• Results in line with Market Expectations
• £3.8m Pre-Tax Profit from £25.5m Loss; Gearing down 30% to 51%;
• Dividend maintained
• Consolidates Leading Market Position in Both Major Businesses

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 2003. Worldwide sites are in the UK (North of England, Yorkshire, Midlands, Scotland), USA, 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 year when worldwide demand for the supply of wireless telecommunications products continued to decline, with few signs of an imminent upturn.

In his Statement, Professor J. David Rhodes CBE FRS FREng Executive Chairman said: “Notwithstanding these challenging market conditions, Filtronic consolidated its position as the world’s leading independent supplier of transmit / receive modules for mobile base stations. Filtronic is one of the world’s leading manufacturers of mobile handset antennas and supplies over 25% of the world demand.”

Financial Highlights

• Group sales of £241.3m (2002: £280.5m)
• Operating profit before non-cash items of £11.0m (2002: £17.8m)
• Pre-tax profit of £3.8m (2002: £25.5m loss)
• Earnings per share of 1.46p (2002: 39.31p basic loss), 1.45p on a diluted basis (2002: 39.31p diluted loss)
• Wireless Infrastructure operating profit of £20.9m (2002: £31.8m)
• Cellular Handset Products operating profit of £12.9m (2002: £11.6m)
• Final dividend maintained at 1.8p (2002: 1.8p), payable 3 Nov 2003, for 2.7p total (2002: 2.7p)
• Cash generation of £19.5m
• Net gearing down from 81% to 51%

Operational Highlights

• Wireless Infrastructure: Outperformance against competitors
  • Pricing pressure in 2G and 2.5G systems
  • Low levels of demand for 3G WCDMA products
  • Well positioned for third generation deployment
• Cellular Handset Products: Record sales, operating profit up, margins maintained
  • Supplied 106 million handsets, up 23%; new Far Eastern customers
• Electronic Warfare: Business profitable second half, increasing on monthly basis 2003
  • Increasing production volumes for European Fighter Aircraft
• Broadband Access: Business relocated to Newton Aycliffe, new products
• Compound Semiconductors: New products, new business opportunities, losses reduced
• Transfer of closed California business to Newton Aycliffe

Development of Compound Semiconductor Technologies

• New proprietary processes for switches, power transistors and MMICs

Outlook

In his Statement, Professor J. David Rhodes said: “The Board expects that the group will continue to generate cash and reduce indebtedness during the financial year ending 31 May 2004.”

“Overall, our two main businesses are expected at least to maintain their market position. In addition, the Electronic Warfare business is now growing and profitable. The range of products and processes, particularly at Newton Aycliffe, has been expanded to provide a platform for growth.”

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