This announcement contains inside information

10 October 2023

Calnex Solutions plc

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

Trading Update and Notice of Results

Calnex Solutions plc (AIM: CLX), a leading provider of test and measurement solutions for the global telecommunications and cloud computing markets, provides an update on trading and outlook for the full year to 31 March 2024 ("FY24") and beyond.

In the first six months of FY24, the Company's order inflow has remained at the subdued levels experienced at the start of the year, with the precise timing of future customer orders remaining uncertain.  The cautiously improving outlook for the sector identified earlier this year has not developed momentum and the Company is aware that certain customers have elected to delay projects and associated orders in response to continuing wider economic uncertainty. These factors have led the Board to conclude that H2 FY24 will be slower than anticipated.

The challenging market conditions mean the Board now anticipates that, whilst revenues are expected to increase in H2 versus H1, revenues for FY24 will be in the region of 20-30 per cent below current market expectations, depending on the timing of orders. No customer orders have been cancelled and all are expected to be fulfilled once the delays to customer project spending are relaxed.

The Company's balance sheet remains robust, with cash at the end of September 2023 of £13.5 million, following investment in inventory. The cash position enables the Company to continue to target growth opportunities in its key sectors and maintain relationships with customers as they plan future investment in their projects.

Calnex's sales pipeline remains strong and the Company's close relationships with its customers leaves it well positioned to convert the sales pipeline to orders once spending patterns normalise.

The Board is confident in a return to growth in FY25, with Calnex able to deploy its suite of products to target opportunities in both the Telecoms and Cloud-computing and related sectors. Costs are closely monitored with investment in new products subject to stringent assessment.

The Company is actively targeting new markets with its expanded product range, and recently launched, or soon to be launched, enhanced product lines within existing and new key markets, include:

·  Sentry timing product to address the large data centre market.

·  SNE-Ignite and SNE-X products have been designed to prove the performance of new, real-time cloud-based applications.

·  NE-ONE, Calnex's recently acquired network emulation product, is targeting defence and government markets.

·  Enhancement to the Paragon platform, through a major new release in H2 FY25 to support leading edge 800Gb/s interface testing.

·  SyncSense, Calnex's newly-developed data centre and telecom network management timing product, has been well received by customers.  

These products will enhance penetration in the Company's target markets, reinforcing the potential for growth in FY25 and beyond.

Notice of Results

The Company intends to announce unaudited results for the six months ended 30 September 2023 on Tuesday 21 November 2023.

Tommy Cook, Chief Executive Officer, and founder of Calnex, said: "Whilst the telecommunications market outlook is currently challenging, the expansion of our product portfolio to areas outside of telecommunications and our strong sales pipeline mean we are confident in a return to growth in FY25.

"Looking to the longer-term, the underlying market drivers continue to build, such as the need to upgrade telecoms infrastructure to deliver the promise of 5G, and to enhance data centre operations to support the demand for cloud computing and advancements in AI and Virtual Reality technologies. As a result, our confidence in the long-term prospects for Calnex remains high."

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Overview of Calnex

Calnex Solutions designs, produces and markets test and measurement instrumentation and solutions for the telecoms and cloud computing industries. Calnex's portfolio enables R&D, pre-deployment and in-service testing for network technologies and networked applications, enabling its customers to validate the performance of the critical infrastructure associated with telecoms and cloud computing networks and the applications that run on it.

To date, Calnex has secured and delivered orders 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 a worldwide distribution capability.