AGM Statement

22 August 2024

Calnex Solutions plc

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

AGM Statement

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 operations and trading ahead of its Annual General Meeting ("AGM") taking place at 9am today.

Highlights

·    Launch of major Paragon-Neo release on track for H2 FY25, focused on 800Gb/s synchronisation testing

·    Successful launch in H1 FY25 of SNE-X with 400GbE to capitalise on customer demand across the cloud computing and data centre markets

·    New channel partner network now operational

·    Telecoms market has remained challenging, but the Board is encouraged by early successes of Calnex's new product releases and with continued tight cost control the Board anticipates the Company's performance in FY25 will be in line with market expectations

Operational update

The launch of Calnex's major Paragon-Neo release remains on track for H2 FY25, with good progress made across the project. The first pre-production unit is undergoing testing with the customer and initial feedback has been positive. This Paragon-Neo release is focused on the area of 800Gb/s synchronisation testing, the next generation of high-speed Ethernet, and the Company is encouraged by the level of customer enquiries to date.

In H1, Calnex successfully launched SNE-X with 400GbE interfaces to capitalise on customer demand across the cloud computing and data centre markets. The product is the first network emulator of its kind for AI infrastructure and other high-performance computing networks.

As previously announced, following the review of Calnex's sales channels and channel partner arrangements earlier this year, the Board took the decision to terminate its reseller agreement with Spirent and commenced discussions with new and existing channel partners to facilitate changes to strengthen the current arrangements. The Company is pleased to confirm that its new channel partner network is now operational, covering the Group's territories of North America, Europe, Middle East and Africa, as well as Asia-Pacific, including those which were previously covered by the Spirent relationship.

Following the successful transition of sales and channel partner arrangements, the Company is now seeking to establish direct supplier agreements with several of its key customers to enhance these relationships. The Board remains confident that the new multi-channel arrangement will be earnings enhancing.

Market outlook and trading

As anticipated, the telecoms market has remained challenging throughout the first four months of FY25. While activity levels across the sector are generally expected to stay at subdued levels for the remainder of the year, the fundamental need for the Company's testing solutions remains strong. The Board is encouraged by the early successes of Calnex's new product launches, which are expected to underpin the Company's return to growth in H2 FY25.   

Calnex continues to maintain tight cost control measures and benefit from a healthy balance sheet and the Board anticipates that the Company's performance in FY25 will be in line with market expectations.

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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.