TIDMSPT
RNS Number : 9615B
Spirent Communications PLC
05 November 2009
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SPIRENT COMMUNICATIONS PLC
INTERIM MANAGEMENT STATEMENT (UNAUDITED)
London, UK - 5 November 2009: Spirent Communications plc ("Spirent", the
"Company" or the "Group") (LSE: SPT), a leading communications technology
company, announces the following unaudited Interim Management Statement for the
period since 28 June 2009.
Trading to date
Trading performance for the period since 28 June 2009 to date is in line with
the Board's expectations.
Bill Burns, Chief Executive Officer, commented:
"During the third quarter we have seen a return to market stability and we have
increased profitability. The outlook for the fourth quarter is positive. We
continue to deliver new, innovative, market leading test solutions and as a
result Spirent is well placed to capitalise on any recovery in end markets in
2010."
Third Quarter 2009
The results for the third quarter of 2009 are set out below:
+----------------------------------+--------------------+--------------------+
| GBP million | 3rd quarter 2009 | 3rd quarter 2008 |
+----------------------------------+--------------------+--------------------+
| | | |
+----------------------------------+--------------------+--------------------+
| Revenue | 63.1 | 64.8 |
+----------------------------------+--------------------+--------------------+
| Operating profit | 13.6 | 11.7 |
+----------------------------------+--------------------+--------------------+
| Basic earnings per share - pence | 1.69 | 1.53 |
+----------------------------------+--------------------+--------------------+
| | | |
+----------------------------------+--------------------+--------------------+
| | | |
+----------------------------------+--------------------+--------------------+
Note
Earnings include a charge of 0.05 pence per share for share-based payment and
amortisation of intangible assets (3rd quarter 2008: 0.07 pence).
Third quarter revenue of GBP63.1 million was in line with our revenue
projections. Group operating profit grew by GBP1.9 million to GBP13.6
million, as a result return on sales for the Group increased to 22 per cent
compared to 18 per cent in the third quarter of 2008. Earnings per share grew
by 10 per cent.Year to date revenue is up 9 per cent in sterling terms to
GBP202.2 million, down by 12 per cent in constant currencies. Operating profit
increased by 15 per cent in sterling to GBP37.6 million, down by 13 per cent in
constant currencies.
Performance Analysis
Year to date return on sales for Performance Analysis has increased to 23 per
cent compared to 22 per cent, on a revenue decrease of 13 per cent in dollar
terms.More importantly, we have now experienced three consecutive quarters of
increased order intake and the book to bill ratio at 1.00 times for the
quarter allowed us to maintain a solid order book.
Stability returned to the market in the third quarter, with signs of a somewhat
more optimistic view by customers. Customers increased their spending on
applications and data center test capabilities, whilst investment in mobile
packet core test grew markedly. Wireless device performance test benefited from
the growth in development of new wireless data devices such as Smartphones. The
market for 4G wireless ("LTE") testing is beginning to accelerate; this has also
stimulated investment in existing technologies, such as CDMA and UMTS, with the
development of new data devices capable of supporting all these technologies.
This is positive for future expansion in the wireless test market, in which
Spirent is well placed with its wide range of product solutions.
Product mix was favourable in the quarter resulting in an increased gross profit
margin, whilst overheads reduced compared to the prior year.
Service Assurance
Profitability for the third quarter of 2009 increased to a 20 per cent operating
return on sales compared to 10 per cent for the third quarter of 2008. Gross
profit margin has improved and overheads have been reduced. There is strong
demand for 10 GbE in network monitoring devices, increasing demand for
monitoring in wireless backhaul networks and interest in the latest generation
of hand held test equipment. Whilst legacy revenues are down year-on-year,
masking growth in new products and services, the fundamental direction for the
division is sound.
Systems
Profitability has been maintained in difficult market conditions. This is
especially true in the market for motor controllers for use in industrial
equipment, where there are signs that the industrial business is starting to
recover.
Cash
Free cash flow for the quarter was GBP12.2 million (3rd quarter 2008: GBP9.3
million). In the quarter the 2009 interim dividend of GBP3.7 million was paid
and there was an inflow of GBP1.3 million from the exercise of share
incentives. The closing cash position at the end of the third quarter was
GBP91.3 million compared with GBP80.5 million at the end of the first half of
2009.
