Spirent Communications unveils flat 2012 revenues

Spirent Communications shares plunged Thursday after the company reported flat 2012 revenues and a fall in pre-tax profits.

Spirent Communications shares plunged Thursday after the company reported flat 2012 revenues and a fall in pre-tax profits.

The UK-based telecommunications company posted revenues of $472.4m for the year, compared to $470.5m in 2011, as a result of a 29% drop in service assurance.

Profits before tax fell 3.0% year-on-year to $110.7m while basic earnings per share fell 5.0% to $0.12.

The book-to-bill ratio, a measure of a companys order backlog, fell from 103 to 97 reflecting the weak macro-economic environment, particularly in the second half of the year.

Nevertheless, the company increased its dividend by 10%, proposing a final dividend of $0.02 per ordinary share which brought the full-year dividend up to $0.03.

The group ended the year with a strong free-cash-flow of $84m, up from $69.3 in the year before.

"The impact of macro-economic conditions on our served markets, particularly in the second half of the year, led to flat revenues and profit performance in 2012," remarked Chief Executive Officer Bill Burns.

"Despite this, Spirent continued to deliver a financial return that remains one of the best amongst its peers. This was achieved during a year of significant change for Spirent, when we transitioned our wireless revenues from legacy technologies to 4G, invested in two important acquisitions, restructured our Service Assurance business and disposed of the Systems division."

During the period, Spirent acquired cyber security provider Mu and Metrico, a mobile device and wireless service company.

Looking ahead, the Spirent expects to see revenue growth from the acquired businesses and macro demand in the group's major regions including Europe, the US and Asia Pacific.

Shares fell 4.40% to 158.50p at 09:47 Thursday.

RD

Recommended

How to profit from India’s high-tech recovery
Share tips

How to profit from India’s high-tech recovery

Professional investor David Cornell of the India Capital Growth Fund, selects three of his favourite Indian stocks to buy now.
27 Sep 2021
Share tips of the week – 24 September
Share tips

Share tips of the week – 24 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
24 Sep 2021
Three strong Asian stocks trading at bargain prices
Share tips

Three strong Asian stocks trading at bargain prices

Professional investor Nitin Bajaj of the Fidelity Asian Values investment trust picks three stocks that dominate their industries, earn good returns o…
20 Sep 2021
Why it pays to face up to your investment mistakes
Investment strategy

Why it pays to face up to your investment mistakes

Buying stocks can be a complicated business. But selling stocks can be tricky, too – even if you sell for the right reasons. Max King explains how to …
17 Sep 2021

Most Popular

A nightmare 1970s scenario for investors is edging closer
Investment strategy

A nightmare 1970s scenario for investors is edging closer

Inflation need not be a worry unless it is driven by labour market shortages. Unfortunately, writes macroeconomist Philip Pilkington, that’s exactly w…
17 Sep 2021
Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
What really causes inflation? Here’s what prices since 1970 tell us
Inflation

What really causes inflation? Here’s what prices since 1970 tell us

As UK inflation hits 3.2%, Dominic Frisby compares the cost of living 50 years ago with that of today, and explains how debt drives prices higher.
15 Sep 2021