Q1 Trading Update

RNS Number : 1493M

Spirent Communications PLC

05 May 2015

 

SPIRENT COMMUNICATIONS PLC

First Quarter Trading Update

London, UK - 5 May 2015: 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 the date of this announcement ahead of its Annual General Meeting to be held at 1.00 pm today.  All figures relating to trading are for the period 1 January to 31 March 2015.

Trading to date

We indicated in February's preliminary results announcement that activity levels at the start of 2015 would be muted following a strong finish to 2014. We also said that it would be exacerbated by the timing of a $16 million shipment of hand-held test tools scheduled for the second half of 2015 compared to $12 million shipped in the first quarter of 2014.

Order intake in the first quarter was $99.4 million compared with $101.7 million for the first quarter of 2014. Growth in the Wireless & Service Experience and Service Assurance divisions was countered by a soft start to the period in Networks & Applications before we saw a sharp increase in demand in that division at the end of the quarter.

Regionally, strong order growth in North America of 7 per cent against the first quarter of 2014 was offset by weaker demand in APAC and EMEA, down 11 per cent and 9 per cent respectively, as customers in these regions were slow to release budgets.

Revenue for the period was $96.6 million compared with $111.9 million for the first quarter of 2014 as many orders were received too late in the quarter to be converted into revenue, demonstrated by a book to bill ratio of 103. The lower revenue resulted in an adjusted operating loss for the period of $3.6 million (first quarter 2014: adjusted operating profit $11.4 million).

Results

The results for the first quarter of 2015 are set out below:

$ million	1st quarter 2015	1st quarter 2014
Order intake	99.4	101.7
Revenue	96.6	111.9
Adjusted operating (loss)/profit1	(3.6)	11.4
Free cash flow2	12.5	2.9

Notes

1 Adjusted operating profit is before charging acquisition related costs, acquired intangible asset amortisation and share-based payment.

2 Operating cash flow after tax, net interest and net capital expenditure.

Cash position

In the first quarter of 2015 free cash inflow was $12.5 million (first quarter 2014: $2.9 million) which included the receipt of tax repayments of $4.0 million.  As expected, the increase in working capital in the fourth quarter of 2014 was released during the period.

Cash and cash equivalents closed at $109.6 million (31 December 2014: $99.8 million).

Outlook

Following the anticipated slow start to 2015, order activity is showing signs of gaining momentum. There are a number of major new solutions that will be delivered to the market in the second half of 2015 as we see the benefits of our investments come through and we expect to see an increased level of demand as the year unfolds.  The Board remains confident that further progress will be achieved broadly in line with its expectations during 2015 and that the Group will benefit from the continued investment it has made to create long term strategic value.

Board appointment

The Board is pleased to announce that Tom Lantzsch will be appointed as a non-executive director with effect from 11 May 2015 and will become a member of the Audit, Remuneration and Nomination Committees.

Tom is Executive Vice President Strategy at ARM Holdings and he has held a variety of senior leadership roles in technology industries over the last 30 years.

Commenting on Tom's appointment, Alex Walker, Chairman of Spirent, said

"We are delighted to have Tom joining the Spirent Board.  He has broad experience of our industry and his knowledge will be a substantial asset to the Board."

- ends -

We expect to announce our Half-year Results on Thursday 6 August 2015.

Enquiries

Eric Hutchinson, Chief Executive Officer		Spirent Communications plc		[phone]
Rachel Whiting, Chief Financial Officer
James Melville Ross/Emma Appleton		FTI Consulting		[phone]

Eric Hutchinson, Chief Executive Officer and Rachel Whiting, Chief Financial Officer,

will host a conference call for analysts and investors to discuss the Trading Update, commencing at 8.00 am UK time on Tuesday 5 May 2015.

Dial in details are as follows:

Conference ID 36498564

Participant UK Free - 08000 731340

Participant Std International - 01452 569393

Participant Free United States - 1 866 434 1089

Appointment of Tom Lantzsch: Director Declaration

The following information is disclosed in accordance with the UKLA Listing Rules, paragraph 9.6.13R (1) to 9.6.13R (6) and the UKLA Disclosure Rules, paragraph 3.1.4R:

Directorships of Publicly Quoted Companies held in the last 5 years:

None

Interests in Spirent securities (Ordinary shares of 3 & 1/3 pence each)

None

The Company confirms that there are no other matters requiring disclosure in relation to UKLA Listing Rule 9.6.13R.

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 http://corporate.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 http://www.otcmarkets.com/otc-pink/home.

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.

Cautionary statement regarding forward-looking statements

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.

 

END

 

 

TSTSSAEFLFISELI