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Spirent Communications says strategy shift to land it with US$4mln bill next year

The FTSE 250-listed telecoms equipment company said that order intake and revenues grew in the third quarter as 5G gains momentum

Spirent Communications -
Spirent Communications hopes to take advantage of the 5G opportunity with a new direction

Spirent Communications PLC (LON:SPT) expects to stump up US$4mln for a strategic shift under its new chief executive, with most of the cost to be incurred in the next financial year.

In a trading update on Friday, the 5G telecoms equipment company said its full-year expectations remain unchanged after a solid third quarter, with the company now expecting “a period of upcycles” driven by 5G and the move to higher-speed Ethernet testing.

READ: Spirent Communications names another Eric as its chief executive officer

With Eric Updyke's appointment as CEO in May came a raft of strategic initiatives for Spirent, including a focus on recurring revenue streams over time, strengthening the leadership team with new hires, and developing sales and marketing structure, that is expected to cost a total of US$4mln.

Elsewhere, the FTSE 250-listed telecoms company said order intake and revenue in the third quarter showed robust growth on the same period in 2018, underpinned by continued positive momentum from US government spending and the industry’s focus on 5G radio.

Updyke said order intake was strong in the quarter despite “some short-term lumpiness in order placement” and that progress is expected to continue, with revenue and earnings weighted to the second half of the year as per previous years.

He added that in order to take full advantage of market opportunities, Spirent is “focusing on building more recurring revenue streams over time, and to do this we have augmented our experience and capabilities with some new senior leaders”.

In early morning trading, Spirent shares 1.1% lower at 198.80p. 

Quick facts: Spirent Communications

Price: 293 GBX

Market: LSE
Market Cap: £1.79 billion

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