Spirent PLC
9 May 2001
SPIRENT AGM
CHAIRMAN'S STATEMENT
Spirent enjoyed a strong first quarter for 2001. Overall turnover increased
by 69 per cent and operating profit before goodwill amortisation and
exceptional items increased by 125 per cent. Underlying organic growth rates
were 24 per cent and 25 per cent respectively.
Following the strategic acquisitions made last year, Spirent Communications
now comprises two divisions serving different end users, namely the network
equipment manufacturers and telecommunications service providers.
In the last few weeks, we have seen the slowdown in activity in the
telecommunications industry affect the Test Equipment division of Spirent
Communications. The visibility in this business has always been short, with
order lead times of two to three weeks. The slowdown is a result of our
customers, based in North America, curtailing the purchase of test equipment
as part of an overall cutback in spending. We have seen strong demand in
Europe and Asia.
There is clear evidence, through industry awards and interest in our products,
that our product strategy is right and that we are well positioned to take
advantage of the upturn in demand when it arises.
Our customers' product development engineers continue to specify our
equipment, which is manifested in record levels of quotations, but the
engineers are being financially restrained in placing orders. As a result, the
performance in the second quarter of our telecom test equipment division is
likely to be significantly lower than last year.
Our Network Monitoring division of Spirent Communications performed very well
in the first quarter and is continuing to do so. We invested through
acquisition last year to develop our position in the fast growing service
assurance market. This business has longer visibility through contracts which
extend from six to 12 months. Our key customers, the ILECs, continue to deploy
our solutions to meet the increasing demand for high speed broadband data
services. Qwest's recent selection of Spirent Communications for its DSL
service assurance and the ongoing deployment of our solutions by SBC and
Verizon exemplify this.
We expect the performance of this division to remain strong as our customers
continue to realise the benefits generated through investment in service
assurance solutions. Our systems allow our customers to deploy and manage
these new complex data services cost effectively.
Our Network Products group and Sensing group have been impacted by the North
American economic slowdown. This has been partially offset by an improvement
in the operating profit performance of the Systems group.
We continue to increase our investment in new product development, marketing
and sales activities, particularly in Europe and Asia, as we believe that
these investments will add considerably to the value of our business in the
future.
The company disclaims any intention or obligation to revise or update any
forward-looking statements contained in this press release, regardless of
whether those statements may be affected as a result of new information,
future events or otherwise.
Enquiries:
Nicholas Brookes, Chief Executive Spirent plc +44 (0)1293 767676
Eric Hutchinson, Finance Director
Jon Coles/Rupert Young Brunswick (London) +44 (0)20 7404 5959
Sara Strong/Nina Pawlak Brunswick (New York) +1 212 333 3810
Background note:
Spirent plc is an international network technology company providing state-of-
the-art solutions with a focus on high growth, high margin activities. Our
Communications group unites leading edge performance analysis technology with
network operations expertise, enabling customers to accelerate the
development, deployment and assurance of next generation network equipment and
services worldwide. www.spirent.com
Spirent is quoted on the London Stock Exchange, ticker SPT. The Company
operates a Level 1 American Depository Receipt programme (ticker: SPNUY; CUSIP
number: 84856M100). For information, contact Brian Heston, The Bank of New
York, American Depositary Receipts, 101 Barclay St, 22 West, New York, NY
10286 Phone: (212) 815 3938, Fax: (212) 571 3050, email: bheston@bankofny.com
www.adrbny.com
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