Spirent Communications Pays Extra Dividend On Top Of Regular Return

8th Mar 2018 09:59

LONDON (Alliance News) - Shares in communications technology Spirent Communications PLC were up on Thursday after the company declared a special dividend on top of its regular payout, as profit increased despite a slight drop in revenue.

The stock was trading at 119.20 pence per share on Thursday morning, up 9.6%.

Spirent is paying a 5.00 US cents special payout for 2017, having not paid one the year before. The final dividend is 2.40 cents, taking the year's total to 4.08 cents compared to 3.89 cents in 2016.

Adjusted pretax profit increased to USD59.2 million in 2017 from USD44.2 million in 2017, and on a reported basis the company swung to a USD46.6 million pretax profit after a USD46.0 million loss in 2016

Spirent's 2017 revenue came in at USD454.8 million, slightly down from 2016's USD457.9 million. Free cash flow was significantly improved at USD56.4 million, compared to USD25.9 million in 2016.

Overall group trading was boosted by a strong performance from the Lifecycle Service Assurance division and a turnaround in profitability from Connected Devices.

In the third division, Networks & Security, the Positioning and Application Security businesses did well, but this was offset slightly by softer demand for high-speed Ethernet testing, as previously noted by Spirent.

Lifecycle Service Assurance 2017 revenue rose to USD109.2 million from USD99.2 million, while Connected Devices fell to USD84.6 million from USD96.5 million and Networks & Security to USD261.0 million from USD262.2 million.

However, Connected Devices swung to an operating profit of USD5.2 million after a loss of USD4.4 million in 2016. Lifecycle Service Assurance operating profit for 2017 was up to USD17.9 million from USD11.2 million, though Networks & Security profit fell to USD43.9 million from USD47.2 million.

Looking forward, Spirent said it expects 2018 results to be more heavily weighted to the second half than usual, due to an expected rebound in Ethernet testing and second half weighting of spending in the Lifecycle Service Assurance division.

Chief Executive Eric Hutchinson said: "In 2017 we established a firm basis to realise Spirent's full potential delivering strong growth in earnings and in cash generation as we did so. We have taken our expertise in network assurance to deploy innovative new systems, winning new business with well-established and new customers. In doing so, we gained market share with the early adopters in the industry, which should serve Spirent well in 2018 and the long-term.

"Exponential growth in data and the virtualisation of networks continues at pace. We are well positioned for future growth with our leading-edge technology, to enable our customers to accelerate their time to market and increase their quality of service at lower operating costs."

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