Calnex Solutions Share Discussion Threads

[piedro] 24/11/2022 12:34

Sorry, the previous chart was without "depreciation & amortisation"

I hope you will approve this one ...



... which looks horrible!

[strollingmolby] 24/11/2022 11:33

OK, and sorry for labouring this... :-) I agree all the other numbers (H1-22 and H1-23, and some of H2-22) as these are taken directly from CLX's numbers in the interims and finals, but where does £7,917 come from?

Anyway, looking at the graph for a moment, it initially appears alarming that the gap between revenue and costs has narrowed, but the costs increased in H1-23 whilst revenue fell back, but this was after the gap widened in your H2-22, meaning the margins increased considerably before reverting back to more normal levels. (but depending on what Admin number is used...)

Thanks,
SM

[piedro] 24/11/2022 10:54

My H2-22 is the full year result less the previous interim result to get
the value for the last 6 months of the year.[calendar year not company year]
Thus I have Admin costs of 7,917 - 4,820 = 3,097

Gets confusing when the year does not end in December!

[strollingmolby] 24/11/2022 10:39

Piedro, thanks - I agree your Cost of Sales figures and the H1-22 figure. My view from the income statement for H2-22 Admin costs is £4,820 + £6,363 = £11,183. How do you get to £3,097 for H2 and the total of £7,917 for the year?

[rivaldo] 24/11/2022 10:33

The new Investor Meet investor call is well worth listening to.

A few brief highlights:

- hyperscalers (Google etc) are up to 23% of revenues
- CLX's global 5G infrastructure market is growing much more strongly than the overall telecommuncations market
- hyperscale data centre operators will grow their cap.ex at 10% per annum over the next 5 years
- CLX are continuing to look at acquisitions. They've even hired an ex-Spirent man to hone their processes....
- there will be an H2 weighting as usual, probably 45/55 H1/H2
- average product life is 10 years, so CLX's amortisation policy is prudent

[piedro] 24/11/2022 10:13

StrollingMolby,

I've tweaked the chart a tiny bit after your comment - nearly unnoticeable
Here is how I get my H2-22 ... [ie., FY-22 - H1-22 = H2-22] ...



... no tax included.

[strollingmolby] 24/11/2022 09:02

Thanks, Piedro. Your H2-22 costs figure seems to be at the £6.3m level - is it missing the Cost of Sales of £3,313k, which would bring Total costs to £9,676k for the half year, and then running broadly parallel with the revenue line?

[piedro] 24/11/2022 08:49

FWIW ...



- increases costs mentioned in the report. Seems that they are hiring in
expectation of something not very clearly explained.
- I hope it is justified. I am reminded of Ergomed {ERGO} that did something
similar but timed a year too soon.

[rivaldo] 23/11/2022 12:50

Worth noting that the iTrinergy acquisition, which cost a net £2.26m, delivered £0.4m PBT in just 5.5 months. That's almost an annualised £0.9m. A pretty impressive return in the first period post-acquisition.

[rivaldo] 22/11/2022 07:27

Indeed - nicely in line and showing huge confidence in the outlook.

A "strong order book", accelerating long-term growth drivers in 5G and cloud computing, an increasing £14.4m cash pile (over 10% of the m/cap), iTrinergy being easily assimilated etc. Imagine how fast CLX can grow once component supply difficulties fully ease and markets stabilise.

[hastings] 22/11/2022 07:25

Yes, all looking good, large net cash position and strong order book in H2.

[masurenguy] 22/11/2022 07:22

Onwards and upwards !

Interim Results

Calnex Solutions is pleased to announce unaudited results for the 6 months ended 30 September 22.

Financial Highlights

GBP000 H1 FY23 H1 FY22 FY22 H1 YOY% change
Unaudited Unaudited Audited
Revenue 12,728 9,251 22,046 38%
Underlying EBITDA 3,466 2,479 6,351 40%
Profit before tax 3,086 2,308 5,973 34%
Basic EPS (pence) 2.78 2.05 5.19 36%
Diluted EPS (pence) 2.67 1.99 5.00 34%
Closing cash including fixed
term deposits 14,436 13,643 15,357 6%

-- Revenue increase a combination of strong underlying growth and the impact of currency movements.

-- Gross margin and Underlying EBITDA margins maintained in line with the prior period, despite the challenging external economic environment.

-- Continued planned investment in product development and operational scalability, to support future growth.

-- £1.3m cash generated in the Period after £2.3m net acquisition cash cost for the iTrinegy acquisition.

