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August 10, 2000
Bookham Technology's Loss Widened
But Revenue Surged in Second Quarter
A WSJ.COM News Roundup
LONDON -- Bookham Technology PLC Wednesday said its second-quarter pretax loss more than doubled from a year earlier as investment in staff, a new factory, and spending on product and business development increased.
Bookham's pretax loss widened to 8.2 million pounds (13.6 million euros or $12.3 million), or seven pence a share, from 4 million pounds, or five pence a share, in the year-earlier period.
Is Bookham Technology The Next Big Thing? (July 14)
The optical-networking company's revenue, however, surged to 4.6 million pounds for the quarter, from 2.5 million pounds in the first quarter and from 413,000 pounds a year earlier, with 59% of sales coming from major customer Nortel Networks Corp.
Bookham shares fell 2.22 pounds, or 5.04%, to 41.85 pounds Wednesday on the London stock exchange.
Chief Financial Officer Stephen Cockrell said second-quarter growth had been driven by an increase in shipments of integrated optical circuits to telecoms services. Bookham expects to continue growing faster than the 35% annual growth rate of the fiber-optics industry, he added.
"Our growth margin is trending in the right direction and profitability will depend entirely on our investment in product development and the growth of sales in the business," Mr. Cockrell said. "We will continue to invest in product development very strongly," he added. "In absolute terms I would expect it [investment in product development] to go up, but in relation to turnover I would expect it to decline."
Research and development costs amounted to 3.3 million pounds in the second quarter, up 50% from 2.2 million pounds in the first quarter. The company's staff levels rose 50% to 590 people in the second quarter.
Separately, Bookham said it is considering a secondary share offering, following its initial public offering in April. Mr. Cockrell said the offer would be made up of shares held by existing shareholders and perhaps some new shares to raise funds for further expansion. But the main reason for the offer would be to increase liquidity in the company's stock. "There has been some volatility in the share price and the advice [to us] is that we would benefit from such an offer," Mr. Cockrell said.
Bookham, which joined the FTSE 100 Index in June, also announced that Chief Executive Andrew Rickman will take on the additional role of Chairman.
The information-technology-hardware manufacturer has a market capitalization of about 5.9 billion pounds. It is the only company doing silicon-on-silicon optical grating on its chips, using basic, time-tested semiconductor manufacturing techniques. Others in the industry makes silica, or glass, on silicon gratings that guide the light on the chips.
Bookham claims its technology will result in lower-cost components. The company also claims silicon results in less "cross-talk," or mixing between wavelengths, improving the quality of components. Competitors argue that silica components have better performance, with less loss of light when it is inserted into the chip.
Bookham has contracts with the top five optical-networking-equipment makers in the world.
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