25th Feb 2016 08:52
LONDON (Alliance News) - Spirent Communications PLC on Thursday said its expectations for 2016 are unchanged, as it reported a fall in profit for 2015 due to the costs of investments in the business.
The company reported a pretax profit of USD9.6 million for 2015, more than halved from USD24.1 million a year before, despite a rise in revenue to USD477.1 million from USD457.2 million, mostly as a result of higher product development and selling and distribution costs.
Spirent attributed the rise in costs to the full year effect of acquisitions it made in 2014, as well as investments it has made in sales and marketing to support its new product releases and expand its customer base.
The company said that, as it had previously flagged, market changes in the wireless device testing space are expected to ripple into 2016, which it expects to lead to a USD14.0 million reduction in revenue for this part of its business. However, other parts of its business are expected to grow to offset this.
The communications software, hardware and testing services company proposed an unchanged total dividend of 3.89 cents for 2015.
"The markets Spirent serves are going through a period of rapid change and unpredictability. We are responding to the changing demands both in terms of technologies and in adapting to the new priorities for test, measurement and validation requirements by existing customers and new customers. This is being done through targeted product development and marketing initiatives while managing our cost base to protect profitability. We are confident that we are set on the right course and are making real progress in a number of key areas," said Chief Executive Officer Eric Hutchinson in a statement.
Separately the company outlined a change to its operating segments from the start of 2016, combining its Service Experience business with its Service Assurance business. Its Wireless & Service Experience segment will be named Wireless & Positioning, and its enlarged Service Assurance segment will continue to be named as such.
Shares in Spirent Communications were up 4.6% at 79.00 pence Thursday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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