The high-reliability semiconductor and imaging component manufacturer is expanding in Asia, but restructuring in the UK.
e2v Technologies, the UK company that makes a range of semiconductor components including high-end imaging sensors, has confirmed that revenues in the first half of its current fiscal year will be below earlier expectations.
Like-for-like sales are now expected to be down 9% on the prior year, impacted by deferred orders from defense customers in both the US and UK – e2v’s key sectors. The firm had warned in July that markets had become “more challenging”, while the general slowdown in spending by the US Department of Defense had prompted the now-aborted merger talks between customers EADS and BAE Systems.
In a trading update published a month ahead of the company’s official results announcement, e2v’s management said that sales in the first half would likely total £90 million, down from £115 million in the prior year. However, when one-off sales and discontinued lines are taken into account, the like-for-like decline is only 9%.
“Expected revenue for the continuing business for the first half reflects the challenging external environment, with deferred orders for US and UK defense and lower intake in our commercial and industrial businesses,” e2v reported. “In space, technical challenges in the first quarter delayed the achievement of milestones, in addition to delayed order intake on one program.”
Despite the revenue fall, the company adds that it has been able to maintain profit margins thanks to implementing a more flexible operation – notably at its Grenoble, France, site.
“The staffing flexibility that we had established in our Grenoble business allowed us largely to accommodate the lower levels of activity, along with careful cost control in the US as we moved into the new facility in July, resulting in margins in line with our expectations despite the lower level of output,” stated the update, adding that these actions had reduced costs by some £5 million in the first half just completed.
However, chief executive Keith Attwood said that further restructuring was now being implemented, primarily at the Chelmsford, UK, facility that houses e2v’s RF power solutions division.
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