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Calnex profits soar as component shortages ease

Tommy Cook of Calnex
Tommy Cook: robust position

Linlithgow-based telecoms equipment company Calnex Solutions is seeing an easing of the global shortage of components.

Speaking to Daily Business yesterday after the group’s half-year figures, founder and CEO Tommy Cook said the company was “not immune” from supply chain issues but was in a “robust position”.

He added that it was managing to hire the people it needed, despite competition for skilled workers.

Calnex posted a 34% increase in profit before tax to £3.1m (H1FY22: £2.3m) on a 37.6% increase in revenue to £12.7m (H1FY22: £9.3m).

The strength of the US dollar provided a tailwind to revenue growth, estimated be around a third of revenue growth in the period, with revenue invoiced in US dollars representing around 80% of total revenue.

Revenues from the Americas and North Asia region increased 35.7% and 48.0% to £4.8m and £3.2m respectively and represented 35.7% and 24.9% of total group revenue respectively. Revenues from the Rest of the World (ROW) increased 31.5% to £5.0m, representing 39.5% of total group revenues.

The board declared an interim dividend of 0.31p pence per share to be paid in December. It is an increase of 10% on the 0.28p in H1/22.

The group has experienced continued strong revenue performance across its product lines, with the ongoing transition to 5G and the growth in cloud computing continuing to drive demand for test instrumentation and network validation.

The company’s positive trading performance during the period and proven ability to manage component shortages underpin the board’s confidence that the group’s performance for FY23 will be in line with market expectations.

In a statement with the results, Mr Cook said: “We are pleased to deliver a strong financial performance during the period, significantly increasing revenue and profit, while continuing to invest in our team’s capabilities and offering.

“We were delighted to successfully complete the integration of the iTrinegy team into the group during the period.

“Whilst it is sensible to look to the future with a degree of caution given the continuing component shortages and global macro-economic challenges, the company’s positive trading performance during the period and proven ability to manage component shortages underpin the board’s confidence that the group’s performance for FY23 will be in line with market expectations.

“The breadth of our customer base across multiple regions, ongoing successful expansion of the team and offering, and wealth of industry connections combine to place Calnex in a strong position to continue to benefit from the underlying long-term growth drivers in the telecoms and cloud computing markets.”

Calnex was floated on the Alternative Investment Market in October 2020 and Mr Cook retains a 19.9% holding. BGF has 12% of the stock. Shares in the company closed 2.50p (1.62%) higher at 157.5p.

Broker Cenkos said in a note: “Calnex’s order book was very strong going into H2/23 and the order backlog is starting to unwind (easing of supply chain issues), providing confidence in current expectations for the year. We have left forecasts unchanged.

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