Interim Management Statement

RNS Number : 7866R

Spirent Communications PLC

07 May 2009

 



SPIRENT COMMUNICATIONS PLC

INTERIM MANAGEMENT STATEMENT (UNAUDITED)

London, UK - 7 May 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 31 December 2008.

Trading performance for the period since 31 December 2008 is slightly ahead of the Board's expectations.

The results for the first quarter of 2009 are set out below:

Results summary

£ million	1st quarter 2009	1st quarter 2008
Revenue	71.6	59.0
Operating profit	11.5	9.6
Earnings per share (basic) - pence	1.43	1.22

Earnings include a charge of 0.05 pence per share for share-based payment and amortisation of intangible assets (first quarter 2008: 0.08 pence). Cost reduction actions in the first quarter of 2009 will result in £8.5 million of annualised savings, the cost of which, £0.8 million, has been expensed in the period.

Performance Analysis

Revenue for the division in the first quarter of 2009 was £53.0 million compared with 

£43.2 million in the first quarter of 2008 and operating profit was £10.0 million compared with 

£7.9 million.  Revenue expressed in US dollars, was $76.3 million in the first quarter of 2009 compared with $85.5 million for the first quarter of 2008. It is currently anticipated that revenues for the second quarter will increase sequentially due to seasonal factors, but that they will decrease year-on-year in US dollars as occurred in the first quarter.

Service Assurance and Systems

Revenues and profits were in line with our expectations.

 Cash

Free cash flow1 for the first quarter of 2009 was £17.4 million (first quarter 2008: £1.3 million). This resulted in an increase in the net cash position to £77.1 million at 29 March 2009 from 

£59.7 million at 31 December 2008.  There were no share repurchases in the period.

Outlook

Whilst market conditions remain uncertain, we anticipate that the Company's performance for the remainder of the year will continue to be in line with our expectations.

Bill Burns, Chief Executive, commented:

"Market conditions were generally as expected.  A favourable US dollar:sterling exchange rate, improved margins resulting from a favourable mix of new products, and continuing expense control offset the impact of lower revenues in US dollar terms on operating profit.

"We are pleased at the level of profits reported in our seasonally weakest quarter.  Our new product introductions for wireless and broadband test solutions will position Spirent well to serve the needs of our markets for the rest of this year and beyond."

Note

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

- ends -

Enquiries

William Burns, Chief Executive Officer		Spirent Communications plc		[phone]
Eric Hutchinson, Chief Financial Officer
Andrew Dowler/Juliet Clarke		Financial Dynamics		[phone]

The Company's AGM is being held today at 10.30am UK time at the offices of the Company's PR Advisers, Financial Dynamics, Holborn Gate, 26 Southampton Buildings, London, WC2A 1PB.

  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.

  Consolidated income statement (unaudited)

Quarter ended 29 March 2009

	1st quarter 2009 £ million	1st quarter 2008 £ million
Revenue	71.6	59.0
Cost of sales	(24.0)	(21.5)
Gross profit	47.6	37.5
Product development	(13.3)	(10.5)
Selling and distribution	(13.6)	(10.9)
Administration	(9.2)	(6.5)
Operating profit	11.5	9.6
Net finance (expense)/income	(0.3)	0.9
Profit before tax	11.2	10.5
Tax	(1.7)	(1.1)
Profit for the period attributable to equity shareholders of parent Company	9.5	9.4
Earnings per share (pence)
Basic and diluted	1.43	1.22

Segmental analysis

	1st quarter 2009 £ million	1st quarter 2008 £ million
Revenue
Performance Analysis	53.0	43.2
Service Assurance	9.9	8.3
Communications	62.9	51.5
Systems	8.7	7.5
	71.6	59.0
Operating profit
Performance Analysis	10.0	7.9
Service Assurance	1.4	1.7
Communications	11.4	9.6
Systems	1.0	0.7
Non-segmental	(0.9)	(0.7)
	11.5	9.6

Other information
Depreciation	2.5	2.2
Capital expenditure	1.0	1.9
Share-based payment	0.1	0.4
Intangible amortisation	0.2	0.2

Earnings per share
Basic and diluted (pence)	1.43	1.22
Weighted average number of shares in issue at period end - basic (million)	664.1	768.7
Weighted average number of shares in issue at period end - diluted (million)	665.9	770.2

Average exchange rate against sterling
US dollar	1.44	1.98

 

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