Spirent Communications plc Annual Report 2024
Spirent Communications plc
Annual Report 2024
Beyond
Boundaries
Explore our spotlights featured throughout this
report to discover how Spirent, the leading
global provider of automated test and assurance
solutions for networks, cybersecurity and
positioning, is pushing beyond boundaries.
With a strong track record of innovation and a
dedicated team, Spirent is driving momentum and
expanding its reach with pioneering solutions that
shape the future across a wide range of industries.
Beyond Boundaries
Discover how in our spotlights
featured throughout this report
Strategic report
1. Our strategic roadmap
2. 2024 highlights
3. Investment case
4. Spirent at a glance
6. Spotlights
8. Chairman’s statement
10. Chief Executive Officer’s review
12. Spotlights
14. Our markets
16. Our business model
18. Spotlight on 5G
20. Our strategic priorities
22. Key performance indicators
24. Stakeholder engagement
28. Spotlights
30. Our people and culture
32. Sustainability
40. Operating review
48. Financial review
55. Principal risks and uncertainties
61. Non-financial and sustainability
information statement
Corporate governance
62. Chairman’s introduction
to governance
64. Board of Directors
66. Board statements
67. Directors’ statement on
corporate governance
74. Nomination Committee report
77. Audit Committee report
83. Report on Directors’
remuneration
109. Directors’ report
113. Directors’ responsibilities
statement
Financial statements
114. Independent auditor’s report
126. Consolidated income statement
127. Consolidated statement of
comprehensive income
128. Consolidated balance sheet
129. Consolidated statement of
changes in equity
130. Consolidated cash flow
statement
131. Notes to the consolidated
financial statements
171. Parent Company balance sheet
172. Parent Company statement
of changes in equity
173. Notes to the parent Company
financial statements
191. Full list of subsidiary undertakings
Other information
193. Financial history
195. Alternative performance
measures
197. Shareholder information
198. Glossary
200. Contact details
Our purpose and ambition
Spirent’s ambition is to be the global leader and trusted partner for innovative technology test
and assurance solutions.
Read more on pages 4 and 5
Delivering value across the lifecycle
We stand behind our customers’ promise to deliver a new generation of innovative products and
services to their customers. Our automated test and assurance solutions support them across every
phase of the lifecycle, from development in the lab to pre-deployment and live operation, ensuring
that new technologies deliver.
Read more on pages 14 to 17
Sustainability values
We manage our material sustainability impacts and opportunities in alignment with the values we have
captured in our FuturePositive programme:
Promise of a sustainable future
Net zero carbon
Promote diversity and invest in people
Operate responsibly
Be accountable and transparent
Read more on pages 32 to 39
Culture/values
Our values are the bedrock of our culture, guiding how we work with one another and our customers.
Our suite of flexible working practices supports employee wellbeing, reduces our carbon footprint,
creates office environments that encourage knowledge sharing, innovation and collaboration, and
helps us attract and retain talent.
Read more on pages 30 and 31
Strategic priorities
We are executing on our live network opportunities, diversifying our customer base to help reduce
cyclicality, increasing our recurring revenue streams, and driving services and solutions across our
portfolio. Our strategy is built on three pillars:
Read more on pages 20 and 21
Innovation for GrowthCustomer Centricity Operational Excellence
Our strategic roadmap
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
STRATEGIC REPORT
$479.0m
(2023 $477.0m)
Order intake
2
$312.1m
(2023 $293.7m)
Orderbook
1
$460.2m
(2023 $474.3m)
Revenue
72%
(2023 72%)
Gross margin
$46.2m
(2023 $45.2m)
Adjusted operating profit
3
$13.8m
(2023 $22.9m)
Reported profit before tax
7.75 ¢
(2023 7.5 5
¢
)
Adjusted basic earnings per share
4
$141.8m
(2023 $108.1m)
Closing cash
2024 highlights
Financial highlights
• Ongoing challenging market conditions impacted revenue
which was $460.2 million for the year (2023 $474.3 million).
• We have accelerated our focus on non-telco end
markets, with positive progress with hyperscaler
and enterprise customers, as well as more important
Financial Services wins.
• 6 per cent orderbook growth to $312.1 million
(2023 $293.7 million).
• Robust pricing, supply chain management and
product mix led to strong gross margin delivery being
maintained at 72 per cent (2023 72 per cent).
• Opex initiatives delivered considerable savings in 2024.
• Adjusted operating profit of $46.2 million slightly ahead
of 2023 (2023 $45.2 million). $18.2 million of transaction
costs caused the profit before tax to be down from
$22.9 million to $13.8 million.
• Strong balance sheet maintained, $141.8 million
cash (2023 $108.1 million after dividend payments
of $46.5 million and $71.6 million of share buybacks).
Operational highlights
• Important new product launches with immediate wins in
fast-growing markets, including Data Centre AI network
testing and PNT simulation for navigation warfare, lunar
missions and automotive positioning for vehicle safety.
• Secured multiple new logo wins in Financial Services,
successfully demonstrating our strategy to diversify
outside of telecoms and the broader applicability of
our lab and test automation portfolio.
• Secured several important lab to live lifecycle test,
automation and assurance wins with major Tier-1
service providers in Europe and continued to expand
our footprint across North American service providers
including multi-year deals.
• Secured 415 5G-related new contracts from 138
customers despite macroeconomic headwinds in the
telecommunications market.
