West Lothian's telecoms-focused Calnex Solutions dials up 'strong' H1 with revenue and profit up more than a third

Linlithgow-based Calnex Solutions has seen both revenue and profit jump by more than a third in a “strong” first half, with an analyst highlighting confidence in current full-year expectations.

The firm, which provides test and measurement products for the global telecommunications sector, has unveiled its unaudited results for the six months ending September 30, showing a 38 per cent year-on-year increase in revenue to £12.7 million, attributed to strong underlying growth and the impact of currency movements.

Underlying earnings before interest, taxes, depreciation, and amortisation (ebitda) was up by 40 per cent, with the Aim-quoted firm adding that the underlying ebitda margin was maintained in line with the prior period, “despite the challenging external economic environment”. Pre-tax profit jumped by 34 per cent to £3.1m, and basic earnings per share came in at 2.78p, marking a “solid” 36 per cent jump, while an interim dividend of 0.31p pence per share is to be paid next month.

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Calnex also flagged that the half year saw £1.3m cash generated after the £2.3m net acquisition cash cost for the £3.5m acquisition of iTrinegy, a developer of test networks technology for the software application and digital transformation testing market, with integration progressing “as planned”, while a new network synchronisation product called Sentry is due to be launched in the second half, boosting its product offering for the cloud computing market.

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Chief executive and founder Tommy Cook cheered Calnex’s “strong” financial performance and integration of the iTrinegy team in the period. He continued: “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 [the full year] will be in line with market expectations… [We are] in a strong position to continue to benefit from the underlying long-term growth drivers in the telecoms and cloud computing markets.”

Cenkos analyst Ian McInally outlined a “buy” recommendation for the West Lothian firm, and praised its “continued strong trading” in the first half. “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,” he added.

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Boss Tommy Cook said various factors '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'. Picture: Peter Devlin.

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