Continued growth in demand for wireless testing provided a 6 per cent lift in revenues while last year’s £12.7m restructuring has allowed mobile and broadband testing group Spirent to finally return to the black.
Sales growth was fuelled by the core business performance analysis, which has seen order intake rise 29 per cent for its wireless testing technology. Management have assured that a 'substantial' order book has been maintained. However, sales in service assurance declined on the back of a general shift to next generation products. And with a drop in demand for legacy products, management have identified new opportunities as operators seek to expand bandwidth and network capabilities.
Restructuring efforts resulted in cost savings of £6.3m in the first half, with a further £1.2m of savings earmarked for the second half. On an annualised basis, cost savings from the programme are now estimated to come in 11 per cent higher at £31.6m. Management have committed to buy back £50m of shares in the second half, after a £32m buy-back earlier in the year. The dividend has also been reinstated.
Analysts at UBS Investment Research are expecting full-year EPS of 5.58p (2.97p in 2007), rising to 5.77p in 2009.
SPIRENT (SPT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 65p | MARKET VALUE: | £481m | |
| TOUCH: | 64.75-65p | 12-MONTH HIGH: | 76p | LOW:49p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 18p* | NET CASH: | £70.6m | |
| Six-months to 29 Jul 2008 | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 114 | -4.5 | -1.60 | nil |
| 2008 | 121 | 23.4 | 2.85 | 0.5 |
| % change | +6 | - | - | - |
Ex-div:13 Aug Payment:15 Oct *Includes intangible assets of £57.9m, or 8p a share | ||||
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