Trading update

Calnex targets cloud market as growth returns

Tommy Cook
Tommy Cook: the cloud market is an exciting opportunity

Calnex Solutions, the Linlithgow-based telecoms testing firm, is targeting the cloud computing market as as it forecasts a return to growth.

The AIM-quoted company said it is well-placed to fulfil orders across the telecoms sector once activity levels increase.

The board said in a trading update for the year to the end of March that continued order growth from the defence and cloud computing sectors will enable Calnex to return to growth in FY25.

Results for FY24 will be broadly in line with market expectations, it said, with revenues of approximately £16.3 million and margins maintained.

The company’s cost base has been adjusted, maintaining and focusing R&D spend to capitalise on the opportunities ahead. The balance sheet remains strong, with £11.9m of cash available after investment in working capital in the second half.

Management has focused the group’s engineering programmes on opportunities showing the most near-term resilience and potential within its established telecoms market and in the newer markets of cloud computing and defence.

Calnex’s newly marketed products focused on the cloud computing and data centre markets have seen encouraging levels of interest and initial orders.

It said that over the medium term, the cloud computing market represents a significant additional opportunity, given the level of investment into Artificial Intelligence (AI), virtual reality and increasing data centre demand. Measurement and testing is critical to performance in these areas, said the company.

It is uniting its cloud infrastructure and cloud application teams, to help develop a consistent additional revenue stream.

Tommy Cook, chief executive and founder of Calnex, said: “In the face of a challenging telecoms market we have successfully adjusted the focus of our engineering programmes towards the markets showing the most resilience and opportunity, with positive customer conversations taking place across each of our new product programmes.

“The cloud computing market in particular represents an increasingly exciting opportunity and with the long-term growth drivers in the telecoms market remaining intact, we are well placed to return to growth in FY25 and beyond.”

The company intends to announce results for the year ended 31 March 2024 on Tuesday 21 May.

Despite the more positive update, the shares continued their downward drift, closing at 57p, down 1.5p (2.56%).



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