GA-Courtenay Special Situations Fund on Filtronic plc
Thesis
Filtronic is viewed as a monopolistic supplier to SpaceX whose shares had fallen roughly 50% from their May high. Its new factory is designed to support more than £200 million of annual revenue, and the fund models full utilization within two years. At £210 million of revenue and a 20% net margin, the manager estimates normalized earnings of £42 million, implying a 12.4x P/E at factory capacity. The order book already covered 90% of consensus forward-year revenue, non-SpaceX revenue grew 99% year over year, and the company carried net cash, which the manager sees as increasingly de-risking the path to higher economics.
“Nearer-term expectations for Filtronic are also well underwritten: the current order book already covers 90% of consensus revenue for the forward year.”
Key risks
- The timing of factory utilization depends on Starship launch cadence.
- SpaceX remains the dominant customer and therefore creates material customer-concentration risk.