Edison Investment Research Limited
London, UK, 3 June 2021
Filtronic (FTC): Initiation - Building a stronger connection
In early 2020 Filtronic's management refocused the business on market niches where the company's expertise in designing and manufacturing high performance radio-frequency (RF) components and sub-systems operating at frequencies up to 180GHz can command a premium. Having doubled the RF manufacturing capacity in FY20, management's strategy, led by new CEO Richard Gibbs, is to broaden the customer base and product range. Generating higher revenues from the same cost base should deliver improved EBITDA margin.
Comparing Filtronic's multiples with RF specialist peers, we note it is trading broadly in line with the mean on both prospective EV/sales and EV/EBITDA. This is reasonable in our opinion because our estimates predict the group's FY21 EBITDA margin will be at a small discount to the mean. Given the current underutilisation of manufacturing capacity, we see scope for successful execution of management's sales initiative to deliver revenue growth and improvement in EBITDA margin during FY22, potentially driving an uplift in the share price.
All reports published by Edison are available to download free of charge from its website
About Edison: Edison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By focusing on the volume and quality of investors reached - across institutions, family offices, wealth managers and retail investors - Edison can create and gauge intent to purchase, even in the darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings.
Having been the first in-market 17 years ago, Edison now has more than 100 analysts covering every economic sector. Headquartered in London, Edison also has offices in New York, Frankfurt, Amsterdam and Tel Aviv and a presence in Athens, Johannesburg and Sydney.
Edison is authorised and regulated by the Financial Conduct Authority.
Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.
For more information, please contact Edison:
Anne Margaret Crow +44 (0)20 3077 5700 email@example.com
Dan Ridsdale +44 (0)20 3077 5729 firstname.lastname@example.org
Learn more at www.edisongroup.com and connect with Edison on:
Dissemination of a CORPORATE NEWS, transmitted by EQS Group.
End of Announcement - EQS News Service