Spirent Communications PLC (LON:SPT) has not changed its forecasts for any coronavirus impact as it continues to see rising demand for 5G and high-speed network connection and satellite positioning equipment.
The company dual sources its components and raw materials so has not assumed any financial impact yet from the Covid-19 disruption being seen elsewhere.
Spirent added it still expects to see steady profitable growth in 2020 with a target of mid-single-digit revenue improvement and an operating margin target of 17-19%.
Sales rose by 6% to US$504mln in 2019. Orders over the year were 13% higher at US$532mln with a quarter due for delivery more than a year ahead.
Underlying profits rose 20% to US$93.9mln while the cash balance soared by 50% to US$183mln.
The dividend for the year rose by 20% to 5.39c.
Broker Liberium added it expects Spirent’s strong revenue and earnings momentum to continue in 2020 and beyond.
“The 400G Ethernet testing cycle remains strong with the company addressing a broader customer base.
“With drones and missiles becoming an increasingly important part of US defence strategy we do not expect any slowdown in Spirent’s high margin Positioning business, though we acknowledge that visibility in this area is low.”
The broker’s price target rises to 255p from 238p.
Shares were 9% higher at 232.5p as midday.
— adds share price, broker comment —