This announcement contains inside information.

7 March 2023

Calnex Solutions plc

("Calnex", the "Company" or the "Group")

Trading Update

Calnex Solutions plc (AIM: CLX), a leading provider of test and measurement solutions for the global telecommunications sector, provides an update on the Company's trading performance for the financial year ending 31 March 2023 ("FY23") and the outlook for the following year to 31 March 2024 ("FY24").

Key Points

·    Solid revenue and profit performance in the second half of FY23

·    FY23 results expected to be in line with market expectations

·    Global macroeconomic outlook remains challenging

Update on Trading in FY23

The Company entered the second half of FY23 ("H2") with a strong order book and successful conversion and delivery has led to the anticipated improved performance in H2. Good progress has been made in developing business in the data-centre sector and the integration of iTrinegy has gone well, opening up opportunities in the applications testing sector. As a result, the Board is pleased to confirm that it expects a strong financial performance in FY23, in line with market expectations and delivering double digit growth across revenue and profits. 

Outlook for FY24

The macroeconomic outlook remains challenging, with growth slowing across the globe. Telecoms sector participants, including global equipment manufacturers, have been adversely impacted, with many recently reporting a general softening of demand for their products and services in the short-term, albeit noting that the long-term structural growth drivers remain strong. 

In response to the macroenvironment, some of Calnex's customers are currently taking a more cautious approach to investment decisions until there is better visibility on their project development timelines. Whilst these customers remain committed to the delivery of projects which will rely on Calnex's test instrumentation and solutions, the timing of these orders is less certain and market-driven delays are likely to have an impact on the Group's performance in FY24. Based on short-term order run-rates, the Board believes that the financial performance in FY24 will be below that achieved in FY23, with the Company's revenues more heavily weighted to H2 of FY24.

The Board is confident that, as the industry spending cycle normalises, the Company will see an uplift in orders from the current, more subdued, levels. Calnex remains well placed to capitalise on the underlying long-term growth drivers in the telecoms and cloud computing markets and the Company will provide an update on prospects for FY24 when the Preliminary Results for FY23 are announced in May 2023.

Tommy Cook, Chief Executive Officer, and founder of Calnex, said:

"We are pleased to anticipate delivering financial results for FY23 in line with market expectations, with this solid performance demonstrating the positive response from customers to our expanding product set and our ability to successfully navigate the supply chain challenges. While the global macroenvironment is influencing order growth in the short-term, our expanded offering and strong financial footing mean we are well-placed to return to a growth trajectory once market confidence returns."

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Overview of Calnex

Calnex designs, produces and markets test instrumentation and solutions for network synchronization and network emulation, enabling its customers to validate the performance of the critical infrastructure associated with telecoms networks. To date, Calnex has secured and delivered orders to over 600 customer sites in 68 countries across the world. Customers include BT, China Mobile, NTT, Ericsson, Nokia, Intel, Qualcomm, IBM and Meta.

Founded in 2006, Calnex is headquartered in Linlithgow, Scotland, with additional locations in Belfast, Northern Ireland, Stevenage, England and California in the US, supported by sales teams in China and India. Calnex has a global network of partners, providing worldwide distribution capability.