Outlook
Markets appear to have stabilised during the third quarter which will allow
Spirent to continue to deliver on expected performance. The prospects for the
fourth quarter are good, especially in wireless device performance test.
- ends -
Enquiries
+---------------------------------+--+------------------------+--+------------------+
| Bill Burns, Chief Executive | | Spirent Communications | | +44 |
| Officer | | plc | | (0)1293 |
| | | | | 767676 |
+---------------------------------+--+------------------------+--+------------------+
| Eric Hutchinson, Chief | | | | |
| Financial Officer | | | | |
+---------------------------------+--+------------------------+--+------------------+
| | | | | |
+---------------------------------+--+------------------------+--+------------------+
| Andrew Dowler/Juliet Clarke | | Financial | | +44 |
| | | Dynamics | | (0)20 |
| | | | | 7831 |
| | | | | 3113 |
+---------------------------------+--+------------------------+--+------------------+
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 testing and service assurance
solutions that enable the development and deployment of next-generation
networking technologies such as Ethernet, Triple Play, wireless, satellite
positioning, web applications and security. The Systems group develops power
control systems for 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 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.
Condensed consolidated income statement (unaudited)
Period ended 27 September 2009
+------------------------------------------+-------------+------------+------------+------------+
| | Period to 27 September | Period to 28 September |
| | 2009 | 2008 |
+------------------------------------------+--------------------------+-------------------------+
| GBP million | 3rd quarter | Year to | 3rd | Year to |
| | | date | quarter | date |
+------------------------------------------+-------------+------------+------------+------------+
| | | | | |
+------------------------------------------+-------------+------------+------------+------------+
| Revenue | 63.1 | 202.2 | 64.8 | 185.3 |
+------------------------------------------+-------------+------------+------------+------------+
| Cost of sales | (19.7) | (68.1) | (24.1) | (68.1) |
+------------------------------------------+-------------+------------+------------+------------+
| | | | | |
+------------------------------------------+-------------+------------+------------+------------+
| | | | | |
+------------------------------------------+-------------+------------+------------+------------+
| Gross profit | 43.4 | 134.1 | 40.7 | 117.2 |
+------------------------------------------+-------------+------------+------------+------------+
| Product development | (11.0) | (36.1) | (10.9) | (32.3) |
+------------------------------------------+-------------+------------+------------+------------+
| Selling and distribution | (11.5) | (36.9) | (10.9) | (32.9) |
+------------------------------------------+-------------+------------+------------+------------+
| Administration | (7.3) | (23.5) | (7.2) | (19.3) |
+------------------------------------------+-------------+------------+------------+------------+
| | | | | |
+------------------------------------------+-------------+------------+------------+------------+
| | | | | |
+------------------------------------------+-------------+------------+------------+------------+
| Operating profit | 13.6 | 37.6 | 11.7 | 32.7 |
+------------------------------------------+-------------+------------+------------+------------+
| Net finance (expense)/income | (0.2) | (0.6) | 0.9 | 2.5 |
+------------------------------------------+-------------+------------+------------+------------+
| Exceptional finance income | - | - | - | 0.8 |
+------------------------------------------+-------------+------------+------------+------------+
| | | | | |
+------------------------------------------+-------------+------------+------------+------------+
| | | | | |
+------------------------------------------+-------------+------------+------------+------------+
| Profit before tax | 13.4 | 37.0 | 12.6 | 36.0 |
+------------------------------------------+-------------+------------+------------+------------+
| Tax | (2.1) | (5.7) | (1.3) | (3.1) |
+------------------------------------------+-------------+------------+------------+------------+
| | | | | |
+------------------------------------------+-------------+------------+------------+------------+
| | | | | |
+------------------------------------------+-------------+------------+------------+------------+
| Profit for the period | 11.3 | 31.3 | 11.3 | 32.9 |
| attributable to equity | | | | |
| shareholders of parent Company | | | | |
+------------------------------------------+-------------+------------+------------+------------+
| | | | | |
+------------------------------------------+-------------+------------+------------+------------+
| | | | | |
+------------------------------------------+-------------+------------+------------+------------+
| Earnings per share (pence) | | | | |
+------------------------------------------+-------------+------------+------------+------------+
| Basic | 1.69 | 4.70 | 1.53 | 4.38 |
