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Spirent Reports Q1 Interim Financials

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4/23/2014
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LONDON -- Spirent Communications plc ("Spirent", the "Company" or the "Group") (LSE: SPT), a leading communications technology company, announces the following unaudited Interim Management Statement covering the period from 1 January to 22 April 2014. All figures relating to trading are for the period 1 January to 31 March 2014.

Trading to date
Order intake in the first quarter of 2014 grew by 12% compared to the first quarter of 2013, with organic growth at 9%. Revenue for the period at $111.9 million showed a 16% increase, organically up 14%. This included revenue of $12.0 million within Service Assurance delayed from 2013 which distorted the Group's book to bill ratio reported as 91, the underlying ratio being 102. The investments set out in the full year results for 2013 are well under way. Further momentum is expected during the second quarter of 2014.

Highlights - first quarter 2014

Financial

  • Group revenue increased by 16% to $111.9 million (first quarter 2013: $96.8 million). Acquisitions completed during the first quarter of 2014 contributed $1.1 million.
  • Service Assurance revenue rose $13.2 million driven by revenue recognised of $12.0 million from field test orders delayed from 2013.
  • Order intake up 12% compared to the first quarter of 2013 with an improving trend in all segments; book to bill ratio at 91 for the Group was distorted by Service Assurance; underlying book to bill ratio of 102 (first quarter 2013: 94).
  • Adjusted operating profit increased to $11.4 million (first quarter 2013: $10.5 million) after additional investment in product development and sales and marketing of $6.8 million.
  • Free cash inflow of $2.9 million (first quarter 2013: $7.9 million) as working capital was absorbed to fund revenue growth.
  • Closing cash was $163.6 million at 31 March 2014 (31 December 2013: $216.2 million) after an outflow on two acquisitions of $39.2 million and $16.4 million for share repurchases.

    Operational
    With an expanding portfolio of innovative solutions, Spirent continues to focus on addressing the needs of its customers:

  • Huawei selected Spirent TestCenterTM to validate the performance of its latest CloudEngine data center switch in a test of massive scale;
  • Introduced SimSAFE, a test bed that enables evaluation of Global Navigation Satellite System ("GNSS") receiver resilience and aids the development of counter-measures;
  • Quantum was launched, an automated user experience analytics system for measuring and driving improvements to the battery life of mobile devices under a wide range of consumer usage scenarios;
  • Spirent made further contributions to advancing ultra-high bandwidth networking with release of a new high density 100G test solution supporting the latest-generation CFP4 optical transceiver interface;
  • China Mobile's research division, China Mobile Research Institute, selected Spirent Landslide to verify the performance of its 4G/3G evolved packet core network; and
  • Announced Spirent Velocity, the first open-framework, cloud-based test platform for rapid development and validation of software-defined networking and network functions virtualization technologies and deployments.

    Eric Hutchinson, Chief Executive Officer, commented: "Spirent has made significant progress at the start of 2014. The new company structure is established and new executives have been appointed to strengthen the management teams. Advances have been made in the development of new products and solutions and in driving our strategy at all levels. Market conditions have improved in all regions compared to 2013."

    Outlook
    Trading is currently in line with the Board's expectations of achieving high single digit organic revenue growth for the year, as set out at the time of the Preliminary Results and we are encouraged by the progress we are making towards the achievement of our planned goals in 2014.

    Spirent Communications plc (NYSE: SPM; London: SPT)

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