Orders flat at e2v

A supplier of radio frequency, microwave and semiconductor products, Chelmsford-based e2v stripped out £5m in operating costs through the six-month period, a feat it intends to repeat in the second half. Mr Attwood expects profit margins to rise in the next six months on the back of higher turnover. Broker Investec projects full-year revenue of £206m, believing e2v's expansion into space, medical and US defence markets will give it some protection against stagnant global industrial sectors.

Mr Attwood attributes the sharp decline in turnover to deferred orders for US and UK defence, lower demand in its commercial and industrial businesses, and delayed revenue from the space segment. Moreover, e2v failed to book any sales from IPS (industrial processing systems) with longer than anticipated delays in securing development revenue from Rio Tinto. The company signed a multi-year development agreement with the mining giant earlier this year to improve the efficiency of copper recovery. It has also struck recent deals with China Academy of Space Technology (CAST) and Micron Technology.

Cash generated from operations slumped 68 per cent to £5.4m, squeezed in part by increased inventory on account of space programme delays. Mr Atwood says cash flow should improve in the second half as inventory clears.

Investec expects full-year adjusted pre-tax profits of £36.1m and EPS of 12p, rising to £40.9m and 13.6p in 2014 on revenues of £214.3m (from £234.6m and 13.4p in 2012).