STRATEGIC REVIEW
Spirent Communications PLC
05 November 2007
SPIRENT COMMUNICATIONS PLC
STRATEGIC REVIEW
London, UK - 5 November 2007: Spirent Communications plc ("Spirent" or "the
Company") (LSE: SPT), a leading communications technology company, is announcing
today the results of the second phase of the Group Review.
As stated in the interim results announcement on 9 August 2007 the aims of the
Strategic Review were to address the Company's business portfolio and product
development priorities, as well as further cost containment opportunities and
the structure of the balance sheet.
Overview
The restructuring of the Company aims to target Spirent to areas of strategic
advantage in desirable market segments in order to deliver growth in excess of
the industry average. Incremental cost savings of £7.3 million have been
identified, principally to the benefit of 2008, bringing the total savings to
£28.3 million. These have been achieved with minimal effect on sales and
product development, as demonstrated by current trading and planned product
introductions for 2008, and at no increase in exceptional costs.
Business portfolio
• Focus on developing the core Performance Analysis business, operating
at 11 per cent return on sales.
• During the third quarter 2007, growth in Spirent TestCenter(TM)business
exceeded the decline in legacy business for the first time.
• Service Assurance operating at 11 per cent return on sales with a
stable outlook for 2008.
• Systems operating at 12 per cent return on sales in a stable long term
market.
Product development
• Build on the exceptional product breadth of our core business Performance
Analysis through greater engineering efficiency.
• Enhance development of Spirent TestCenter.
• Migrate to a higher software component in the business.
• Pursue integration synergies and wireless market opportunities.
Cost containment
• Further incremental savings of £7.3 million identified, equivalent to 0.
8 pence earnings per share.
• Incremental savings achieved with no increase in exceptional costs.
• Trading performance in the third quarter demonstrates that the cost
improvements have been achieved with minimal effect.
Balance sheet structure
• From 1 January 2007 to the end of September, £21 million has been
utilised for share repurchase.
• Targeting a total return through share repurchases of £65 million by
the next AGM.
• Strong cash generation for the nine months ended September 2007 - net
operating cash inflow of £26 million.
Corporate Governance
• Board composition is now compliant, as is each Board Committee.
Edward Bramson, Chairman, commented:
"The business has become more predictable and the strong cash flow performance
supports continued future financial flexibility. Planned product introductions
in desirable market segments offer encouraging prospects for Spirent to deliver
medium term growth."
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Enquiries
Edward Bramson, Executive Chairman Spirent Communications plc
+44 (0)1293 767676
Eric Hutchinson, Chief Financial Officer
Andrew Dowler/Harriet Keen Financial Dynamics
+44 (0)20 7831 3113
The Company will host a presentation today at 09.45am for 10.00am UK time at the
offices of
ABN Amro, 250 Bishopsgate, London, EC2M 4AA. A simultaneous webcast of the
presentation will be available on the Spirent Communications plc website at
www.spirent.com.
About Spirent Communications plc
Spirent Communications plc is a leading communications technology company
focused on delivering innovative systems and services to meet the needs of
customers worldwide. We are a global provider of performance analysis and
service assurance solutions that enable the development and deployment of
next-generation networking technologies such as broadband services, Internet
telephony, 3G wireless and web applications and security testing. The Systems
group develops power control systems for specialist electrical vehicles in the
mobility and industrial markets. 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 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
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.
This information is provided by RNS
The company news service from the London Stock Exchange