Filtronic in £50m loan breach

13 April 2012

SHARES in mobile phone parts maker Filtronic plunged almost 15% today after it swung into the red and revealed it has breached some of the covenants on a £50m loan.

Little more than a month after a profit warning, the group's shares dropped 26p to 149p, a far cry from the 2325p at the height of the hi-tech boom.

Filtronic's main banks 'have confirmed their continuing support' but the setback will add to the huge challenge facing new chief executive John Roulston, who joins on 6 September.

The weaker US dollar and high financing costs meant the group ran up pre-tax losses of £409,000 over the year to 31 May, against profits of £3.8m in the same period 12 months ago. The earnings slump led to 'certain breaches' of financial covenants associated with the term loan.

The group has moved much of its production to China to cut costs.

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