Spirent Communications plc (LON:SPT), the leading provider of automated test and assurance solutions for next-generation devices and networks, has today issued the following Trading Update for the financial year ended 31 December 2022, noting all financial results are subject to external audit.
Group performance
· 2022 results in line with expectations, good earnings growth
· Strong orderbook built over last 18 months
· Strong balance sheet and cash flow, resilient business model
We are pleased to deliver our full year results for 2022 in line with expectations having successfully navigated global economic challenges, supply chain constraints and increasing cost inflation. Full year revenue grew by 5.5 per cent to $607 million and we expect to deliver an adjusted operating profit1 slightly ahead of market consensus2, showing good earnings growth over 2021.
As previously communicated, global market economic conditions have been impacting some of our customers, resulting in delays to their investment decisions. Whilst we expect customers to remain committed to their development projects overall, evidenced by no cancellations, the Group’s performance is now likely to have a heavier than usual weighting to the second half of 2023.
We continued to win important strategic deals and further built our orderbook by 7 per cent during 2022. This performance was achieved following significant orderbook growth in 2021. High-speed Ethernet grew strongly driven by new product releases including new application security products, which offset some customer timing impacts in Lifecycle Service Assurance.
Financial position
We maintained our strong balance sheet and disciplined investment policy. The Group’s cash position closed at $210 million supported by our effective working capital management. We remain strongly placed to take advantage of investment opportunities as they arise.
Outlook
We are pleased to have started the new financial year with a strong orderbook. We are well positioned to deliver further strategic and operational progress, with our key business drivers intact, and we continue to invest in our leading technology solutions across our portfolio. Overall, the Group remains well-placed to deliver continued progress in the year ahead, although there will be greater weighting to the second half.
Eric Updyke, Spirent Communications Chief Executive Officer, commented:
“Against a challenging market backdrop, we have delivered a good performance, demonstrating the enduring, through-the-cycle strengths of our operating model and service offerings.
Networks are becoming more complex than ever before and as customers seek faster, more reliable, more secure connectivity solutions, the heightened need for automated testing and assurance will require greater support from Spirent.
We expect the Group to continue to progress in 2023, and in spite of the global economic conditions are confident in our mid-term targets with the long-term structural growth drivers for our business continuing to be compelling.”
Spirent expects to announce its full year results for the financial year ended 31 December 2022 on Wednesday, 8 March 2023.
Notes
1. Adjusted operating profit is before acquired intangible asset amortisation, share-based payment and other adjusting items.
2. Management believes consensus expectations for adjusted operating profit for the year to be $127 million, with a range of expectations of $122 million to $131 million.
