Spirent sees momentum rebound in second half despite profit decline

(Alliance News) - Spirent Communications PLC on Tuesday said momentum picked up in the second half of 2024 despite a challenging market environment, as it remains well-positioned for the year ahead.

The network testing and assurance provider reported a 40% drop in pretax profit to USD13.8 million for 2024, compared to USD 22.9 million in 2023.

Diluted earnings per share halved to USD2.22 from USD4.26 in 2023.

Revenue declined 3.0% to USD460.2 million from USD474.3 million, reflecting weaker demand in the first half, particularly in the telecommunications sector.

"We saw good growth in EMEA across the year, and some recovery in North America in the second half, offset by a reduction in China, due to ongoing economic challenges," Spirent said.

The company said adjusted operating profit rose 2.2% to USD46.2 million from USD45.2 million, driven by cost controls and product investment. Gross margin remained stable at 72%.

Chief Executive Officer Eric Updyke acknowledged the difficult market conditions but highlighted an improving outlook.

"Momentum picked up in the latter part of the financial year. Our continuing investment in product development has meant that we have been able to support our customers as they progress their 5G related roll out programmes.

"Good progress was made in customer diversification, and the recent launch of new products has started to achieve traction. We are well positioned for 2025, with a robust balance sheet, an innovative portfolio and a growing order book," CEO Updyke said.

The company's order book increased 6.3% to USD312.1 million, which Spirent said it provides " a solid base as we move into 2025."

Shares in Spirent were down 0.1% at 188.60 pence in London on Tuesday morning.

By Eva Castanedo, Alliance News reporter

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