FILTRONIC is expecting to report an operating loss of approximately £1.7 million for the financial year to May 31, 2019.

The compares with a £1.8m profit for the Yeadon-based electronics manufacturer in the 2018 financial year.

The company reported that trading during the second half of the year was broadly in line with market guidance and expects, subject to audit, to report revenue of approximately £20.6m, down from £24m last year.

As it previously announced, sales of the recently introduced Massive MIMO antennas into the telecoms market had been adversely affected by lower demand from a customer but the firm said sales of 5G products were very encouraging with strong growth in demand from their lead client with the forward order book and customer forecasts showing further growth.

As a result it is in the process of expanding capacity and capability at its manufacturing facility in Sedgefield by adding new equipment and recruiting additional staff to meet the increased volume requirements.

The company trading update said: "We continue to make good progress with our clients in public safety and defence and aerospace markets where we are currently seeing several good opportunities with new and existing customers. We are developing new products and capabilities for these markets that we see as important future growth areas.

"Furthermore, the Company was recently notified of a performance issue affecting certain antenna products shipped in FY2016/17 that are still under warranty. The full extent of the issue and number of units affected is under review, however, this issue does not extend to our current product range.

"We are repairing affected products as they are returned, and we are in discussions with the customer on the issue of liability. We will provide further information as the situation becomes clearer."