• Continued to develop our world-leading Wi-Fi test solutions
business, bringing to market the most comprehensive
test solution for the next-generation, Wi-Fi 7 standards.
Notes
1. Orderbook is an alternative performance measure as defined on page 195.
2. Order intake represents commitments from customers in the period to purchase goods and/or services that will ultimately result in recognised revenue.
3. Before acquired intangible asset amortisation, share-based payment and other adjusting items amounting to $35.9 million in total (2023 $26.8 million).
4. Adjusted basic earnings per share is based on adjusted earnings as set out in note 11 of Notes to the full year consolidated financial statements.
Items with notes 1 to 4 are non-GAAP alternative performance measures; see pages 195 and 196 for more detail.
Despite ongoing challenging market conditions, fourth quarter trading saw a good uptick of order growth on the same
period in 2023. We saw early signs of market recovery as second half order growth mitigated the weaker first six months,
bringing the full year orders to a level comparable to 2023. As a result, we delivered 5 per cent revenue growth in the
second half of 2024.
On the 28 March 2024, the Boards of Keysight and Spirent announced that they had reached agreement on the terms of
a recommended cash offer for the entire issued ordinary share capital of Spirent.
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Investment case
Uniquely
positioned,
strategically and
operationally
Enduring market drivers
We are a critical enabler in the rapid shift to a hyperconnected
world, with robust market drivers that include migration to
5G and beyond, digital transformation initiatives in banking
and large enterprises, hyperscalers expanding into the telco
space and upgrading data centres for artificial intelligence
(AI) workloads, and location awareness as a key enabler.
Only vendor addressing the entire
technology lifecycle
We leverage the expertise and test methodologies developed
in the lab to address our customers’ live network test
and assurance challenges, enabling us to secure larger,
multi-year contracts that enhance our revenue visibility
and predictability and help reduce cyclicality.
Key enabler of 5G and
beyond transformation
Despite caution in the current macroeconomic environment,
operators’ investment in their complex 5G networks is
ultimately non-discretionary, with spectrum and network
capital investment commitments already in place. Our
opportunities from 5G Standalone, 5G Advanced and 5G
private network rollouts are still in their infancy.
Disciplined investment strategy
Our customer intimacy and governance around our
portfolio management ensure that we focus our investments
on the faster-growing market areas that are most critical
to our customers, both organically and through highly
selective, earnings-accretive acquisitions.
We go-to-market differently
Our customers are the world’s leading service providers,
technology companies and enterprises. We have evolved
our customer relationships, engaging in more consultative
selling and becoming a trusted partner that understands our
customers’ newer, larger business challenges and addresses
them with solutions and services, not just products.
Robust, sustainable operating model
We focus on retaining our key talent while pursuing a
policy of diversity and inclusion, fuelling collaboration
and leading-edge innovation. We maintain a proactive
approach to managing our supply chain. Our commitment
to sustainability led to us achieving CarbonNeutral
®
Company certification in 2024.
We are uniquely positioned to seize
opportunities, even in the face of
macroeconomic uncertainty, due
to the strength of our differentiated
model and proposition. Leveraging
our unique technology leadership
and subject matter expertise, we are
focused on market opportunities
with strong and enduring drivers,
and on further diversifying our
customer base to reduce cyclicality.
Our differentiated approach provides
us with distinct competitive advantages.
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STRATEGIC REPORT
Spirent at a glance
Global leader,
innovator and
trusted partner,
unlocking new
possibilities
Lifecycle Service Assurance
An established global leader in lab-based testing of
5G mobile core networks, cellular and Wi-Fi devices,
as well as in lab and test automation solutions for
the telecom industry and enterprises. The world-
class innovation of our Lifecycle Service Assurance
segment has enabled us to bring to market
“live” solutions that provide end-to-end visibility,
actionable insights and automated troubleshooting
to radically simplify turn-up and assurance
of complex networks and services, reducing
time and cost.
$181.0m
revenue in 2024
(2023 $199.1m)
Networks & Security
An industry leader in high-speed Ethernet/internet
protocol performance testing, our Networks &
Security segment develops test methodologies,
tools and services for virtualised networks, cloud
and artificial intelligence networking infrastructure,
application performance and proactive security
validation. As the acknowledged market leader in
global navigation satellite system test and simulation
solutions, we are applying our innovation and expertise
to emerging positioning, navigation and timing growth
opportunities, such as low earth orbit satellite systems.
$279.2m
revenue in 2024
(2023 $275.2m)
Read more on pages 40 to 43 Read more on pages 44 to 47
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Honolulu, HI
Calabasas, CA
Santa Clara, CA
Plano, TX
Frederick, MD Holmdel, NJ
Paignton, UK
Crawley, UK
Beijing, China
Bangalore, India
1,000+
customers served in 2024
9
significant
engineering sites
1,490
employees
50+
countries
Head office
Lifecycle Service Assurance
39%
Networks & Security
61%
Americas
60%
Asia Pacific
27%
EMEA
13%
Sustainability recognition
Revenue by
segment
Revenue by
geography
Revenue by
customer
Largest customer
7%
Other top ten customers
27%
Customers outside top ten
66%
Read more on pages 32 to 39
CDP rating 2024
Climate change: B
EcoVadis bronze
rating 2024
FTSE4Good
member 2024
CarbonNeutral
®
Company certification
2021, 2022, 2023, 2024
FTSE ESG 100
Select member
2024
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Resilient
Testing 5G resilience in
cloud-native networks
A major North American telecommunications and media provider has been seeking new ways to
rigorously test the resilience of its pre-deployed 5G Standalone (SA) core network. Partnering with
Spirent, the company embarked on an innovative programme to validate the robustness of its 5G
cloud-native architecture through chaos-based testing.