-- Solid EPS growth in line with the profit performance for the Period.
-- Interim dividend of 0.31p pence per share to be paid in December.

Operational Highlights

-- Relationship development with hyperscale customers progressing well, with new Network Synchronisation product, Sentry, due to be launched in H2, enhancing product offering for the cloud computing market.

-- Acquisition of iTrinegy Limited, enhancing the Group's position as a leading network emulation test vendor, with integration progressing as planned.

-- Successful mitigation of well-documented, global supply chain shortages to date, shipping scheduled orders as planned.

-- Continued investment in talent globally.

Outlook:

-- Strong order book as we move into H2 FY23.
-- The Board is confident that performance for FY23 will be in line with market expectations.

Tommy Cook, Chief Executive Officer, and founder of Calnex, said: "We are pleased to deliver a strong financial performance during the period, significantly increasing revenue and profit, while continuing to invest in our team's capabilities and offering. We were delighted to successfully complete the integration of the iTrinegy team into the Group during the period. Whilst it is sensible to look to the future with a degree of caution given the continuing component shortages and global macro-economic challenges, the Company's positive trading performance during the period and proven ability to manage component shortages underpin the Board's confidence that the Group's performance for FY23 will be in line with market expectations. The breadth of our customer base across multiple regions, ongoing successful expansion of the team and offering, and wealth of industry connections combine to place Calnex in a strong position to continue to benefit from the underlying long-term growth drivers in the telecoms and cloud computing markets."

[masurenguy] 10/11/2022 07:49

Mike Seidenberg, the new lead manager of Allianz Technology Trust, believes the big positive for technology companies is a shrinking US work force as the numbers of babies and retirees grow. That means businesses will have to turn to technology to deliver their services efficiently and at low cost with US tech spending forecast by Fundstrat to soar to a a record 5.5% of GDP by 2045, compared to 3.6% in 2015. Previous periods of US labour shortage in the 1950s-60s and 90s saw tech shares go ‘parabolic’, says Seidenberg, and there is good reason to believe they'll do so over the next 2 decades.

[rivaldo] 10/11/2022 07:33

A strong Q3 update from Spirent this morning, which bodes well here. Summed up by:

"Strong quarterly trading performance, high win rate and record orderbook"

"Spirent will continue to benefit from the long-term structural growth drivers in our industry as our customers demand more rigorous end-to-end assurance and testing solutions to deliver faster, more resilient, more reliable networks"

[strollingmolby] 07/11/2022 19:46

Thanks, riv - interesting find, hopefully the iTrinegy acquisition will open up new markets and address a new customer base. CLX certainly had high hopes in the FY results.

[rivaldo] 07/11/2022 14:59

Interesting in these times of war to see CLX exhibiting in the USA this month as regards secure military networks:



"Calnex will be exhibiting at I/ITSEC 2022, in the WEST Concourse – Orlando, Florida, USA. November 28th – December 2nd 2022.

Visit our booth #473 to discover how the NE-ONE by Calnex is used to model realistic military networks in secure, controlled environments in order to verify application and system resilience before deployment into real world battlefield network environments.

Learn more about how Governments, Military Organisatizatins and Defense Contractors use NE-ONE Software Defined Test Network technology:

Also good to see iTrinergy at Space-Comm 2022 in Farnborough given the thriving UK space sector's need for secure comms and data:



EDIT - good to see an almost £14,000 buy at 149p just now - a full 1p above the published 148p offer price. Keen.

[rivaldo] 04/11/2022 09:31

Been away on family hols for nigh on three weeks, so good to see the recent bounce here following the positive AGM update and the bullish results and outlook from Spirent.

[2bluelynn] 28/10/2022 10:53

Gap on the chart is filled at 1.20 wait until then I'm my option nearly there ..

[masurenguy] 26/10/2022 17:30

Getting into bargain territory !

[2bluelynn] 26/10/2022 17:20

Gap on the chart at 120 so will wait to buy then I think --gaps tend to get filled

[mammyoko] 26/10/2022 12:13

In case anyone else was wondering, the company has just informed me that they will not be issuing a trading statement this year. Last year's statement was necessary because the Board anticipated that revenue and profits for the full year would be materially ahead of previous expectations.

Consequently, it can be deduced that the company is, currently, trading in line with the Board's expectations as they would be required to issue a statement if it were not. Conversely, it can also be concluded that the company is, currently, not trading ahead of the Board's expectations.

[mammyoko] 21/10/2022 17:00

Engineering Director has been consistent seller - probably personal reasons