Calnex Solutions Share Discussion Threads

[1nf3rn0] 23/11/2021 15:58

Rivaldo, I understand the point on increased investment potentially having a short-term impact on profitability, and hopefully for shareholders it is just that and there is worthwhile payback to come in 2022. But if you are looking for a reason for why some are selling today I reckon it is down to the 18 month profit trend. Underlying EBITDA and adjusted PBT are all down sequentially over the last three 6 month periods too, which is not explained by higher number of shares in issue.

[rivaldo] 23/11/2021 15:44

1nf3n0, as previously stated this last 6 months' EPS were heavily impacted by (1) increased investment which is now tailing off and (2) the additional IPO shares now in issue.

The important figure here imo is revenues, which are up 20% year on year, alongside the high confidence in such growth continuing.

With 5p EPS forecast to March that's a P/E of 24 - strip out the 15.5p per share of the £13.6m cash pile and that P/E reduces to 21.1. Pretty good value these days for a high-tech sector leader with likely good news for years to come.

[masurenguy] 23/11/2021 15:32

caucic - 505: Why the sell off? No logics.

Well there is a logical explanation. On current forecasts the shares are valued at a PER of circa 29x next years earnings. Some people would view that as a bit rich for a small AIM listed company, particularly short term PI investors and traders. Furthermore Otus Capital Management reduced their holding by nearly 40% some 3 weeks ago when the share price was around 145p.

I view CAL as a long term investment and having invested here over a year ago I'm happy to sit on my holding, at an average cost price of 65p, and ignore the short term vacillations in the shareprice. I may even add further if the price should dip much lower.

[1nf3rn0] 23/11/2021 15:12

Adjusted EPS:H1 FY21 3.02pH2 FY21 2.81pH1 FY22 2.05pIs this not the trend the market is reacting negatively to? Bearing in mind this latest half year was also the least affected by lockdowns of the 3 and they state that travel (costs) will increase going forwards.Increasing revenue is nice, but it needs to be shown to hit the bottom line eventually.

[rivaldo] 23/11/2021 14:34

Agreed. I particularly liked:

(1) Last year the CEO wasn't ready to call CLX's excellent results more than a single good trading period. Now he's happy to call the continued strength a trend which is unlikely to stop any time soon
(2) He emphasised a few times that more and more different markets are now looking at and buying CLX's products, i.e the finance sector for one.

Given the confidence shown in the presentation I suspect the share price will bounce soon after this initial profit-taking.

[hew] 23/11/2021 14:14

A good IMC presentation session. No call for reassurance IMO but plenty provided for any needing it. Great to hear some A's that exceeded the Q's!

[caucic] 23/11/2021 14:07

Why the sell off? No logics.

[doctor888] 23/11/2021 14:05

Worth noting that revenues typically have a 45%/55% split between H1/H2, so we should beat forecasts again, if this recurs.

[caucic] 23/11/2021 10:37

Analyst presentation

Tommy Cook, Chief Executive Officer and Ashleigh Greenan, Chief Financial Officer, will host a presentation for analysts on Tuesday 23 November at 11:00am. Any analyst wishing to attend should email [e-mail] to register their attendance.

Investor Presentation

The management team will provide a live presentation for investors via the Investor Meet Company platform at 1:00pm on Tuesday 23 November.

Investors can sign up to Investor Meet Company for free and add to meet Calnex Solutions plc via:

[caucic] 23/11/2021 10:26

Why the big drop?

I understand "sell on the news" but this looks oversold to me.

Presentation at 1:00 pm will boost the price back

[doctor888] 23/11/2021 08:22

'Can anyone explain to me why the OCF has not accounted for tax? My understanding is that OCF is calculated from profit after tax, not profit before tax.'

I queried this in the meeting - CLX are not yet paying tax yet.

[rivaldo] 23/11/2021 08:08

Cenkos have updated today and summarise as follows, retaining the recently increased forecasts

"Calnex Solutions plc Keeping time with growth – Interims update

In line with the October trading update, Calnex has reported a c20%
increase in revenue to £9.3m for H1/22 (H1/21: £7.7m) following substantial demand for telecoms testing equipment and strong levels of trading in H1/22. This strong trading has continued into H2/22. Investment in product development and operational scalability has been increased with the strong cash position enabling Calnex to accelerate investment and expand capacity in line with the growth in the order pipeline."

"Outlook.

