Calnex shares soar; strong trading at Linlithgow firm

Calnex CEO Tommy Cook

Shares of Linlithgow-based telecoms testing and measurement firm Calnex Solutions plc rose another 6% on Tuesday after it published an update on trading for the year ending March 31, 2021, saying it anticipates that full-year revenues will be ahead of market expectations.

Calnex went public at 48p per share in October and its shares have soared to around 125p to give the firm a stock market value of around £110 million.

The company’s founder and CEO Tommy Cook owns about 21% of the firm.

Calnex’s customers include BT, China Mobile, NTT, Ericsson, Nokia, Intel, Qualcomm, IBM and Facebook.

Founded in 2006, Calnex is headquartered in Linlithgow with additional locations in Belfast and California, supported by sales teams in China and India.

“The board is pleased to announce that the strong levels of customer spend experienced in the first half of the group’s financial year continued into the second half of FY21, with no deterioration in operational performance noted from any macro-economic factors, including the ongoing COVID-19 pandemic,” said Calnex.

“The board believes the COVID-19 pandemic may have influenced certain customers’ spending patterns, resulting in some revenues being brought forward into FY21.

“As a result of the continued strong performance in the second half of FY21, the board anticipates revenues for FY21 will be ahead of market expectations.

“In addition, as a result of lower travel and event costs due to COVID-19 restrictions, higher margins are expected to be achieved in FY21 than would have been anticipated, which will result in the company’s profitability also being ahead of market expectations in FY21.

“With the long-term underlying growth drivers continuing, as the market transitions to 5G and the widescale adoption of cloud computing progresses, the board is confident that while industry spending patterns may normalise in FY22, Calnex is well positioned to deliver its historical growth rates over the long-term.

“The group expects to commence FY22 with a healthy order book and intends to provide an update on the outlook for FY22 when it announces its preliminary results for FY21 in late May.”

Calnex CEO Tommy Cook said: “We have seen the strong customer spending patterns flagged at the time of our interim results continue into the second half of the year, which coupled with our continued strong operational performance means we are pleased to confirm that we expect to deliver growth in the year considerably ahead of the forecasts published at the time of our IPO.

“While we have now started to see some signs that this early pull through of orders is reverting to more normal levels, we anticipate entering FY22 with a healthy order book.

“We continue to make good progress executing on our growth strategy, investing in our product offering and people to capitalise on the growth of the telecoms testing market as the industry transitions to 5G and the cloud computing sector continues to grow.

“We are delighted to have delivered this strong performance in our first period as a PLC and continue to look to the future with confidence.”