Spirent Communications tumbles after profit warning
Shares in Spirent Communications tumbled after the company warned that profits for the year will be materially below its expectations, as it posted a pre-tax loss for the first half.
FTSE All-Share
4,423.59
17:14 26/04/24
FTSE Small Cap
6,484.28
16:59 26/04/24
Spirent Communications
194.70p
16:35 26/04/24
Technology Hardware & Equipment
1,920.18
16:30 11/04/24
For the six months ended 30 June, the communications technology group reported a pre-tax loss of $2.3m compared with a profit of $13.9m in the first half of last year on the back of continued investment in the business.
Revenue fell to $218.7m from $221m and the company attributed the slowdown to many orders being received too late to convert to sales. The interim dividend was held flat at 1.68 cents per share.
The company said the second half should show growth compared to last year and revenues for the full year are expected to be in line with expectations. However, profits for the year will be materially below its expectations as despite low profitability in the first half, the group will continued to invest in new products and acquisitions “given the opportunities for growth in this time of unparalleled change.”
Chief executive officer Eric Hutchinson said: “It is promising to see momentum returning towards the end of the half, and growth in our order intake as a result of the strategic focus, investment and diligent efforts of our people.
“Multiple new technologies are being developed and key people in the industry are making critical decisions about where to make their future investments which Spirent can help them optimise. While this inevitably means volatility in the short term, particularly in the wireless business, the opportunities are significant for Spirent as we selectively invest in the right areas to address the complex challenges faced by those developing and deploying new technologies."
At 1158 BST, the company's shares were down 16.1% at 79.12p.