5th Nov 2007 07:00
Spirent Communications PLC05 November 2007 SPIRENT COMMUNICATIONS PLC STRATEGIC REVIEW London, UK - 5 November 2007: Spirent Communications plc ("Spirent" or "theCompany") (LSE: SPT), a leading communications technology company, is announcingtoday the results of the second phase of the Group Review. As stated in the interim results announcement on 9 August 2007 the aims of theStrategic Review were to address the Company's business portfolio and productdevelopment priorities, as well as further cost containment opportunities andthe structure of the balance sheet. Overview The restructuring of the Company aims to target Spirent to areas of strategicadvantage in desirable market segments in order to deliver growth in excess ofthe industry average. Incremental cost savings of £7.3 million have beenidentified, principally to the benefit of 2008, bringing the total savings to£28.3 million. These have been achieved with minimal effect on sales andproduct development, as demonstrated by current trading and planned productintroductions for 2008, and at no increase in exceptional costs. Business portfolio • Focus on developing the core Performance Analysis business, operating at 11 per cent return on sales. • During the third quarter 2007, growth in Spirent TestCenter(TM)business exceeded the decline in legacy business for the first time. • Service Assurance operating at 11 per cent return on sales with a stable outlook for 2008. • Systems operating at 12 per cent return on sales in a stable long term market. Product development • Build on the exceptional product breadth of our core business Performance Analysis through greater engineering efficiency. • Enhance development of Spirent TestCenter. • Migrate to a higher software component in the business. • Pursue integration synergies and wireless market opportunities. Cost containment • Further incremental savings of £7.3 million identified, equivalent to 0. 8 pence earnings per share. • Incremental savings achieved with no increase in exceptional costs. • Trading performance in the third quarter demonstrates that the cost improvements have been achieved with minimal effect. Balance sheet structure • From 1 January 2007 to the end of September, £21 million has been utilised for share repurchase. • Targeting a total return through share repurchases of £65 million by the next AGM. • Strong cash generation for the nine months ended September 2007 - net operating cash inflow of £26 million. Corporate Governance • Board composition is now compliant, as is each Board Committee. Edward Bramson, Chairman, commented: "The business has become more predictable and the strong cash flow performancesupports continued future financial flexibility. Planned product introductionsin desirable market segments offer encouraging prospects for Spirent to delivermedium term growth." - ends - Enquiries Edward Bramson, Executive Chairman Spirent Communications plc +44 (0)1293 767676Eric Hutchinson, Chief Financial OfficerAndrew Dowler/Harriet Keen Financial Dynamics +44 (0)20 7831 3113 The Company will host a presentation today at 09.45am for 10.00am UK time at the offices of ABN Amro, 250 Bishopsgate, London, EC2M 4AA. A simultaneous webcast of the presentation will be available on the Spirent Communications plc website at www.spirent.com. About Spirent Communications plc Spirent Communications plc is a leading communications technology companyfocused on delivering innovative systems and services to meet the needs ofcustomers worldwide. We are a global provider of performance analysis andservice assurance solutions that enable the development and deployment ofnext-generation networking technologies such as broadband services, Internettelephony, 3G wireless and web applications and security testing. The Systemsgroup develops power control systems for specialist electrical vehicles in themobility and industrial markets. Further information about SpirentCommunications plc can be found at www.spirent.com. Spirent Communications plc Ordinary shares are traded on the London StockExchange (ticker: SPT). The Company operates a Level 1 American DepositaryReceipt ("ADR") programme with each ADR representing four Spirent Communicationsplc Ordinary shares. The ADRs trade in the US over-the-counter ("OTC") marketunder the symbol SPMYY and the CUSIP number is 84856M209. Spirent and the Spirent logo are trademarks or registered trademarks of SpirentCommunications plc. All other trademarks or registered trademarks mentionedherein are held by their respective companies. All rights reserved. Cautionary statement This document may contain forward-looking statements which are made in goodfaith and are based on current expectations or beliefs, as well as assumptionsabout future events. You can sometimes, but not always, identify thesestatements by the use of a date in the future or such words as "will","anticipate", "estimate", "expect", "project", "intend", "plan", "should","may", "assume" and other similar words. By their nature, forward-lookingstatements are inherently predictive and speculative and involve risk anduncertainty because they relate to events and depend on circumstances that willoccur in the future. You should not place undue reliance on theseforward-looking statements, which are not a guarantee of future performance andare subject to factors that could cause our actual results to differ materiallyfrom those expressed or implied by these statements. The Company undertakes noobligation to update any forward-looking statements contained in this document,whether as a result of new information, future events or otherwise. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Spirent