UK-listed telecoms and connectivity testing kit manufacturer Spirent Communications (SPT) has committed to pay its final $0.0345 (2.7p) 2019 dividend on 1 May after strong revenue and cash flow in the first quarter of this year.
Revenue in the three months to 31 March increased 12% with ‘good growth’ in new orders, Spirent said.
‘We benefited from our strong opening order book and we have continued to build momentum into the second quarter,’ the company added.
5G SPENDING GOES ON
Spirent said the development of 5G continued at pace and that it had secured key orders to support customers across its portfolio despite most of its China-based workforce working from home.
‘We ensured robust communication links with our customers which led to a healthy level of orders from the region despite the virus,’ the company said.
Shares in the £1.43bn FTSE 250 business jumped nearly 4% to 237p, having plunged to just 151.6p just a few weeks ago as coronavirus concerns escalated.
While uncertainty obviously remains, the intensity of those worries now appears to have been overstated.
Strong cash flows saw Spirent’s net cash in the bank jump from $183m at the end of 2019 to $208m at the end of March, a comforting reserve to fall back if the coronavirus outbreak sparks an even greater clampdown on corporate investment spending.
LITTLE DRAG ON ORDERS
So far, Spirent has seen little sign of this, but it continues to watch customer orders closely.
‘As the virus moved to other countries, we were already implementing operational continuity plans to support sourcing and implementing shift arrangements and skeleton crews to ensure shipments to our customers,’ said the company.
Spirent has also used digital media apps to stay in touch with customers, presumably through the likes of Microsoft Teams and Zoom video conferencing.
‘Our business model is proving to be resilient particularly at a time when infrastructure is critical for global communications,’ said chief executive Eric Updyke.
‘We benefit from our long-standing customer relationships built over many decades, and our global engineering and operational footprint combined with our strong balance sheet provides flexibility as we manage through uncertainty.’
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