Spirent TestCenter sales grew from £4M to £20M; older platforms, SmartBits and AX, orders declined by £27M to £48M
March 1, 2007
LONDON -- Spirent Communications plc ("Spirent" or "theGroup")(LSE: SPT; NYSE: SPM), a leading communications technology company, todayannounces its preliminary results for its financial year ended 31 December2006.
Highlights
Much improved performance for the second half year.
Markets were highly competitive partly as a result of consolidation amongst our largest customers.
Restructuring actions taken during the year with total annualised cost savings of £16 million at a total cost of £9.1 million.
24 per cent of orders for Communications group in the final quarter of 2006 came from new product platforms.
Performance Analysis
Overall performance reflects continued product transition:
Spirent TestCenter(TM) sales grew to £20 million (2005: £4million).
Existing older platforms, SmartBits and AX, orders declined by £27 million, 15 per cent of total Performance Analysis activity, to £48 million (2005: £75 million).
All other Broadband products and services grew.
Wireless continued to make good overall progress.
Service Assurance
Signed our first major contract with TELUS, a leading provider of data, IP and wireless solutions in Canada, to provide triple play service assurance solutions.
Financial
Four acquisitions made for a total initial consideration of £39.7 million.
Goodwill impairment of £46.8 million in relation to Service Assurance and SwissQual.
Net funds at the year end of £106.1 million with £41.9 million returned to shareholders to date at an average price of 46.1 pence per share.
Board and management
New leadership at both Board level and in key operational positions: in-depth business review underway.
Anders Gustafsson, Chief Executive, commented:
"In 2006 Spirent delivered a much improved second half performancebenefitingfrom growth in new product revenues and the restructuring actionsundertaken.
"With new Board leadership and having made key operational appointments wearenow undertaking an in-depth business review, the outcome of which will bereported before the AGM in May.
"Our performance in 2007 is expected to benefit from the investment in newandupgraded products and the acquisitions made last year and further progressbeyond that will depend on the outcome of the business review. We areconfidentthat our new products, led by Spirent TestCenter, will grow revenue andcontinueto gain market share although this will be offset by the decreasing revenuefromour older products. With market conditions continuing to be similar to lastyear, we consequently expect only a modest growth in Performance Analysisrevenues. In addition, should sterling continue its recent strength relativetothe US dollar, our performance for 2007, particularly in Systems, will beheldback."
Results
The adjusted profit and earnings per share measures have been restated toinclude share-based payment of £5.2 million (2005: £5.1 million) andintangibleamortisation of £1.6 million (2005: nil).
Spirent Communications plc
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