Financial highlights
Group revenue decreased to $190.4 million (first half 2012: $236.1 million) reflecting the lower order book at the start of 2013 and near-term caution in capital spending by our customers.
Book to bill ratio for the Group was 110 (first half 2012: 91) and showed improving momentum during the second quarter of 2013.
Adjusted operating profit was $18.2 million (first half 2012: $59.1 million), impacted by Spirent's high gross margin on reduced revenues and an increased investment in product development.
Adjusted basic earnings per share was 2.03 cents (first half 2012: 6.33 cents).
Interim dividend increased by 10% to 1.53 cents per Ordinary Share (equivalent to 1.01 pence per share).
Free cash generation of $26.7 million (first half 2012: $44.5 million).
Closing cash was $246.9 million at 30 June 2013 (31 December 2012: $248.6 million) after share buybacks and dividends paid in the first half-year totalling $26.4 million.
Operational highlights
Spirent continues to invest in its solutions portfolio to address the key industry trends and in the period launched:
- Highest density Ethernet test solutions to meet the rapidly-evolving needs of complex data center and service provider networks;
- Highest performance and malware capability for our application and security test portfolio;
- First-to-market test capability for the Chinese BeiDou-2 global navigation satellite system;
- Solutions and services to measure the performance of Voice over LTE ("VoLTE"), HD Voice and video services on live networks from an end-user perspective;
- Lab-based solutions to test VoLTE and LTE-Advanced in 4G/LTE devices.
These innovations are in turn leading our customers to use our test solutions in new ways:
- The industry's largest 40Gb Ethernet test to date verified performance of HP's FlexFabric data center portfolio;
- Security expert NSS Labs began using Spirent Avalanche to evaluate nine leading next-generation firewall products;
- Leading test lab SGS chose Spirent for 3GPP data performance testing of 4G/LTE devices.
Outlook
July order intake levels have been satisfactory. Combined with key new product launches, this gives us confidence in performance for the third quarter. For the remainder of the year we are mindful that some customers may continue to adopt a careful approach to their spending plans.
The investments we are making to address future business opportunities in existing markets and to enter new markets support the medium and long term prospects for the Company.
Bill Burns, Chief Executive Officer, commented:
"Uncertainty and volatility in demand exhibited by our major customers in the first half resulted in near term challenges in trading. However, we were encouraged by the improvement in order intake for the second quarter. We believe the developments we are undertaking in new technology areas will deliver on-going and long term competitive advantages for Spirent."
