Slowing sales growth, mounting competition and consolidation in the smartphone industry weighed on Spirent (SPT) in 2015, driving adjusted operating profits down 8 per cent to $42.1m (£30.1m). But the device and network testing group saved face as new products, advertising and forays into growth markets lifted revenues.
Strong demand for high-speed ethernet testing fuelled a 9 per cent rise in sales in the main networks and applications segment. But tepid trading in the wireless business meant adjusted operating profits tumbled by more than a third there, even as management outsourced engineering services and cut other costs. Earnings also plunged in the smaller service assurance business, despite a large contribution from past acquisitions.
Management rolled out 23 new products and solutions across the business, including a new 'big data' analytics platform. Combined with a 12 per cent rise in sales and marketing spend, that attracted nearly 500 new customers and drove orders up 3 per cent.
Broker N+1 Singer expects EPS of 6.6¢, up from 5¢ in 2015.
| SPIRENT (SPT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 80p | MARKET VALUE: | £489m | |
| TOUCH: | 79.8-80p | 12-MONTH HIGH: | 99p | LOW: 64p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 51 | |
| NET ASSET VALUE: | 67¢* | NET CASH: | $99.4m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 471 | 114 | 13.2 | 2.93 |
| 2012 | 472 | 108 | 12.1 | 3.22 |
| 2013 | 414 | 39 | 5.1 | 3.54 |
| 2014 | 457 | 24 | 3.4 | 3.89 |
| 2015 | 477 | 10 | 2.2 | 3.89 |
| % change | +4 | -60 | -35 | - |
Ex-div: 3 Mar Payment: 6 May *Includes intangible assets of $252m, or 41¢ a share £1=$1.40 | ||||
