Telecoms market conditions turned on a sixpence in 2009 so, after a tough start, Spirent saw a massive uptick in order activity throughout the second half - culminating in a 17 per cent uplift in order intake in the fourth quarter.
That meant the ratio of orders to sales hit 129 per cent in the final three months of the year, as increased confidence amongst operators and equipment manufacturers saw infrastructure investment start to pick-up. "Our customers said to themselves: I've got to invest for the future because if I don't my business is at risk over the long-term", said chief executive Bill Burns. He expects further spending in 2010 as new data-intensive applications continue to gather momentum. Mr Burns also said that the increased complexity of networks and the need for ever-greater capacity to handle what he described as "the anytime, anywhere internet" was driving demand for its testing solutions.
Mr Burns added that Spirent was on the lookout for potential acquisitions to widen its addressable market but, if suitable targets couldn't be found, some of the ever-expanding cash pile could be returned to shareholders.
Broker RBS has upgraded this year's underlying pre-tax profit forecast by 15 per cent to £60.2m, giving EPS of 5.9p (from £55.4m and 8.7p in 2009, when EPS was lifted higher by a one-off tax benefit.)
SPIRENT COMMUNICATIONS (SPT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 112p | MARKET VALUE: | £ 761m | |
| TOUCH: | 112-113p | 12-MONTH HIGH: | 113p | LOW: 41p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 32p* | NET CASH: | £108m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 259 | -41.7 | -2.62 | nil |
| 2006 | 272 | -50.1 | 11.8 | nil |
| 2007 | 237 | 17.8 | 2.05 | nil |
| 2008 | 258 | 49.6 | 10.1 | 1.10 |
| 2009 | 272 | 54.1 | 8.71 | 1.21 |
| % change | +5 | +9 | -14 | +10 |
Ex-div:10 Mar Payment:06 May *Includes intangible assets of £69.8m or 10p a share | ||||
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