This announcement contains inside information

03 April 2024

Calnex Solutions plc

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

FY24 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 for the year to 31 March 2024 ("FY24") and outlook for FY25.

Calnex anticipates the results for FY24 will be broadly in line with market expectations, with revenues of approximately £16.3 million and margins maintained. The Company's cost base has been adjusted, maintaining and focusing R&D spend to capitalise on the opportunities available to Calnex whilst controlling other costs. The Group's balance sheet remains strong, with cash as at 31 March 2024 of £11.9 million after investment in working capital in H2.

While the Group's performance has been affected by the well documented ongoing challenges in the telecoms sector, customer engagement levels have remained high, providing confidence that improvement in the telecoms market outlook will result in projects recommencing and customer spending resuming. Calnex is well placed to fulfil orders relating to these projects once activity levels increase.

The Board is encouraged by the level of positive engagement with customers on the Group's new product programmes and in particular expects that continued order growth from the defence and cloud computing sectors will enable Calnex to return to growth in FY25.

Positioned for growth in FY25 and beyond

Management has focused the Group's engineering programmes on opportunities showing the most near-term resilience and potential within the Group's established telecoms market and in the newer markets of cloud computing and defence.

Targeting growth in the telecoms market and long-term growth drivers intact

Within the telecoms market, the engineering programme is focused on the area of 800Gb/s synchronisation testing, an unmet need where there is growing customer demand. The Group anticipates a major new release in H2 FY25 to support leading edge 800Gb/s interface testing. Looking ahead, while the current challenges faced by the telecoms market are anticipated to continue throughout 2024, the Board is confident the transition to 5G and further development of O-RAN will drive a long-term transformation of the global telecoms infrastructure and demand for our lab synchronisation products.

Cloud computing and data centre markets represent growing opportunity

Calnex's newly marketed products focused on the cloud computing and data centre markets, SNE-X, SNE Ignite and NE-ONE, have seen encouraging levels of interest and initial orders. Over the medium term, the cloud computing market represents a significant additional opportunity for Calnex, given the investment into this market to support high growth in Artificial Intelligence (AI), virtual reality and increasing data centre demand. Measurement and testing is critical to performance in these areas. New opportunities are being assessed in network time monitoring, as well as data centre efficiency and effectiveness. The Group has also experienced good order levels for its application assurance offering, NE-ONE, in the defence, government and satellite markets and anticipates this will continue in FY25.

To maximise these opportunities, the Company is optimising its market approach for its suite of cloud focused offerings, bringing together its cloud infrastructure and cloud application teams, with a view to developing a consistent additional revenue stream.

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

"In the face of a challenging telecoms market we have successfully adjusted the focus of our engineering programmes towards the markets showing the most resilience and opportunity, with positive customer conversations taking place across each of our new product programmes. The cloud computing market in particular represents an increasingly exciting opportunity and with the long-term growth drivers in the telecoms market remaining intact, we are well placed to return to growth in FY25 and beyond."

Notice of Results

The Company intends to announce audited results for the year ended 31 March 2024 on Tuesday 21 May 2024.

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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.