Interim Results

Calnex Solutions plc (AIM: CLX), a leading provider of test and measurement solutions for the global telecommunications sector, is pleased to announce its unaudited results for the six months ended 30 September 2021 (“H1 FY22” or “the Period”).

The Board is pleased to report that the Group has experienced continued strong levels of trading in the first half of the year and expects this trend to continue through the second half of the year. The Group’s robust cash position has allowed the Group to bring forward planned investment in the team to increase operational capability, in line with order growth.

The Group continues to successfully deliver on its stated growth strategy and the Board is confident in Calnex’s ability to continue benefitting from the underlying market growth drivers in the telecoms market.

Financial Highlights (~000)

• Revenue: £9,251 (H1 2021: £7,721)
• Underlying EBITDA*: £2,479 (H1 2021: £2,593)
• Adjusted PBT**: £2,308 (H1 2021: £2,319)
• Adjusted Basic EPS***: 2.05p (H1 2021: 3.02)
• Adjusted Diluted EPS: 1.99p (H1 2021: 2.42)
• Closing Cash: £13,643 (H1 2021: £4,511)

Revenue growth of 20% on prior year to £9.3m (H1 FY21: £7.7m) as a result of strong demand for telecoms testing equipment, ahead of management’s expectations at the start of FY22

• Planned and previously highlighted investment in product development and operational scalability, to support future growth
• All profit measures ahead of management expectations at the start of FY22, as a result of the strong revenue performance
• Closing cash balance of £13.6m (H1 FY21: £4.5m before 5 October 2020 IPO net proceeds of £4.9m) after positive cash flow of £0.9m in the half year driven by strong trading performance
• Movement in EPS compared with H1 FY21 is as a result of a change in the number of shares in issue pre and post IPO, as well as the subsequent issue of share options in the plc business with no corresponding direct economic value
• Maiden interim dividend of 0.28 pence per share in line with the Board’s intention to implement a progressive dividend policy in the year to 31 March 2022

Operational Highlights:

• Continued strong demand for testing instrumentation, with new product launches having been well received
• The Group has seen a return to pre-COVID customer spending patterns in all regions, other than in China where demand has been in line with the previous year
• Industry regulation such as the new O-RAN standards continue to drive the requirement for performance testing
• Increased staffing levels across business development, sales, R&D and support roles, to support new product development and maximise exposure in new and existing territories
• Maintained timely shipments to customers, whilst navigating the semi-conductor component shortage

Outlook:

• Strong levels of trading seen in H1 have continued into the second half of the year
• Demand for telecoms testing equipment remains strong
• Global semiconductor shortage is being closely monitored by the Board but no negative impacts to date
• The Board is confident in meeting the upgraded** market forecasts for the year

**Upgraded forecasts issued on 12 October 2021, following the Company’s Trading Update.

Tommy Cook, Chief Executive Officer, and founder of Calnex, said: “These results mark another considerable step forward for Calnex, as we continue to capitalise on the global telecom industry’s transition to 5G and the growth of cloud computing. The results for the first half of FY22 are materially ahead of the Board’s expectations at the start of the year, as indicated in the Company’s Trading Update issued in October 2021, and confidence levels remain high with the early signs being that sales momentum will continue in the second half of the year. We have invested in our team and resources and the continued positive response to the new product launches provides optimism towards the long-term demand for our offering.

“The breadth of our customer base across multiple regions, combined with the ongoing successful expansion of the team, our customer relationships and industry connections, places us in a strong position to continue to benefit from the underlying market growth drivers in the telecoms market.”

1 EBITDA after charging R&D amortisation, adjusted in comparative periods also to exclude IPO costs and IPO related share based payments

2 Adjusted in comparative periods to exclude IPO costs and IPO related share based payments

3 Adjusted in comparative periods to exclude IPO costs and IPO related share based payments, and the tax effect of these adjustments

News in full

In the interview below CEO Tommy Cook provides an overview of the business, the market within which they operate and future growth plans

VIDEO: Calnex Solutions