With the telecom infrastructure, networking and services markets seeing
an expanding number of market participants requiring testing solutions, the growth
outlook for Calnex remains secure. Following the maiden interim dividend of 0.28p,
we forecast 0.56p in total for FY22E. The order backlog at H1/22 and strong order
pipeline for H2/22E should drive further revenue growth for FY22E and FY23E."

[hastings] 23/11/2021 08:07

Happy with the results and direction/prospects. Speaking with management this morning and will add a write up in due course for interest.

[hew] 23/11/2021 08:01

Ints show clear emphasis on building a high quality and growing platform for good things in the future. As the TU so I don't expect any fireworks today.

[johndoe23] 23/11/2021 07:44

Agreed. Market is unforgiving at the moment!Long term, everything in place here...

[multibagger] 23/11/2021 07:28

Good morning all :)

A good set of results but I think the market will be "cautious" and mark it down....let's wait and see what happens !

Hope I am wrong :)

[rivaldo] 23/11/2021 07:22

That's a very, very confident set of interims - the CEO is unusually bullish.

In particular, "The Board is confident in meeting the upgraded market forecasts for the year", i.e 5p EPS, so H2 will be expected to produce almost 3p EPS and trading on a run-rate of around 6p EPS per annum.

Plus CLX have almost 12% of their m/cap in a cash pile - strip this out and the P/E looks pretty good value for a tech company riding the 5G and telecoms wave.

Despite revenues being 20% up year on year, some might balk at PBT being flat and EPS down, but of course that's due to a particularly high investment phase for the future which we were already aware of (and which has produced the products now selling so well).

[masurenguy] 23/11/2021 07:07

Interim Results

Looking good with sales up 20%, profit up 18%, eps virtually flat and cash up 66% ! No impact to date from the global semiconductor shortage. A considerable market opportunity lies within the role that 5G has to play in supporting introduction of new services, such as autonomous vehicles, mobile phones and smart devices, that need higher quality connections. The testing market continues to increase with the growth in the number of data centres operated by enterprise and hyperscale companies.

Tommy Cook, Chief Executive Officer, and founder of Calnex, said: "These results mark another considerable step forward for Calnex, as we continue to capitalise on the global telecom industry's transition to 5G and the growth of cloud computing. The results for the first half of FY22 are materially ahead of the Board's expectations at the start of the year, as indicated in the Company's Trading Update issued in October 2021, and confidence levels remain high with the early signs being that sales momentum will continue in the second half of the year . We have invested in our team and resources and the continued positive response to the new product launches provides optimism towards the long-term demand for our offering. The breadth of our customer base across multiple regions, combined with the ongoing successful expansion of the team, our customer relationships and industry connections, places us in a strong position to continue to benefit from the underlying market growth drivers in the telecoms market."

[johndoe23] 21/11/2021 11:39

Interims on Tuesday, anyone with any thoughts on what EPS might come in at?Personally hoping for at least 2.5p, 3p would be great!

[tole] 17/11/2021 17:09

https://www.fool.co.uk/2021/11/17/this-share-should-be-able-to-maintain-its-momentum-and-grow-rapidly/

[doctor888] 12/11/2021 20:12

In Feb, the board said they were 'ahead of expectations' and revenues were 17% above Cenkos' estimates. Last month, they say they are 'materially ahead...' Any views on the difference between 'ahead of expectations' and 'materially ahead of expectations'? 17% seems a lot to me.

[gerihatrick] 11/11/2021 08:46

Dish is a client of ENET and these results also reflect on the wider applications of 5G for ENET.

[rivaldo] 11/11/2021 07:40

A strong Q3 trading update from major client Spirent this morning:



"We are pleased to report continued momentum and the Board remains confident that the Group will show solid progress in 2021."

"Once again, 5G continues to be a strong driver of growth in demand across our solution portfolio."

"Lifecycle Service Assurance

Strong momentum and demand for products in both the lab and the live assurance market resulted in good order growth in the third quarter. We continue to secure multi-year contracts increasing longer term visibility.

Key wins included a large and strategic 5G order from Dish Networks, an innovative new North American network operator that plans to become the first telecom company to run its service on the public cloud. Dish will be utilising both our lab-based and live network solutions to autonomously test and validate its 5G network core.

Networks & Security

....application and security testing is gathering momentum as we continue to support customers to develop their 5G infrastructure and has delivered growth year to date compared to the prior year. We have made good progress in growing our business with the Hyperscalers by focusing on their 5G initiatives."

[rivaldo] 10/11/2021 07:22

H1 results now confirmed for 23rd November - good to see an Investor Meet presentation as well as the one for analysts.

We already know the H1 results will be excellent and the outlook is "materially ahead of previous expectations"....