Telecommunications equipment specialist Spirent is confident its results next week will reflect tight financial controls and a new proactive business strategy.
Finance director Eric Hutchinson said the company has always had tight financial controls, but ‘recently, we have been taking a much more proactive role by constantly looking for business opportunities instead of concentrating energies on fundraising’. These could include mergers, partnerships or acquisitions like its #1.1m purchase of Hekimian last November.
Hutchinson added: ‘Very high growth activities require large investment and working capital, a classic scenario that technology companies have found themselves in recently’, he explained.
But Spirent has been able to balance spending and earnings. ‘We generate cash yet we still invest over 12% of our revenues in development,’ he said.
Prior to being appointed FD at the beginning of last year, Hutchinson held several finance positions in the company.
He said: ‘The finance role within the company is of importance. It’s there to enable the commercial managers to take advantage of the opportunities and develop the business.
‘My role is not only looking after the money, but also helping to make decisions (about company strategy),’ he remarked. His role also includes managing tax affairs and credit management.
Employed by the company since 1983, Hutchinson has been able to get to know different people in key areas of the international business. Working for Spirent for such a long time, however, has ‘not been a narrow experience’, explaining that, although the company has been in existence for a long time, ‘we’re constantly reinventing ourselves’.
‘We developed our telecommunications technology from nothing in 1995 to the position that now we entered the FTSE-100 index,’ he added.
According to Hutchinson: ‘Accounting training is a very good basis for anybody to develop into the business world.’
Spirent manufactures network testing equipment and supplies it to operators, such as Cisco Systems. It also develops routers and switches for traffic on the internet.
‘Carriers are now trying to differentiate themselves by showing they can provide reliable networks. With our systems, they can give assurance that their services can be delivered,’ said Hutchinson. ‘Trillions of US dollars are being invested in this sector at the moment,’ he added.
The company employs 6,500 people in 42 different countries.
The company’s website is at www.spirent.co.uk
Interims to 30 June, 2000
Profit after taxation: #15.4m
Current market capitalisation: # 1.1bn
Nicholas Brookes, chief executive, appointed July 1995.
Eric Hutchinson, finance director, appointed January 2000
Auditor: Ernst & Young
Company profile: Listed on the FTSE-100 and the techMARK 100 indices, Spirent is a network technology company specialising in testing systems for the telecommunications industry. The company, founded in 1949, changed its name from Bowthorpe in May 2000.
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