Filtronic Absorbs Profit Pressure as Investment Drives Record Order Book

Filtronic (LSE:FTC) reported half-year results for FY2026 broadly in line with expectations, with revenue stable at £25.3m but profitability lower year on year as the group stepped up investment to support long-term growth. Increased spending on staff, facilities and product development, alongside currency headwinds from a weaker US dollar, weighed on margins and EBITDA during the period.

Despite the short-term profit impact, cash generation remained strong. Filtronic said it successfully self-funded its relocation to a larger headquarters and manufacturing facility, a move that expands capacity and supports future demand. Commercial momentum was also evident, with the company securing a number of significant long-term contracts. These included its largest-ever agreement, a $62.5m deal with SpaceX, as well as multi-year awards across European space and defence programmes.

As a result, the group’s order book reached a record level and now covers around 90% of forecast FY2026 revenue. Management said this high level of forward visibility underpins confidence in sustained growth and supports its five-year strategy, which is centred on gallium nitride (GaN)-based high-frequency systems for space, defence and adjacent mission-critical markets.

From an investment perspective, Filtronic’s outlook continues to be supported by strong underlying financial characteristics, including rapid revenue growth, attractive margins, low leverage and solid cash flow. Share price technicals remain supportive, although overbought signals suggest some near-term risk. Valuation is a moderate headwind given the higher earnings multiple and the absence of a dividend.

More about Filtronic

Filtronic plc is an AIM-listed designer and manufacturer of advanced RF, microwave and millimetre-wave products and sub-systems. The company serves aerospace, defence, telecoms infrastructure, space and critical communications markets, with a growing emphasis on high-frequency technologies such as gallium nitride for high-reliability, mission-critical applications worldwide.