Spirent Reports H1 645358

Adjusted earnings per share from continuing operations increased from 0.65 pence in 1H06 to 0.85 pence per share

August 9, 2007

2 Min Read

LONDON -- Spirent Communications plc (“Spirent” or “the Group”) (LSE: SPT), a leading communications technology company, today announces its interim results for the first half of 2007.

Highlights

  • Restructuring actions in the first half of 2007 on course to achieve £21.5 million of full year cost savings in 2008. Exceptional expenses lower than anticipated at £12.6 million of which £3.5 million are cash.

  • Adjusted earnings per share from continuing operations increased from 0.65 pence in the first half of 2006 to 0.85 pence per share in the first half of 2007 after absorbing negative foreign exchange impact equivalent to 0.22 pence per share.

  • Net cash inflow of £10.3 million in the first half, increasing cash to £106.9 million with no debt.

  • Results of Strategic Review to be communicated to shareholders in October 2007 will address portfolio and product development priorities, further cost reduction opportunities and optimisation of balance sheet structure.



Performance Analysis

  • Operating profit increased by 20 per cent at constant currency on slight sales decline compared with the same period in the prior year.

  • Legacy Broadband sales continued declining trend evidenced in 2006 offset by strong growth in Wireless and Positioning products and the new release of Spirent TestCenterTM.

  • Actions stemming from Operating Review in April expected to contribute to significant profit improvements in the second half of 2007.

  • In Broadband, revenue was up 9 per cent sequentially from the first quarter to the second quarter in the period, and up 14 per cent over the prior half year at the top 6 customers which account for a third of Broadband revenue.



Service Assurance

Service Assurance operating profit exceeded expectations as downsizing actions taken in 2006 more than offset an anticipated revenue decline.

Systems

Operating profit declined by 32 per cent in sterling terms, in line with expectations, entirely due to movement in exchange rates.

Edward Bramson, Chairman, commented:

“The major focus of Spirent’s attention in the first half of 2007 was on implementing the actions stemming from the Board’s Operating Review in April. These have proceeded well and we are on course to meet the cost objectives that were announced.

“The effects of the Operating Review on first half profits were minimal and so the first half is not a good indicator of future financial prospects. Our outlook for the second half is for flat to slight sequential growth in revenue in US dollars based on typical seasonal patterns. The cost reductions and the operating changes that have now been made should produce a significant improvement in second half profits.”

Spirent Communications plc

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