Utilising the Spirent Landslide™ CNF Resiliency Test Solution allows the operator to intentionally
introduce failure scenarios in its network, gaining critical insights into recovery mechanisms,
quality of experience, and automated response to disruptive events. Testing scenarios include
network and storage connection loss, central processing units and memory stresses, and
infrastructure resource depletion.
The success of the initiative is now part of an extended engagement with Spirent to further refine
test automation, ensure 5G core network robustness and prepare for scaling future deployments.
Spotlight:
Cloud-native resilience
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Revolutionising smart
manufacturing with 5G LAN
A major global data centre and 5G provider is driving innovation in smart manufacturing by
implementing a 5G local area network (LAN) solution with enhanced Ultra-Reliable and Low
Latency Communications, critical for the company’s manufacturing vision.
Embarking on a three-year project with Spirent’s Landslide solution, the provider is developing
a robust 5G infrastructure to support uninterrupted communication among robotic arms,
automated guided vehicles and other workstation devices, with seamless data exchange
without the need for traditional cabling. This 5G LAN setup brings unique advantages by
supporting AI and machine learning within the manufacturing environment, enabling data
slicing between different production lines for optimised workflow – a capability essential for
scaling automation.
The collaboration positions both companies as leaders in private 5G deployment, enabling
a next-generation, efficient manufacturing model that showcases the potential of 5G LAN in
transforming industrial production, serving as a model for similar initiatives in the APAC region
and beyond.
Smart
Spotlight:
Transform manufacturing
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STRATEGIC REPORT
Chairman’s statement
I am pleased to present our
Annual Report for the year
to 31 December 2024.
Spirent’s future as part of a larger firm and
a touch of regret
We announced on the 28 March 2024 a deal in which
Spirent would be sold to Keysight Technologies, Inc.
(“Keysight”). That deal was endorsed by our shareholders on
22 May 2024. On 2 December 2024, Keysight announced
that, to secure regulatory approval, it would divest our
High-Speed Ethernet business, a decision that would not
have been made but for the Keysight transaction. We
continue to work with interested regulators to secure the
clearances needed to complete the deal.
I am encouraged for the future of our employees as they
join a larger firm which will be able to take our products
and technology to a wider market. However, I must express
some personal regret. Spirent (originally Bowthorpe plc)
was founded in 1936 by Jack Bowthorpe and was originally
listed on the London Stock Exchange in 1955. My regret
is seeing another global technology and engineering
leader leave the London Stock Exchange as too many
other businesses have done in recent years. New owners
who see the intrinsic value of assets like Spirent will benefit
as the telecommunications market returns to growth. It
is my sincere hope that businesses such as Spirent will
continue to be started in the UK and will in time look to
list on the London Stock Exchange and help secure the
UK’s place as a global technology leader. To do so, the UK
market will need to attract investors who embrace future
technologies and support the risk taking required to grow
such businesses into global leaders.
Performance during the year
2024 has proven to be a year of two halves. Our first half
performance was weak as we continued to wrestle with a
constrained telecoms market, which very severely impacted
our two biggest customer segments, the telecom service
providers and the network equipment manufacturers.
The announcement of the transaction with Keysight
negatively impacted our performance even further as
we saw hesitancy as customers absorbed the news of
the acquisition.
A different
future
Sir Bill Thomas
Chairman
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STRATEGIC REPORT
However, in the second half of 2024 we began to see some of
our customers spending more freely and after a very positive
fourth quarter order intake performance, our orders for the
full year were very slightly ahead of the prior year.
It is a testament to our employees’ resilience and
continued dedication that we were able to continue releasing
market-leading products and solutions which deliver real
value to our customers. Revenue grew 5 per cent in the
second half of the year compared to the same period in
2023 and our orderbook backlog continued to grow. Full
year revenue closed at $460.2 million (2023 $474.3 million).
Adjusted operating profit increased by 2 per cent. Reported
profit before tax was down from $22.9 million to $13.8 million
due to transaction costs of $18.2 million.
We ended the year with cash of $141.8 million.
Our employees and the right culture
This year, the announcement of our deal with Keysight without
doubt caused considerable uncertainty for our customers and
our colleagues.
In spite of that uncertainty, I have been humbled by the
continued unstinting commitment of our colleagues. For some,
this is because we have long-serving employees who have
dedicated much of their careers to the Company, and they
are hugely committed to supporting the teams they have
hired, nurtured and promoted over the years. For others, their
motivation is to continue to deliver innovative world class
solutions and outcomes to our customers. On behalf of the
Board, I thank every one of our colleagues, no matter their
personal motivation, for continuing to innovate and deliver
world-leading products and solutions to our customers and
for continuing to build an environment in which individuals are
respected, challenged and supported to realise their potential.
Outlook
There now appears to be some strength returning to our core
markets. Our orderbook has started to see renewed growth.
The solutions we continued to invest in during constrained
times, are winning in the marketplace. I am confident that we
will pass the business to its new owners in good health and on
an upward trajectory.
I expect this will be my last note to shareholders as Chairman
of Spirent as an independent Company. It has been a
pleasure to serve in that role and I wish our employees well,
and I am certain that Keysight will be a good custodian of
Spirent’s business.
