Spirent Communications Plc (LON:SPT) have seen their shares spike, following an impressive annual update.
The analytics firm said that it had seen double digit increases in annual profit and revenue across the annual period – which seems to have caught shareholder attention.
The firm noted: “In 2019, Spirent delivered another year of robust revenue growth and a material increase in earnings and cash. The momentum of our high-speed Ethernet sales and the US government requirement for our GNSS positioning solutions remained strong.
We are focused on increasing visibility and decreasing cyclicality risks in our portfolio by expanding our services and software offerings. Order intake grew solidly as we secured more large, multi-year contracts, building orderbook for delivery in future years across all operating segments. Our investment in, and rollout of, our key account programme is delivering successfully and will expand in 2020”.
These increases were driven by higher product demand and a better win rate with US defense contractors, leading to a payout raise.
The firm said that pretax profit across 2019 was $89.6 million – this sees a 46% rise from $61.2 million in 2018.
Revenue surged 13% to $503.6 million from $476.9 million. This performance was driven by continued performance in high speed ethernet sales, with China particularly increasing demand.
Additionally, a higher win rate for Global Navigation Satellite System defense projects in the US led to the confident update today. The firm also saw its’ order numbers rise by 13% from $470 million to $532 million.
Spirent have remained confident to deliver consistent trading, despite issues ongoing with the coronavirus.
The group declared a final dividend of 3.45 cents per share, giving a total payout of 5.39 cents.
Eric Updyke, Chief Executive Officer, commented:
“As I complete my first year with Spirent, I’m delighted with the progress we have made and remain optimistic about our ability to seize opportunities and ensure we are well positioned for continued sustainable, profitable growth. We have a world class customer base that trusts us and respects our expertise. We have market-leading technology in which we continue to invest and innovate and our strong financial platform affords us great flexibility to evolve and grow our business.
“We have also further strengthened our leadership team during the year, adding more expertise and new energy to an already excellent talent base. This team will execute our strategy with a focus on three key pillars: Customer Centricity, Innovation for Growth and Operational Excellence.
“Overall, we are confident in our ability to continue to add value to each of our stakeholders, our customers, our investors and our people.”
Spirent expectations meet results
In January, the firm gave a confident update saying that it expects full year profits to exceed market expectations.
Spirent said that they were able to secure a number of important and significant contract wins in the final quarter of 2019, which drove revenue.
The firm said that 2019 total group revenue rose 5.5% compared to a year ago, with the figure totaling $503 million.
Spirent added that it has forecasted for adjusted operating profit to be between $91 million and $93 million – which would represent a rise of between 18% and 21% on the $77.1 million reported one year ago.
There was notable growth in its Network and Security Unit, as demand rose for 400G high speed ethernet test solutions.
The company alluded to strong order growth for its Lifecycle Service Assurance products in the final quarter, but this is expected to benefit 2020 and long term operations.
Its Connected Devices unit saw a “solid” operating profit outturn, despite some revenue reduction driven by increased 4G legacy decline.
The confidence has certainly paid off for Spirent, and shareholders should be thoroughly pleased with the annual results posted today.
Spirent Communications shares trade at 229p (+8.23%). 5/3/20 12:44BST.
