Shares of Linlithgow-based telecoms testing and measurement firm Calnex Solutions plc fell as much as 12% after it reported results for the year ended March 31, 2024, showing revenue fell 41% to £16.3 million and that it made a loss before tax of £400,000 compared to a profit before tax of £7.2 million in the prior year.
Calnex is proposing a final dividend of 0.62p per share, making a total of 0.93p per share for FY24 (FY23: 0.93 pence).
The company said its performance has been impacted “by the wider economic environment and resulting deferral of investment in telecoms market.”
Calnex said a post-period end review of sales channels and channel partner arrangements “has identified opportunities to strengthen existing customer engagements” and to reach new customers.
“To provide the company with the ability to optimise the channel partner arrangements, the board has elected to terminate its reseller agreement with Spirent and initiated the process of implementing the company’s new sales channel strategy,” said the firm.
In its outlook, Calnex said: “Challenges across the wider telecoms market are expected to remain for the duration of the year but the fundamental long-term need for telecoms testing solutions remains unchanged.”
Calnex’s customers include BT, China Mobile, NTT, Ericsson, Nokia, Intel, Qualcomm, IBM and Meta.
Calnex went public at 48p per share in October 2020 and its shares soared as high as £1.95 in January 2023. However, the Linlithgow firm’s shares have since fallen to around 55p, reducing its stock market value to about £48 million.
Calnex CEO Tommy Cook said: “We have successfully expanded our new product development programmes to focus on near-term growth channels – specifically the development of new capability in the telecoms market to capitalise on demand for 800Gb/s, as well as our product launches to capitalise on the increasing demand in the cloud computing and data centre markets.
“Our recent product innovations are gaining traction and we anticipate a return to growth in FY25, notwithstanding the challenges in the telecoms market which are expected to remain for the duration of this year.
“The fundamental drivers that underpin the build out of the mobile network and the expansion of the data centres and cloud computing capacity have not changed, and our longstanding customer relationships across all territories leave us well positioned to convert our telecoms sales pipeline once the trading environment improves.
“Our healthy balance sheet will enable us to weather these uncertainties, providing the Board with confidence in the medium- and long-term future of Calnex and in our ability to deliver for our customers, team, and shareholders.”