Sir Bill Thomas
Chairman
4 March 2025
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STRATEGIC REPORT
2024 was a year of two halves with
increasing progress seen in the latter
part of the year.
Despite macroeconomic challenges in the first half of the
year and some customer hesitancy due to the pending
acquisition by Keysight, we demonstrated resilience and
adaptability. By staying true to our strategic priorities
and focusing on our strengths, we rebounded strongly
in the second half, delivering value to our customers
and stakeholders alike.
The results in 2024 speak to the dedication of the whole
global Spirent team which has yet again demonstrated
its commitment and operational resilience in the face of a
challenging market environment while also working closely
with Keysight to conclude its acquisition of the Group. It
has been a very busy year in which we delivered a good
performance, and I would like to personally thank all of
Spirent’s staff for their continued support.
Market overview
The macroeconomic environment in 2024 continued to
present headwinds, particularly in the telecom sector,
with ongoing budget pressures and cautious capital
expenditures. Both the economic environment in China and
the ongoing trade compliance landscape continues to be
challenging. We saw material reduction in sales from China
whilst other parts of the global reach improved. Additionally,
the announcement of our acquisition by Keysight introduced
some hesitancy among customers in certain sectors.
However, our diversification strategy and steadfast
commitment to our core markets enabled us to navigate
these challenges effectively.
We capitalised on growth in high-potential future growth
areas, including AI-driven data centres, low earth orbit
(LEO) satellites, and positioning, navigation and timing
(PNT) technologies. These markets provided new avenues
for growth, allowing us to offset some of the cyclicality in
telecom spending.
Strategy
To realise our ambition to be the global leader and trusted
partner for innovative technology test and assurance
solutions, our strategic pillars remained: Customer Centricity,
Innovation for Growth and Operational Excellence.
Chief Executive Officer’s review
Order intake
1
$479.0m
(2023 $ 477.0m)
Orderbook
2
$312.1m
(2023 $293.7m)
Revenue
$460.2m
(2023 $474.3m)
Resilient growth
amidst change
Eric Updyke
Chief Executive Officer
Notes
1. Order intake represents commitments from customers in the period
to purchase goods and/or services that will ultimately result in
recognised revenue.
2. Orderbook is an alternative performance measure as defined
on page 195.
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Customer Centricity
Throughout the year, we deepened our relationships with
customers, providing solutions that addressed their most
pressing challenges. By broadening our customer base
and delivering measurable outcomes, we maintained
their trust during this period of transition. The Financial
Services sector stood out as a key area of growth, with
major wins underscoring the applicability of our lab and test
automation solutions.
Innovation for Growth
2024 marked a significant milestone in innovation with
the launch of our AI High-Speed Ethernet and PNT X™
platforms. The AI High-Speed Ethernet platform, the first
of its kind, has been well received, enabling customers to
address next-generation data centre challenges. Similarly,
the PNT X platform has strengthened our leadership in
positioning technologies, gaining traction in government,
LEO satellite and automotive markets.
Our investments in R&D and product innovation continued
to differentiate us, earning industry recognition such as the
Interop Tokyo “Grand Prize” for our AI emulation solution.
Operational Excellence
Cost-saving initiatives and real estate optimisation
measures ensured operational efficiency without
compromising on critical investments.
Unwavering focus on cash meant we closed the year
with a strong balance sheet.
Capital allocation approach
Our capital allocation policy remains unchanged. We invest
in R&D to maintain and expand our leadership positions
in the market, and in inorganic investments where we see
attractive opportunities that support our strategic growth
agenda, whilst maintaining a robust balance sheet.
Preparing for the future
As we look ahead to 2025 and the completion of the
acquisition by Keysight, we remain committed to supporting
our customers and employees through this transition. Our
strong foundation, innovative portfolio and talented team
position us well to maintain our leadership and deliver
sustainable value in the years to come.
Eric Updyke
Chief Executive Officer
4 March 2025
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Secure
New levels of testing capability
to help keep customer
transactions safe
Financial Services infrastructure is vital to our everyday lives, but with increasingly complex
traffic patterns and new security threats emerging daily, a leading global merchant acquirer
bank turned to Spirent to bolster its cyber defences. Enabling businesses around the world to
securely handle tens of thousands of e-commerce, mobile and point-of-sale payments every
day, it wanted to introduce real-world application and threat traffic generation to its testing
regime to test its next-generation firewalls.
With its extreme scalability, ease of use and flexibility to generate hyper-realistic application
traffic, the customer chose Spirent’s CyberFlood™, a sophisticated solution built for the complexity
of the modern threat landscape. It enables the customer to test its network security controls
under real-world conditions in a lab setting to safely identify and pre-empt potential attacks and
performance bottlenecks and optimise its defences accordingly, while also providing additional
benefits in terms of assurance, budgetary planning and important regulatory compliance.
Spotlight:
Bolster defences
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Empowering 5G core and MPLS
Services with high-performance
network solutions
One of India’s fastest-growing network equipment manufacturers is strengthening its position
in the global telecom market through an ambitious project to build a robust 5G core and deploy
over 10,000 nodes for multiprotocol label switching (MPLS)/virtual private network services.
With significant orders from leading service providers and government entities, the provider
sought a rigorous testing solution to validate its new 4G and 5G core offerings, ensuring high
performance and reliability for both domestic and international markets.
