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Calnex ‘navigates’ components issue with record orders

Tommy Cook of Calnex
Tommy Cook: great pride

Telecoms equipment testing firm Calnex Solutions said it has been able to navigate through the components shortage and begins the new year with a record order book.

The Linlithgow-based company posted revenue growth of 23% to £22m for the 12 months ended 31 March 2022 (FY21: £18.0m).

Adjusted profit before tax grew 18% to £6.0m (FY21: £5.1m), reflecting continued high demand.

There is a proposed final dividend of 0.56p, making a total of 0.84p per share for FY22.

The business continues to benefit from the evolutionary trends affecting the telecoms sector, notably in 5G and cloud computing.

Tommy Cook, chief executive, said: “It is with great pride that we are presenting such a strong set of results for Calnex, in what has been a complicated year.

“To deliver record performance, exceeding market expectations, whilst dealing with the effects of a global pandemic and global semiconductor component shortages, is truly exceptional. The strength and quality of the Calnex team and the relationships we hold has never been more apparent.

“We move into FY23 with a record order book and look to the future with a strong sense of optimism.”

Speaking afterwards to Daily Business, he said: “What is reassuring is that it [growth] is not just in one product line. We are making progress in all areas.”

He added that the components issue that has caused some disruption to the global economy had not seriously affected the company.

“It is difficult, but we have managed to navigate the situation,” he said.

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Last month’s £3.5m purchase of Stevenage-based software developer iTrinegy sees Calnex move into an “attractive new market”. The business continues to benefit from the evolutionary trends affecting the telecoms sector, notably in 5G and cloud computing. Demand for test equipment therefore remains strong.

“If there is a further acquisition opportunity we will certainly look at it,” he said, but he added that the company has no immediate plans to raise capital.

All but about 3% of activity is outwith the UK, sourced from the Linlithgow HQ which is expected to expand slightly to accommodate a few more personnel. It has also opened an office Belfast.

Market reaction

Ian McInally, an analyst at Cenkos, notes “another very strong year of trading for Calnex” and says the recent acquisition of iTrinegy, adds to the breadth of Calnex’s product portfolio.

“The strong cash position enables Calnex to continue accelerate investment in the product portfolio and capacity expansion to support growing demand,” he says in a newly-published note.

“Calnex has proposed a final dividend of 0.56p, ahead of our forecast 0.28p, making 0.84p for the year. We have assumed that the dividend will be increased 10% in both FY23E and FY24E to 0.92p and 1.02p respectively.”

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