Annual Financial Report

RNS Number : 0057B

Spirent Communications PLC

27 March 2013

 



SPIRENT COMMUNICATIONS PLC

ANNUAL REPORT 2012 AND ASSOCIATED DOCUMENTS

London, UK - 27 March 2013 - Spirent Communications plc (the "Company") (LSE: SPT), a leading communications technology company, announces that its Annual General Meeting will be held on Wednesday 1 May 2013 at 10.30am at Holborn Gate, 26 Southampton Buildings, London, WC2A 1PB.

In compliance with Listing Rule 9.6.3, the following documents have today been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM

·     Annual Report 2012

·     Notice of 2013 Annual General Meeting

·     Form of Proxy for 2013 Annual General Meeting

The Annual Report 2012 and Notice of 2013 Annual General Meeting are also available in the Investors section of the Spirent Communications plc website at www.spirent.com.

A condensed set of the financial statements for the year ended 31 December 2012 together with information on important events that occurred during that financial year and their impact on the financial statements were contained in the Preliminary Results announcement made on 28 February 2013.  That information, together with the information set out in the appendices to this announcement, which is extracted from the Annual Report, constitute the material required by Disclosure & Transparency Rule 6.3.5 which is required to be communicated to the media in full unedited text through a Regulatory Information Service.  This announcement is not a substitute for reading the Annual Report.

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Enquiries

Rachel Whiting Company Secretary

Spirent Communications plc

[phone]

About Spirent Communications plc

Spirent Communications plc is a global leader in test and measurement inspiring innovation within development labs, communication networks and IT organisations.  We enable today's communication ecosystem as well as tomorrow's emerging enterprises to deploy life-enriching communications networks, devices, services and applications.  Further information about Spirent Communications plc can be found at www.spirent.com.

Spirent Communications plc Ordinary Shares are traded on the London Stock Exchange (ticker: SPT).  The Company operates a Level 1 American Depositary Receipt ("ADR") programme with each ADR representing four Spirent Communications plc Ordinary Shares.  The ADRs trade in the US over-the-counter ("OTC") market under the symbol SPMYY and the CUSIP number is 84856M209.  Spirent ADRs are quoted on the Pink OTC Markets electronic quotation service which can be found at www.pinksheets.com.

Spirent and the Spirent logo are trademarks or registered trademarks of Spirent Communications plc.  All other trademarks or registered trademarks mentioned herein are held by their respective companies.  All rights reserved.

This document may contain forward-looking statements which are made in good faith and are based on current expectations or beliefs, as well as assumptions about future events.  You can sometimes, but not always, identify these statements by the use of a date in the future or such words as "will", "anticipate", "estimate", "expect", "project", "intend", "plan", "should", "may", "assume" and other similar words.  By their nature, forward-looking statements are inherently predictive and speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future.  You should not place undue reliance on these forward-looking statements, which are not a guarantee of future performance and are subject to factors that could cause our actual results to differ materially from those expressed or implied by these statements.  The Company undertakes no obligation to update any forward-looking statements contained in this document, whether as a result of new information, future events or otherwise.

Appendices

Appendix A: Responsibility statement

The Annual Report and consolidated financial statements are the responsibility of, and have been approved by, the directors.

Each of the directors confirms that, to the best of their knowledge:

·          the consolidated financial statements of the Group and parent Company financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and the profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

·          the Annual Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

By Order of the Board

Eric Hutchinson

Chief Financial Officer

28 February 2013

Appendix B: Related party transactions

Remuneration of key management personnel

The remuneration of the directors, who are the key management personnel of the Group, is disclosed in the Report on directors' remuneration.

There were no other material related party transactions during the year ended 31 December 2012.