To achieve this, it needed a testing setup capable of replicating high-demand, real-world
conditions. Spirent’s Landslide and TestCenter
®
solutions provided a lab environment to
assess Layer 3, MPLS and segment routing features, enabling comprehensive testing across
varied network conditions and building confidence in the solutions before live deployment.
By validating the control and data planes of its network nodes, the company can confidently
demonstrate its products’ load-handling capabilities, essential for serving critical live networks.
Robust
Spotlight:
Ensure robustness
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STRATEGIC REPORT
Spirent invests to sustain
and expand our leadership
and support our profitable
growth in key technologies
and growth markets.
Our markets
Unlocking new
opportunities
We are evolving deeper and broader partnerships with
an increasingly diverse base of customers, helping them
address their larger business problems with innovative
solutions and services, not just products. We are leveraging
subject matter expertise gained from our leadership in
lab testing and validation to address our customers’ live
network challenges, as they advance towards complex
cloud-native 5G Standalone networks and employ
continuous integration and continuous delivery models.
We are applying our industry-leading expertise to key
emerging areas such as data centre networking to support
artificial intelligence (AI) workloads, 5G private networks,
automation and regulatory compliance testing for Financial
Services and low earth orbit (LEO) satellite constellations.
Diversifying our markets and our customers provides us with
new opportunities to grow and to build additional recurring
revenue streams that support sustainable, profitable growth.
Non-terrestrial networks and PNT
Market driver
Growth in non-terrestrial networks (NTN) and low earth
orbit (LEO) mega satellite constellations is exponential
with over 7,390 satellites in orbit, and over 100,000
satellites estimated to be in orbit by 2030, delivering
mobile broadband, emergency services and Internet
of Things connectivity directly to devices, while offering
resilient positioning, navigation and timing (PNT) and
Earth observation services. Being close to Earth, these
new LEO constellations enable more robust and secure
connectivity to remote, underserved communities,
mission-critical industries and military theatres.
Opportunities for Spirent
Space is an incredibly complex environment, so it is
critical to validate satellite communications and PNT
performance in the lab before deployment. Numerous
technology, performance and resilience challenges must
be tested, from signalling delays and timing variations
to large Doppler shifts and signal degradation from
atmospheric conditions and interference, through to
spoofing and jamming attacks.
Our response
Spirent, as the industry leader in satellite PNT and
end-to-end mobility testing, is well positioned to help
the industry deliver on NTN’s promises and bridge the
technology divide between satellite providers and
mobile operators. Spirent is already deeply engaged
with leading players across the ecosystem, helping
to test the complex performance and resiliency
requirements of a new generation of commercial
and military SATCOM and PNT services.
$5.24bn
Global PNT solution market spending by 2033,
growing at a compound annual growth rate (CAGR)
of 10.85 per cent from 2023 to 2033.
Source: Research and Markets, July 2023.
Emergency
<$100 million
SMS
+$100 million
Voice
+$1 billion
Data
+$10 billion
Source: Analysys Mason/NSR.
Analysys Mason estimate a $137 billion revenue opportunity (cumulative
between 2022 to 2032) for direct-to-device (D2D) SATCOM services.
3GPP
Release 17
3GPP
Release 18
20222023202420252026202720282029203020312032
60,000
50,000
40,000
30,000
20,000
10,000
0
USD million
Satellite D2D consumer segment revenue
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Data centre networking for AI
and 800G Ethernet
Market driver
The rapidly increasing appetite for applications
such as cloud computing, streaming services and
a new wave of AI workloads, especially generative
AI, are driving bandwidth demands ever higher.
Cloud service providers are redesigning their AI
infrastructure, with Ethernet adoption starting to
grow as the new AI networking fabric of choice, to
support large-scale learning clusters which require
high bandwidth, low latency connectivity, and for
inferences which require low latency.
This is all stimulating rapid evolution in Ethernet
backbones and interconnects in data centres
that underpin the cloud and provide support for
enterprises, driving refresh cycles from 400G to 800G,
as well as early 1.6 terabit research and development.
Opportunities for Spirent
With the rapid acceleration towards 800G and
the need to support novel AI traffic workloads,
customers are demanding higher-density testing
capabilities. Flexibility is needed to validate the
next generation of data centre AI fabrics, cloud
computing and streaming service, for performance
and latency of data centre switches, and for the
latest generation of terabit core routers.
Our response
Spirent has developed the industry’s first AI traffic
emulation platform for Ethernet and launched the
industry’s highest-density, award-winning multi-rate
800G high-speed Ethernet test solution, leveraging
our decades of leadership in Ethernet testing.
Spirent’s AI traffic emulation and 800G solutions helps
accelerate adoption across next-generation chipsets,
routers, switches, data centre fabrics and lays
the foundation for future 1.6 terabit evolution.
Financial Services – digital
transformation and
operational resilience
Market driver
Financial Services organisations are embarking on
large-scale digital transformation and automation
programmes driven by competitive pressures,
heightened security risks, legacy IT systems and
a heritage of costly and inefficient siloed labs and
manual testing processes.
This is compounded by the need for continuous
regulatory compliance and certification testing,
especially around operational resilience, while
meeting aggressive sustainability targets across
growing IT and data centre real estates.
Opportunities for Spirent
Manual methods for testing enterprise networks,
regulatory compliance and the provision of new
digital services are no longer viable because of the
complexity, speed and frequency at which increasingly
disaggregated networks need to be updated.
