designer and manufacturer of customised microwave electronic subsystems for the wireless telecommunications and defence industries, announces its Preliminary Results for the year ended 31 May 2004. Worldwide sites are in the UK (North of England, Yorkshire, Midlands, Scotland), USA, Finland, China and Australia.

Both major businesses, Wireless Infrastructure and Handset Products, produced the majority of sales and all of the operating profits, as in the previous financial year. Filtronic is one of the world¹s leading independent suppliers of transmit receive modules for base stations and the world¹s leading manufacturer of mobile handset antennas.

Professor J. David Rhodes CBE FRS FREng Chairman said: "The impact of the weak US dollar against budgeted exchange rates reduced sales and operating profit in the core wireless infrastructure business. We have accelerated manufacturing of our wireless infrastructure transmit/receive modules to China. The reorganisation of our business segments at the Interim stage, with a broad range of new products, including power amplifiers, better positions Filtronic."

Financial Highlights

• Group sales of £237.2m (2003: £241.3m)
• Operating profit of £3.7m (2003: £6.7m)
• Net interest and financing costs were £8.6m (2003: £2.9m) ­ Primarily due to early repayment of 10% Senior Notes
• Pre-tax loss of £409,000 (2003: £3.8m)
• Loss per share of 4.04p (2003: basic EPS of 1.46p)
• Final dividend maintained at 1.80p (2003: 1.80p), payable 1 November 2004, for 2.7p total (2002: 2.7p)
• Net gearing unchanged at 51%

Operational Highlights

• Wireless Infrastructure: Production contracts secured with all major OEMs
  - Transmit/receive modules to benefit from lower cost Chinese manufacturing
  - Growth to mainly occur in China for transmit/receive modules towards end December, start of 2005
  - UK to focus on new product introductions for transmit/receivers and power amplifiers
  
  
• Handset Products: Supply of internal antennas with higher levels of mechanical integration
  - Second half operating margins approximately 15% to remain at this level
  - Growth expected, new products to consolidate market leadership
  
  
• Integrated Products: Increasing compound semiconductor sales reduces losses, expected to continue
  - Past investment in Newton Aycliffe creating strong upside potential
  - Major market opportunity for Integrated Power Amplifiers for 3G base stations
  - Own supply of low cost, higher efficiency GaAs transistors offers significant advantages
  
  
• Capital expenditure of £18m in 2005, approximately 50% more than in 2003/4
• Strategic alliance with BAE Systems: producing sales; forward growth potential for radar surveillance
• New Chief Executive Officer Professor John Roulston joins 6 Sepember 2004

Outlook

Professor J. David Rhodes said: "We are now delivering production quantities of wireless infrastructure products to all major OEMs. Filtronic is well placed for growth in 2004/2005 financial year as it continues to gain market share in transmit/receive modules for base stations, introduces new compound semiconductor based products across a broad range of markets, and commences the supply of integrated power amplifiers for 3G WCDMA Networks."

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