Spirent Provides UpdateSpirent Provides Update

Spirent plc reports first quarter revenues ahead of expectations; proposes name change to Spirent Communications plc

May 3, 2006

3 Min Read

LONDON -- Spirent plc (LSE: SPT; NYSE: SPM), a leading communications technology company, is holding its Annual General Meeting later today.

Highlights

  • First quarter revenues ahead of expectations in a very competitive market.

  • Additional £3 million investment in product development and sales and marketing.

  • Profit expectations unchanged for the year as a whole.

  • Share buy back of up to £50 million to commence shortly, subject to approval today.

  • Name change to Spirent Communications plc, subject to approval today.



At the meeting, John Weston, Chairman of Spirent will make the following remarks to shareholders on current trading and other matters:

Current Trading

"As initially indicated at the time of the Company's 2005 preliminary results issued on 23 February 2006, trading during the first quarter of the current financial year was characterised by continuing variable market conditions, albeit the quarter is typically Spirent's quietest.

However, I am pleased to report that first quarter revenues were ahead of our expectations as at the time of our preliminary results in what remains a very competitive market place.

Divisional performance was as follows:

  • Performance Analysis Broadband ("PAB") saw solid revenue growth driven by concerted development and sales and marketing activity. This additional investment will reduce PAB's expected first half trading profit by £3 million, however we do not expect this expenditure to be repeated in the second half. During the quarter there was also some competitive positioning on price with a consequent impact on margins.

  • Performance Analysis Wireless continued to show strong growth and good profitability.

  • We are pleased with the initial performance of the two businesses acquired at the start of the year, SwissQual and QuadTex, and integration is proceeding to plan. We anticipate them contributing positively to earnings as the year progresses.

  • Service Assurance showed growth in revenue over the corresponding period last year, trading close to breakeven.

  • Systems continued to perform profitably and in line with expectations.



As we indicated in February, 2006 is a year of product transition as the increased capability of our new products and solutions will enable us to gain market share. To date we have been encouraged by the performance of these new products, such as the Spirent TestCenter™, and by the response of our customers.

Overall, our profit expectations for the year as a whole are unchanged. We continue to anticipate that the Group's performance will show recovery over last year, although with a pronounced seasonal bias to the second half as benefits progressively accrue from our investment in the business and our recent acquisitions.

Spirent will issue its interim results on 10 August 2006.

Conclusion

Over the last eighteen months, we have transformed Spirent into a focused communications business with a significantly strengthened financial position. The recent acquisitions of SwissQual and QuadTex and the successful disposal of HellermannTyton were key events in this transformation.

The decision to focus on communications reflects our view that the sector offers Spirent the best top and bottom line growth opportunities in the mid and long term, leveraging our leading market positions in our key product segments.

To reflect the transformation of the Group, a proposal is being voted upon today to rename Spirent plc as Spirent Communications plc. In addition, we are in the process of establishing our operational headquarters in Sunnyvale, California, in the centre of Silicon Valley where we have the highest concentration of customers. Our corporate headquarters will remain in the UK.

Spirent has a broad portfolio of market-leading products addressing some of the fastest growing segments in the broadband and wireless markets. As a result we remain confident that Spirent is well positioned to take advantage of the many opportunities in its market place."

Spirent Communications plc

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