FILTRONIC has reported a loss in the first half of the financial year as it struggles to cope with a downturn in orders.

The Yeadon-based company gave a trading update in December which included a drop in sales in the first half of the financial year.

It said then it expected to make a loss this financial year after predicting a lower-than-expected demand for one of the antennas it produces.

Today it confirmed that it recorded an operating loss of £900,000 for the six months

ended November 30, 2018, compared to a profit of £900,000 in the same time last year.

The designer and manufacturer of antennas, filters and mmWave products for the wireless telecoms infrastructure and adjacent markets reported sales of £10.4 million in the first half of the year, down from £12.8m last year.

Commenting on the figures, chairman Reg Gott said a freeze on the roll-out of mMIMO antennas by launch client was a significant set-back to its plans but said the company were encouraged by the fact the programme had not been cancelled.

He also said the outlook for the antenna market remained positive and expected trading to be similar in the second half of the year.

The report highlighted a third major multi-year defence contract valued between £3m and £5.7m which was received to provide state-of-the-art microwave modules for use in defence radar systems.

Mr Gott said: “Our focus on high margin products and the strategic decision to target critical communications markets has been a key component of our strategy to mitigate the revenue volatility of network roll-outs in the telecoms market.

"This focus has provided us with a significant level of baseline business and improved visibility of future revenues, along with further opportunities to grow our product offering and customer base.

"The news received in December from our mMIMO launch client that the end-customer was putting its rollout programme on hold and thus significantly reducing its forecast demand until further notice, was a significant set-back to our growth plans. However, our client has confirmed that the programme is not cancelled and they will continue to sell and market our mMIMO products into the market. "Notwithstanding this setback, we believe the outlook for the antenna market remains positive, with continued industry investment in network developments for 4G densification and 5G roll-outs.

"Subsequent to the December notice we have received a follow-on order for the balancing requirement of mMIMO for H2 which underpins our confidence in the sales outlook for the remainder of the year and this, combined with our solid platform of long-term business within critical communications, means we expect trading in H2 to be broadly similar to H1.

"We require a little time to fully evaluate the ongoing status of the mMIMO programme, bring the new distribution arrangement up to speed and complete a review of our options for the antenna business but, in the meantime, we are comfortable with our current cash position and cash flow outlook."