Appendix C: Our principal risks and uncertainties

RISK AND POTENTIAL IMPACT	MITIGATION ACTIONS
Macro-economic and industry sector
Spirent is a global business exposed to the current world economic conditions. We are particularly exposed to conditions in the telecommunications sector into which we sell many of our products and services and which has experienced significant downturns in the past. A deterioration in economic or sector conditions may lead to a reduction in the level of demand for Spirent's products and services and cause our customers to delay their purchasing decisions. Although the EU has taken steps to stabilise the euro there still remains significant financial and political uncertainty in the Eurozone, with the potential for a full or partial break‑up of the euro. Spirent is exposed to these factors through its operations in the Eurozone, 11 per cent of Spirent's revenue is derived from this region. However, the economic situation in the EU, which has been affecting growth rates in this region, may also affect demand globally.	Having the ability to adapt to changing market dynamics is key in order to minimise the effects of adverse economic or sector conditions. Our businesses closely monitor both market and geographic trends so that we can respond to changes in demand and are in a position to take timely actions to protect profitability where possible. In addition, Spirent has a broad product portfolio of innovative test solutions and a large number of geographically diverse customers. A component of our strategy is our global reach.
Technological change and competition
Spirent sells complex solutions in industries that are characterised by rapid technological changes. Keeping at the forefront of these key future technologies is critical to our success and to ensure that we remain competitive in our markets. It is critical that our innovation is directed at the right areas to enable Spirent to develop those solutions that our customers need at the time when they need them. If we fail to achieve these objectives our competitive position, revenue and operating profits will suffer.	Developing the "Right Solution" at the "Right Time" is a key component of Spirent's strategy. We always work closely with customers and remain focused on their requirements and believe we are investing in areas that represent their future. A Portfolio Planning Team is in place which is responsible for reviewing and making investment decisions across Spirent's portfolio of investment opportunities. We continue to make significant investment in product development. In 2012 our investment was increased by 3 per cent to $86.1 million in order to underpin our organic growth initiatives. During 2012 we have made organisational changes to further facilitate knowledge of new market areas outside our served market, with individual managers designated responsibility for investigation, review and action plans arising from such initiatives.
Reliance on contract manufacturers
We use contract manufacturers for the manufacture of a substantial amount of our products. Our major contract manufacturer is located in Thailand. Disruption or financial problems of contract manufacturers or limitations in the manufacturing capacity at contract manufacturers could either limit supply or increase our costs.	We work closely with our contract manufacturers and maintain a regular on‑site presence. To minimise the effect on supply that could be caused by disruption at contract manufacturers there are contingency plans in place to transfer manufacturing to other locations.
Business continuity risks
Operational risks are present in the Group's businesses. These risks include the risk of failed internal and external processes and systems, human error and external events, such as a natural disaster. For example a significant portion of our communications operations are located in California which has in the past experienced natural disasters, including earthquakes and wildfires. A significant natural disaster could disrupt our ability to conduct business and impact adversely our revenue and operating results.	An important component of Spirent's corporate governance is its integrated risk management strategy and its regular self‑assessment of risks encompassing all business units. IT disaster recovery plans are in place for all core business systems. In 2012, the disaster recovery plans were reviewed for each business unit to ensure that the wider operations are all fully covered. In addition, the Group's largest manufacturing subcontractor has worldwide multiple sites and comprehensive business continuity plans.
Retention and recruitment of key staff
Spirent is its employees. So attracting and retaining highly qualified and skilled employees is essential in enabling us to deliver on our strategy and to the success of our business. We face competition for personnel from other companies and organisations and the loss of our key employees, the failure to attract and retain other highly skilled employees, or the failure to adequately plan for succession may impair our ability to run and expand our business effectively.	Investing in our people is at the core of our strategy. We aim to find, keep and engage the highest calibre of employees and encourage their contribution and development. An environment that fosters innovation and collaboration is critical to Spirent's success as is ensuring our incentive plans are competitive. At a meeting of the Board in August 2012 we devoted a session to succession planning for senior posts in the Company and organisational structure. Appropriate career paths and internal recognition programmes are developed for both technical and non‑technical staff. Further information on our employees is provided in the CSR statement on pages 33 and 34.
Intellectual property
Spirent's success is dependent in part on proprietary technology which may be infringed by others inadvertently or otherwise. Protecting our proprietary technology is important to enabling us to compete successfully in our industry. Companies in the telecommunications industry often aggressively protect and pursue their intellectual property rights and may assert infringement claims against Spirent. Such claims can result in significant defence costs, and may affect Spirent's ability to market its products.	We have active intellectual property protection programmes in place to obtain appropriate intellectual property protection in a cost effective manner. There are procedures in the development of new products that include consideration of intellectual property rights of third parties. We also consult internal and external legal counsel experienced in intellectual property matters.
Acquisitions
A key element of our strategy is to evolve and expand our solutions portfolio which may be achieved either organically or through acquisition. Integration of acquisitions can be a complex process and the results expected from acquisitions may not be achieved due to problems encountered in integration, changes in the market conditions or sometimes deficiencies arising in the due diligence processes.	We carry out rigorous strategic and financial evaluations of all acquisition opportunities. Detailed financial and commercial due diligence are performed. The Board will only authorise transactions after all due diligence has been successfully completed and where the financial hurdles are within the agreed guidelines. Integration plans and processes are carefully considered prior to acquisition. The Board regularly reviews post‑acquisition performance.

 

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