Spirent Communications First Quarter Trading Update 2017

3rd May 2017 | Spirent Communications Plc

Spirent Communications plc (“Spirent”, the “Company” or the “Group”) (LSE: SPT), a leading communications technology company, today issues the following trading update for the period from 1 January to 31 March 2017.

 Group performance

The year has started well with the first quarter trading ahead of the same period last year.  Revenue was up 4 per cent to $106.4 million and profit up $5.8 million to $7.6 million.

 Order intake was broadly level in the quarter compared to the same period last year and reflects the usual seasonality of the business.  Ongoing trends of strong demand for Networks & Security testing offset the continuing decline of Connected Devices testing for smartphones in particular.  Book to bill ratio for the quarter was 85 (2016: 89).

 

Results

The results for the first quarter are set out below:

 

$ million

1st quarter 2017

1st quarter 2016

Order intake

90.2

91.3

Revenue

106.4

102.7

Adjusted operating profit1

7.6

1.8

Free cash flow2

19.5

16.2

Notes

1 Adjusted operating profit is before charging exceptional items, acquisition related costs, acquired intangible asset amortisation and impairment, goodwill impairment and share-based payment.
2 Operating cash flow after tax, net interest and net capital expenditure.

Networks & Security

A strong performance in the period, with revenue up 23 per cent to $64.3 million.  Demand for high-speed Ethernet products launched last year continues and momentum is also gathering for our new cyber security offerings.

Lifecycle Service Assurance

Revenue in the first quarter of $22.5 million, compared to $26.2 million in the same period last year.  A key focus in the early part of this year is integrating our products and services to deliver automated active test analytics.  The pipeline for customer assurance requirements is promising for second half order intake.

Connected Devices

Revenue in the period was $19.6 million compared to $24.1 million in the first quarter of 2016, reflecting the ongoing reduction in smartphone testing.

Free cash flow in the first quarter of 2017 was $19.5 million compared to $16.2 million in the same period last year.  The balance sheet remains strong, with cash of $115.8 million, up from $96.1 million at 31 December 2016.

Commenting on the results, Eric Hutchinson, Chief Executive Officer, said:

“I am pleased with the positive start to the year underpinned by strong growth in Networks & Security.  We continue to focus on leading edge technologies supporting our chosen portfolio of initiatives whilst carefully responding to market trends in our Connected Devices segment.  The strong start and ongoing demand for our core products and services gives us confidence for further growth in 2017 and our expectations for the year remain unchanged.”

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