By automating test lab capabilities, world-leading
Financial Services companies will be able to
significantly accelerate delivery of new products,
version upgrades and services to their customers,
while ensuring strict compliance and benefiting
from major productivity gains and cost savings.
Our response
Spirent’s proven lab and test automation solutions are
fully applicable to these transformation programmes
and to continuous testing within enterprise sectors,
including Financial Services. This expanded market
opportunity for Spirent was further showcased by
a number of large deals won with a leading global
Financial Services organisation in 2024.
Banking, Financial Services and Insurance (BSFI)
market dynamics
$371.51bn
Digital transformation spending by 2033, growing at
a CAGR of 16.63 per cent from 2024 to 2033
1
.
$8.79bn
Robotic process automation spending by 2030
to automate repetitive tasks, streamline complex
processes, and reduce human errors, growing at
a CAGR of 39.4 per cent from 2023 to 2030
2
.
Sources:
1. Precedence Research.
2. Grand View Research.
Source: Dell’Oro Group AI Networks Report.
Half of the Ethernet switch port shipments in AI back-end networks
are to be 800Gbps by 2025 and 1,600Gbps in 2028, showing a
very fast migration to the highest speeds available in the market.
Forecast (2024–2029) – Data centre AI back-end
Ethernet networks
2024 2025 2026 2027 2028 2029
Port Shipments in Millions
≤100Gbps 200Gbps 400Gbps 800Gbps
1,600Gbps ≥3,200Gbps
15
Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Our business model
Empowering industry leaders
to innovate faster and smarter
We accelerate our customers’ technology journeys from
concept to reality. We empower them to innovate faster
and smarter across every phase of the lab to live lifecycle,
from development to operation.
Using our
resources
effectively
Financial strength
To invest in research
and development
Intellectual property
Protected IP and patents
Organisational capital
Unique systems and processes
Human capital
Talented and driven workforce
Social capital
Strong partnerships with
customers and suppliers
O
p
t
i
m
i
s
e
u
s
e
r
e
x
p
e
r
i
e
n
c
e
A
c
c
e
l
e
r
a
t
e
t
i
m
e
t
o
m
a
r
k
e
t
R
e
d
u
c
e
c
o
s
t
a
n
d
c
o
m
p
l
e
x
i
t
y
O
p
e
r
a
t
e
D
e
v
e
l
o
p
D
e
p
l
o
y
Harden
security
defences
Lab
Live
16
Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Innovate with confidence
Telecom and
financial digital
transformation
AI networking
and 800G for
data centres
The next wave
of 5G, Wi-Fi and
the cloud
Non-terrestrial
networks and
LEO satellites
Spirent’s unique value
We Unblock
development for
faster releases
Our automated test and digital
twin solutions realistically model
real-world networks so providers
can rapidly validate new concepts
for artificial intelligence (AI) data
centre networking, 5G Standalone/
Advanced, Wi-Fi 7, next-generation
positioning, non-terrestrial networks
(NTN), and more. Our managed
solutions offer our critical technology
and methodology skills and expertise,
allowing customers to streamline
their labs and testing.
We Unlock
agility and
cost savings
Our continuous testing solutions
and automated test frameworks
empower our diversified customer
base across industries such as
telecom and Financial Services
to transform legacy testing
workflows and silos into automated,
collaborative test environments.
This enables supplier ecosystems
to work together seamlessly,
improving agility, accelerating
releases and increasing resource
and energy efficiency.
We Unleash
new services
and revenues
Our active continuous monitoring
solutions create a foundation
for a new generation of AI, NTN,
5G, Wi-Fi 7, and positioning
services that offer high-growth
revenue opportunities. We enable
service differentiation across new
dimensions: latency, loss, security,
scalability and managed service
level agreements. Our proactive,
automated root cause isolation
allows customer issues to be resolved
before customers are impacted.
17
Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Spotlight on 5G
Enterprise private 5G networks and AI
The market for enterprise private networks saw steady
adoption throughout 2024 thanks to rising demand from
sectors such as manufacturing, transport and mining, and
their growing willingness to invest in high-performance,
secure and resilient networks to guarantee business
outcomes. Demand is also steadily growing in other
sectors such as government and military and healthcare
as awareness of the benefits has increased and access
to devices and spectrum has improved.
This growth in enterprise private networks and requirements
to support sovereign AI will also fuel associated investment
in cloud and edge computing. It is already clear that many
enterprises have strict requirements for assuring security
and data privacy on site. At the same time, many of the most
compelling use cases, especially those using latency-sensitive
or AI-driven applications, will benefit from the performance
gains derived from local application processing.
Our strategy is well aligned to help our customers unleash the
revenue potential of private 5G, secure edge computing
and AI. As an acknowledged industry leader in 5G core
and cloud-native network testing, offering innovative
solutions such as automated and continuous testing and
assurance, together with flexible business models such as
Test-as-a-Service, Spirent is helping enterprises unlock new
business outcomes and operators and suppliers deliver new
premium and assured revenue-generating services.
5G Standalone early adopters reap
the rewards
In 2024, the deployment of 5G Standalone (SA) networks
continued to progress, but at a cautious and uneven pace as
operators worldwide grapple with the formidable technical
challenges and cost of deploying and integrating new,
cloud-native 5G core technologies. However, 151 operators
are already investing in 5G SA networks with 65 now commercially
launched as they focus on advanced revenue-generating use
cases for enterprise and consumer customers which simply
cannot be supported without the move to 5G SA.
