Calnex shakes off global semiconductor concerns to issue profit upgrade

Calnex Solutions has upped its full-year profit guidance amid continued “strong levels” of demand for its telecommunications testing equipment.

In a trading update for the six months to the end of September, the Linlithgow-based company said robust levels of trading are expected to carry through into the second half of the year. As a result, revenue and profits for the full year will be “materially ahead” of previous expectations.

The group said customer spending patterns have returned to pre-Covid levels in all regions except China, where demand is in line with that of last year during the first wave of global lockdown restrictions. With a “robust” cash position, Calnex is bringing forward planned investment to increase operational capability in line with the growth in orders.

READ MORE: Calnex continues cashing in on demand for mobile data

The company added that it has not yet experienced any negative impact from the global semiconductor shortage on its ability to manufacture and ship product, though it continues to monitor the situation closely.

“I am delighted to provide an update on what has been another period of strong growth for Calnex,” chief executive Tommy Cook said. “We have seen most of our customers return to pre-Covid spending patterns and have experienced demand from both new and existing customers for our latest product enhancements.

“Whilst we remain cautious with regards to the ongoing global semiconductor shortages, the strength in customer orders in the first half of the year provides us with confidence that the full year revenue and profits will exceed that of the record prior year and mark another considerable step forward for Calnex, as we continue to capitalise on the industry’s transition to 5G and the growth of cloud computing.”

READ MORE: Calnex beats expectations as it rides telecommunications wave

For the year to March 2021, Calnex posted a 31% increase in revenues to £18 million, with profits up 22% at £3.6m.

One of the company’s main product lines is equipment for measuring how efficiently a network operator’s equipment is passing mobile connections from one station to the next. Ensuring a maximum degree of this synchronisation boosts connection capacity and means the fewest number of users suffer dropped signals.

Shares in Calnex closed yesterday’s trading 7.5p higher at 122p.

The Herald Scotland

The Herald Scotland

The Herald is a Scottish broadsheet newspaper founded in 1783. The Herald is the longest running national newspaper in the world and is the eighth oldest daily paper in the world. The title was simplified from The Glasgow Herald in 1992