News Column

Spirent Trading In Line With Expectations Despite Slight Profit Drop

July 31, 2014

Hana Stewart-Smith

LONDON (Alliance News) - Spirent Communications PLC Thursday said it was trading in line with its expectations for high single-digit organic revenue growth, as it saw profit decline slightly in the half year to end-June.

The communications technology company proposed an interim dividend of 1.68 cents, up from 1.53 cents in the previous year.

Spirent posted a pretax profit of USD13.9 million, down from USD14.5 million, as revenue rose to USD221.0 million from USD190.4 million, but this was offset by higher cost of sales and operating costs.

Gross margin declined to 68.3% from 69.6%, mostly due to differences in the product mix in its Wireless and Service Experience business.

Revenue growth was driven by improved market conditions, some customers increasing their capital spending plans, successful new product launches, and a large field test order in its Service Assurance segment.

Order intake was up 4%, as growth in Networks and Applications, and Wireless and Service Experience, was offset by lower order intake in Service Assurances. This was due to field tests booked in the first half of the previous year not recurring.

Revenue growth was up 12% in its largest region, the US, up 22% in Asia Pacific due to strong activity in China, and up 28% in Europe as the market recovered after a very weak comparative period.

The company said it had continued to see progress from investments it set out at the time of its full-year results for 2013, and expects to see further advances in its second half.

"The key objective for Spirent in 2014 is to achieve a return to growth in the business through focus and investment in new products, services and solutions. The developments in the first half demonstrate that these are working," said Chief Executive Eric Hutchinson in a statement. "Momentum is expected to build through the rest of this year."

Shares in Spirent were trading up 1.4% at 103.40 pence Thursday morning.

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Source: Alliance News

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