Telecoms technology firm Filtronic is set to make a loss of around £1.7m after overestimating demand for new antenna equipment.
The firm - which has sites at Leeds and Sedgefield, County Durham - has warned that it expects to make an operating loss of £1.7m for the year ending May 31, after previously making a profit of £1.8m in 2018. Turnover is also forecast to fall from £24m to just £20.6m.
The drop in sales comes after Filtronic suffered from lower than expected demand of its Massive MIMO antennas, which are set to be a core component of the super-fast 5G networks being built in the UK.
In a trading update the company said: “As previously announced on 12 December 2018, sales of the recently introduced Massive MIMO (mMIMO) antennas into the telecoms market had been adversely affected by lower demand from our Original Equipment Manufacturer customer than originally forecast.
“There has been a continued lack of clarity regarding future demand for this product throughout the second half of the year due to the ongoing delays in proposed corporate consolidations of the US Mobile Network Operators.”
Filtronic has also been notified of a “performance issue” affecting one of its antenna products, which were shipped during the 2016/17 financial year. Although the company said it is repairing affected products it added that the goods are still under warranty and that it is in discussions with its customers regarding “liability”.
Filtronic is now conducting a review of the issue and how many of the units are affected by the problem. However, it says that none of its current product range have been impacted by the fault.
Meanwhile, the company said sales of its 5G E-band backhaul products were “encouraging” after undergoing strong growth in demand from a major client. Forward order books and forecasts predict this growth will continue during 2020.
To meet this demand Filtronic is expanding its Sedgefield manufacturing facility by adding new equipment and recruiting more staff.
In January, Filtronic also launched a strategic review of its telecoms antennas business and is now progressing towards finalising its plans.