Early adopting operators are already reporting benefits
of greater go-to-market agility, improved costs, energy
efficiencies and new revenue streams being unlocked.
Combined with the growing maturity of the 5G SA device
ecosystem and increasing commercial interest in new 5G SA
enabled use cases, growth is forecast to gradually accelerate
from 2025, especially in mission-critical enterprise private
networks, government and military use cases, non-terrestrial
networks and fixed wireless access, all representing near-term
areas of opportunity for Spirent.
Looking ahead, the introduction of 5G Advanced, defined
initially under the 3GPP Release 18 standard, is expected
to serve as a transitional phase between 5G and future
6G networks throughout the second half of the decade,
introducing artificial intelligence (AI) into the network and
providing an enduring test and assurance opportunity
for Spirent.
5G Standalone
unleashes the
full feature rich
potential of 5G
technology
Service providers’ key focus
will be on 5G SA and Advanced
for the rest of the decade as
they deploy new capabilities to
unlock the full potential of 5G.
Stephen Douglas
Head of Market Strategy
18
Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Lifecycle Service
Assurance
Helping customers unleash
new forms of differentiation
and transformational value.
As focus continues to shift towards
5G SA and Advanced to fully realise
5G’s potential, guaranteeing reliable
performance and meeting service
level agreements (SLAs) is becoming
key to ensure new revenue streams
and competitive advantage.
With the new complexity
from cloudification, AI and
a transformation of many
integration, deployment and
operational workflows, demand is
growing for network automation
and continuous test and assurance
across the 5G lab to live lifecycle.
Our market leadership in 5G core
cloud-native network testing,
our vendor-independent status
and cutting-edge expertise in
automation and continuous test
and assurance uniquely positions
us to help the industry make the
move to true 5G with confidence.
Spirent’s global leadership in
automated 5G core testing was
again showcased in 2024 with
leading operators, equipment
manufacturers and cloud
providers, with over 50 unique
customer engagements, including
multi-country and national Tier-1
operators, helping them transition
from lab to live for 5G network
transformation.
Networks & Security
Helping customers unlock
increased agility and faster
time to market.
The growth in 5G deployments, the
move to SA with its disaggregated,
cloud-native architecture and
the rise of GenAI highlights the
dependency on a high-capacity,
tightly synchronised, low-latency
and secure internet protocol
transport network capable of
supporting thousands of additional
cell sites, new edge locations
and geographically distributed
data centres.
Spirent’s high-speed Ethernet
and application-aware security
testing leadership was enhanced
in 2024 by the addition of cloud-
native function (CNF) resilience
and chaos-based testing to its
core network test solution to
continuously test the impact of
CNF performance on the delivery
of 5G SA services.
Spirent’s 5G telco cloud
leadership was highlighted in
2024 at a major North American
telecommunications and media
provider, helping it rigorously test
the resilience and robustness of
its new 5G SA cloud-native core
network, safely accelerating its
time to launch.
Managed Solutions
Helping customers reduce risks
and gain subject matter expertise.
5G’s increased complexity and
utilisation of the cloud, combined
with an exponential increase
in the velocity and volume of
software releases, inconsistent
tools and processes, and a lack of
in-house expertise, presents major
challenges to our customers.
Managed Solutions help address
these challenges by offering
our unparalleled subject matter
expertise, tools and methodologies
as a service, enabling an
innovation pipeline between
development and operations.
Spirent’s Managed Solutions
leadership was showcased in
2024 at a leading European
operator with a growing edge
computing footprint, which
utilised Spirent’s field-testing
managed solution to assess the
performance and robustness of
its nationwide homegrown and
cloud hyperscaler provided edge
network for 5G services, including
low-latency applications.
$41.4bn
Forecasted 5G SA core and
telco network cloud
infrastructure spend
between 2025 and 2028
1
343
Commercial 5G launches
out of 619 operators
investing in 5G
2
65
Commercial 5G SA
launches with another
87 operators currently
investing towards 5G
SA
3
Sources
1. Omdia (September 2024).
2. Global Mobile Suppliers Association (GSA) (November 2024).
3. GSA (November 2024).
4. Analysys Mason (November 2024).
>75,000
Private 5G/LTE networks by 2029
4
19
Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Customer Centricity
We are
focused on
three strategic
priorities
1,000+
customers served in 2024
What we achieved
In 2024, we strengthened our customer relationships
during a year marked by macroeconomic uncertainty
and acquisition related hesitancy. Our emphasis
on delivering outcomes and value resonated with
customers, allowing us to broaden our reach.
Significant achievements include:
• Expanding our market presence among existing
customers while successfully diversifying into
new segments.
• More wins in Financial Services that
highlight the effectiveness of our lab and test
automation solutions.
• Strategic growth in hyperscaler and enterprise
customer segments, demonstrating the broad
applicability of our offerings.
Priorities for 2025
• Continue driving our shift from selling product
features to delivering outcome-based solutions.
• Further diversify our customer base, reducing
cyclicality and enhancing resilience.
• Expand strategic partnerships to address
customers’ pressing challenges, such as
automation and efficiency goals.
• Build on landmark deals to secure additional
high-impact services opportunities.
To realise our ambition to be the
global leader and trusted partner
for innovative technology test and
assurance solutions, we are focused
on three strategic priorities, or pillars:
Customer Centricity
Our mindset of customer centricity enables us to take a
broader role on our customers’ behalf, solving their larger,
most pressing problems and adding more value.
