Bookham reports four-fold increase in losses

Bookham Technology, which makes optical components for telecoms networks, reported a four-fold increase in losses yesterday and reiterated that it could not predict when trading would improve.

Giorgio Anania, the president and chief executive, said: "It's very difficult for us to second guess customers who are themselves able to change their mind at the last moment and are doing so." Pre-tax losses totalled £44.6m in the second quarter to 1 July, compared with £8.2m in the same period last year, after accounting for a £31.2m exceptional charge to cover redundancy costs, excess inventory purchases, impairment of assets and acquisition impairment. That cost dwarfed £2.7m interest it received from its cash pile.

Warning that the current environment continued to be "difficult", Bookham said Q3 sales would come under pressure after a long-term contract with Nortel Networks, accounting for 70 per cent of second quarter sales, came to a close. Mr Anania said: "We expect Nortel to remain a 10 per cent customer for us on the basis of new products. So a fair bit of that [revenue] will be going away and you can see how much pressure that will put on Q3."

Bookham's sales in the second quarter came in at £5.9m, up 27 per cent from the same quarter of last year but down 50 per cent from the first quarter of this year. It had already warned the City to expect a drop. Shares in Bookham closed up 10.5p at 166.5p.