Extra Material from July 2026 Newsletter: Filtronic and BATM

We had some extra material that we were unable to squeeze into a busy July newsletter, so we are including it here for subscribers.

Filtronic     

277.5p (FTC; AIM)

Filtronic has issued a trading update for the year ended May 31, stating that revenue is expected to be £55.5m and adjusted EBITDA £11.1m, with the latter slightly ahead of market expectations. Strong execution across customer programmes, combined with a broader and deeper customer base, helped reduce the group’s reliance on its largest customer. Cash at bank was £13.4m, with net cash (excluding property lease liabilities) of £11.3m (5p per share). Filtronic has also secured a second contract with a USbased customer to design a highfrequency module for satellite payload applications. The contract is worth around US$0.5m, and it follows a US$8.0m award from the same customer announced last March. The deal supports advanced, highbandwidth, lowlatency connectivity at mmWave frequencies and is expected to lead to further programme phases and potential volume manufacturing.

Operationally, fiscal 2026 marked another step in Filtronic’s scaleup. The company expanded its relationship with SpaceX through the multiyear US$62.5m GaN Eband contract, secured additional wins across US and European space and defence markets, and launched nextgeneration highpower mmWave technologies. Moreover, the new selffunded headquarters and manufacturing facility in Sedgefield is now fully operational, with capacity to support revenues exceeding £200m annually. Entering the new financial year, the order book already covers 90% of consensus revenue, and the newly announced US contract further reinforces the company’s strategic positioning in complex RF technologies. The positive outlook appears priced in, however. Even after a recent pullback in the share price due to profit-taking, the stock still trades at a prospective P/E of 65.1 for the current year. The high rating leaves little room for any slips in execution as management pursues ambitious targets for the business. Strong hold.

BATM Advanced Communications    

14.8p (BVC; Healthcare) 

BATM has announced the disposal of three noncore businesses, generating approximately US$37m in cash and accelerating the group’s transition into a focused securenetworking and cybersecurity specialist. The transaction comprises two linked agreements. First, BATM will sell seven corporate entities representing three remaining noncore activities for US$13.3m under a share purchase and loan assignment agreement. The valuation equates to 33 times the disposed businesses’ adjusted net profit for 2025, reflecting the buyer’s confidence in their stand-alone potential. Second, Sunstring, one of the divested entities, will sell its BATM shares at 18.15p each, raising roughly £17.6m (US$23.3m). This represents a 33% premium to BATM’s 30day average share price and a 13% premium to the value at which BATM originally received the shares. Both assets will be acquired by entrepreneur Haim Dor, who will hold around 22% of BATM’s equity postcompletion.

This deal significantly advances BATM’s longrunning programme to exit noncore operations. Only one such subsidiary remains, which BATM expects to divest shortly. The group will then be fully repositioned as a single business focused on highgrowth, highmargin markets, including secure managed networking, quantum encryption and cybersecurity. Net proceeds will be used to scale the commercial pipeline, fund additional proofofconcepts, accelerate R&D, support working capital needs and pursue strategic M&A. The agreements also include contingent upside: if the buyer sells the disposed businesses within two years at a higher valuation, BATM will receive 50% of the excess proceeds. With over US$40m generated from noncore disposals in the past 13 months, the group now has the balancesheet strength to accelerate its strategic plan and focus entirely on its core technology platforms. Strong hold.