Spirent Communications plc (LON: SPT), a leading communications technology company, today issued the following Trading Update for the final quarter of the Company’s financial year, from 1 October to 31 December and for the year in full, noting all financial results are subject to external audit.
Group performance
Good momentum continued into the final quarter of 2018, with the Group securing a number of important contract wins.
For ongoing businesses1, order intake in the financial year totalled $470 million, up 6 per cent on 2017, and revenue grew by 6 per cent to $477 million.
In particular, we benefited from strong growth from our Networks & Security operating segment and as predicted, we experienced an increase in demand for 400G high-speed Ethernet test solutions. As previously highlighted, growth in our Positioning business has been particularly strong and includes the benefit from significant one-off business with a US defence contractor (c$10 million revenue) which we don’t expect to repeat in 2019. Due to significant reorganisation in our key customer base for Lifecycle Service Assurance, we saw only modest annual revenue growth for this business. Connected Devices delivered strong profit growth in the year, driven by effective cost management.
We continue to manage our costs effectively, ensuring we retain R&D focus on our optimal growth vectors and invest in our capabilities to sell our assurance solutions to key customers. Improvement initiatives implemented during the year meant we were able to mitigate cost inflation and maintain a broadly flat cost base.
We now expect to deliver an adjusted operating profit2 in the range $75 million to $77 million, demonstrating a year of strong profitable growth, up circa 30 per cent on the prior year, exceeding market expectations.
The balance sheet remains strong, with cash closing at just over $120 million after dividend payments totalling $55 million during the year.
Commenting on the results, Eric Hutchinson, Chief Executive Officer, said:
“We are pleased our portfolio is delivering revenue growth. Our focus is to support our customers to manage their networks in the face of increasing complexity and their need for cost optimisation. We expect to exceed the market’s profit expectations for the financial year 2018. We have market leading technology offerings and are well placed to optimise opportunities as they continue to arise.”
Spirent will announce its full year results for the financial year ended 31 December 2018 on
7 March 2019.
The Company will host a results presentation at 09.30am UK time on Thursday, 7 March 2019 at FTI Consulting Limited, 200 Aldersgate, Aldersgate Street, London EC1A 4HD.
