By Kristy Dorsey

Scotland’s newest quoted company has reported full-year figures ahead of expectations as the continuing roll-out of 5G and growth of cloud computing drives demand for its telecoms testing equipment.

Calnex Solutions, which joined London’s AIM market in October of last year, saw revenues for the 12 months to the end of March rise by 31 per cent to £18 million, with profits before tax up 22% at £3.6m. Founder and chief executive Tommy Cook described it as an “exceptional year”, with growth across all product lines.

Revenues were enhanced by an estimated £1m of “pull through” of orders by customers looking to use up their capital expenditure budgets during the height of the pandemic, rather than risk losing them to possible future spending cuts. Profits were boosted by approximately £400,000 of savings on corporate travel that didn’t take place amid lockdown restrictions.

Mr Cook said the company’s salespeople are expected to get back on the road in the second half of this year, assuming the Covid pandemic continues to subside in its main markets. Even taking account of the increase in travel costs, plus the impact of accelerated capital spending by clients, Mr Cook said the business is well-positioned for further growth in the coming year.

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“As demonstrated this year, as well as in previous years, our growth strategy and business model provide a strong platform for sustainable growth,” he said. “Looking ahead, the underlying market growth drivers provide us with confidence that the long-term demand for telecoms test and measurement instrumentation and solutions will continue to expand.”

Based in Linlithgow, Calnex develops telecoms testing equipment that can measure the synchronisation within a network down to one billionth of a second. Its customers include equipment vendors such as Cisco, Huawei and Ericsson, along with network operators such as BT, China Mobile and AT&T.

It also works with component manufacturers, as well as a growing band of “hyperscale” and enterprise clients such as Microsoft, Tencent, Facebook and Apple.

The company has continued to hire throughout the pandemic, having accelerated expansion of its business development and R&D teams. It now employs 107 people, having added 25 staff since the outbreak of Covid.

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Mr Cook said that by the end of the current financial year, headcount will likely be in the region of 125 employees.

The company has cash reserves of nearly £12.7m at the end of March. Ashleigh Greenan, chief financial officer at Calnex, said £4.9m of this was from the proceeds of last year’s IPO.

Mr Cook said the company is constantly on the look-out for suitable acquisition targets, though nothing is currently imminent on the horizon. However, new releases across all three of its product fields in the coming months will support organic growth.

“The sales guys love it when we come out with new things,” he said. “It gives them something to go and talk to the customers about.”

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At the time of its flotation last year, Calnex became the first Scottish company in more than two years to achieve a London listing. Mr Cook, who set up Calnex in 2006, received £2.8m from selling down part of his stake in the business as part of the flotation. He continues to own approximately 21% of the company’s equity.

He said he was “delighted” to present the group’s maiden full-year results in what has been an “exceptional” year for the company.

“Not only did the group experience growth across all product lines and achieve sales of £18m, exceeding our initial expectations for the year, but we succeeded in delivering this strong performance whilst navigating the global pandemic and starting our next chapter as a public company,” he said.

Shares in Calnex, which have put in a strong performance since they joined the market priced at 48p, closed 4p lower yesterday at 111.5p.