+------------------------------------------+-------------+------------+------------+------------+
| Diluted | 1.68 | 4.68 | 1.52 | 4.34 |
+------------------------------------------+-------------+------------+------------+------------+
| | | | | |
+------------------------------------------+-------------+------------+------------+------------+
| | | | | |
+------------------------------------------+-------------+------------+------------+------------+
+-------------------------------------------+-------------+------------+-------------+------------+
| Segmental analysis | Period to 27 September | Period to 28 September |
| | 2009 | 2008 |
+-------------------------------------------+--------------------------+--------------------------+
| GBP million | 3rd quarter | Year to | 3rd quarter | Year to |
| | | date | | date |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| Revenue | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| Performance Analysis | 46.5 | 149.0 | 47.4 | 135.5 |
+-------------------------------------------+-------------+------------+-------------+------------+
| Service Assurance | 7.5 | 25.8 | 9.0 | 24.8 |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| Communications | 54.0 | 174.8 | 56.4 | 160.3 |
+-------------------------------------------+-------------+------------+-------------+------------+
| Systems | 9.1 | 27.4 | 8.4 | 25.0 |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | 63.1 | 202.2 | 64.8 | 185.3 |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| Operating profit | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| Performance Analysis | 11.9 | 33.8 | 11.1 | 30.3 |
+-------------------------------------------+-------------+------------+-------------+------------+
| Service Assurance | 1.5 | 4.1 | 0.9 | 3.4 |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| Communications | 13.4 | 37.9 | 12.0 | 33.7 |
+-------------------------------------------+-------------+------------+-------------+------------+
| Systems | 1.1 | 3.2 | 1.0 | 3.1 |
+-------------------------------------------+-------------+------------+-------------+------------+
| Corporate | (0.6) | (2.4) | (0.8) | (2.4) |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| Total reportable segment profit | 13.9 | 38.7 | 12.2 | 34.4 |
+-------------------------------------------+-------------+------------+-------------+------------+
| Unallocated amounts | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| Intangible amortisation | (0.2) | (0.7) | (0.2) | (0.5) |
+-------------------------------------------+-------------+------------+-------------+------------+
| Share-based payment | (0.1) | (0.4) | (0.3) | (1.2) |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| Operating profit | 13.6 | 37.6 | 11.7 | 32.7 |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| Other information | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| GBP million | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| Depreciation | 2.0 | 6.8 | 1.9 | 6.4 |
+-------------------------------------------+-------------+------------+-------------+------------+
| Capital expenditure | 1.6 | 4.8 | 2.0 | 5.4 |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| Earnings per share | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| Basic (pence) | 1.69 | 4.70 | 1.53 | 4.38 |
+-------------------------------------------+-------------+------------+-------------+------------+
| Diluted (pence) | 1.68 | 4.68 | 1.52 | 4.34 |
+-------------------------------------------+-------------+------------+-------------+------------+
| Adjusted basic (pence) | 1.69 | 4.70 | 1.53 | 4.20 |
+-------------------------------------------+-------------+------------+-------------+------------+
| Adjusted diluted (pence) | 1.68 | 4.68 | 1.52 | 4.16 |
+-------------------------------------------+-------------+------------+-------------+------------+
| Weighted average number of shares | | | | |
| in issue at period end | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| basic (million) | | 665.3 | | 750.0 |
+-------------------------------------------+-------------+------------+-------------+------------+
| diluted (million) | | 668.4 | | 756.6 |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| GBP million | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| Adjusted earnings | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| Profit after tax | 11.3 | 31.3 | 11.3 | 32.9 |
+-------------------------------------------+-------------+------------+-------------+------------+
| Exceptional finance income | - | - | - | (0.8) |
+-------------------------------------------+-------------+------------+-------------+------------+
| Prior year tax credit | - | - | - | (0.6) |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | 11.3 | 31.3 | 11.3 | 31.5 |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| Average exchange rate against sterling | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| US dollar | | 1.54 | | 1.95 |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
| | | | | |
+-------------------------------------------+-------------+------------+-------------+------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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