Innovation for Growth
We must continue to relentlessly innovate and invest to stay
ahead on key, emerging technologies, and to maintain
market leadership.
Operational Excellence
Our focus on operational excellence and upholding our core
values is a key differentiator that enables our sustainable,
profitable growth.
Our achievements in 2024 reflect
our unwavering focus on delivering
value, driving innovation and
fostering operational excellence.
These pillars will guide us as
we maintain our leadership
in the technology test and
assurance space.
Eric Updyke
Chief Executive Officer
Our strategic priorities
20
Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Innovation for Growth Operational Excellence
What we achieved
Our commitment to innovation positioned us for
success in 2024. Key milestones included:
• Launching our AI High-Speed Ethernet platform,
the first of its kind, addressing critical data centre
and AI networking challenges.
• Introducing the PNT X platform, which solidified
our leadership in positioning, navigation and
timing (PNT) technologies across diverse sectors,
including government and LEO satellites.
• Maintaining leadership in Wi-Fi testing
with enhanced solutions for Wi-Fi 7 and
Test-as-a-Service offerings.
• Expanding our High-Speed Ethernet portfolio,
including recognition for our 800G solutions and
early adoption of 1.6 terabit testing capabilities.
Priorities for 2025
• Scale our service delivery capabilities and
increase software content in our solutions.
• Capitalise on opportunities in emerging markets
such as AI-driven data centres and private
5G networks.
• Maintain leadership in high-speed Ethernet
innovation and expand into new verticals.
• Deepen our investment in PNT technologies
for automotive and aerospace applications.
$99.0m
(2023 $102.4m)
costs in research and
development in 2024,
representing
21.5%
(2023 21.6%)
of revenue
What we achieved
We focused on ensuring operational resilience while
maintaining critical investments. Highlights include:
• Targeted cost-saving measures and real
estate optimisation, supporting both efficiency
and sustainability.
• Organisational alignment to improve
collaboration and streamline R&D oversight.
Priorities for 2025
• Continue to stay close to our customers and
provide the necessary support as they develop
and rollout their development plans.
• Continue to invest and launch new products.
• Safeguard our financial flexibility to navigate
ongoing macroeconomic challenges.
21
Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Key performance indicators
Book to bill
1
Ratio
104
Revenue
$ million
$460.2m
Adjusted operating profit
2
$ million
$46.2m
Adjusted operating margin
3
%
10.0%
Performance
in a difficult
environment
Spirent’s strategy focuses on medium to long-term growth
and therefore its achievement cannot be measured by just
looking at performance in 2024 compared to the prior year;
trends over a number of years must also be considered.
Executive Director remuneration is linked to certain financial,
strategic and operational key performance indicators (KPIs)
with further information available in the Report on Directors’
Remuneration on pages 83 to 108.
103
2120
103
101
111
22 23
522.4
607.5
474.3
576.0
2120 22 23
103.5
118.5
2120
129.5
45.2
22 23
19.8
2120
21.3
9.5
20.6
22 23
104
24
460.2
24
46.2
24
10.0
24
Reason for measurement
The ratio of orders booked
to revenue recognised is a
measure of the visibility of
future revenue at current
levels of activity and
provides an indication of the
underlying trend in Spirent’s
future revenue stream.
Reason for measurement
Spirent monitors growth in
revenue as this shows how
successful Spirent has been
in expanding its markets and
growing its customer base.
Reason for measurement
Adjusted operating profit
is the measure used
to evaluate the overall
performance of the Group
as well as each of the
operating segments.
Reason for measurement
Adjusted operating margin
is a measure of the Group’s
profitability. Spirent operates
in markets which have high
operating returns and strives
to achieve best-in-class
operating margin compared
with its peers.
Reason for measurement
Long-term growth in
adjusted basic EPS
is a fundamental
driver to increasing
shareholder value.
Reason for measurement
To maintain its competitive
position, Spirent must invest
at suitable levels to support
further organic growth
initiatives in line with the
strategic objectives, whilst
driving improved productivity
and effectiveness.
Reason for measurement
Spirent’s success is
dependent on its talented
employees and retaining
them is extremely important.
Voluntary employee turnover
compared to the industry
average is the measure used
to assess how well the Group
has performed.
Reason for measurement
Free cash flow is a measure
of the quality of Spirent’s
earnings. The aim is to
achieve a high conversion
of earnings into cash.
Performance
Order intake was
greater than revenue in the
year resulting in a book
to bill ratio of 104 as we
continue to win larger,
longer-term contracts that
improve revenue visibility
and build repeatable
business (2023 101).
Performance
3 per cent revenue
decrease in 2024, following
a 21.9 per cent decrease
in 2023. 5G is expected to
be a strong driver of future
business across our solution
portfolio in the mid term;
however, during the year,
customers delayed their
investments to manage
economic challenges.
Performance
Adjusted operating profit
increased to $46.2 million,
from $45.2 million in 2023,
as a result of improved
trading conditions,
particularly in the final
quarter of the year and
continued focus on
cost control.
Performance
The increase in adjusted
operating margin to
10.0 per cent, from 9.5
per cent in 2023, reflects
the improved trading
conditions, particularly in
the final quarter of the year
and continued focus on
cost control.
Performance
Spirent aims to achieve
growth in adjusted basic
EPS. Part of the Executive
Directors’ remuneration is
dependent on achieving EPS
targets. In 2024, adjusted
basic EPS remained
comparable to 2023.
Performance
In 2024, product
development costs of $99.0
million (2023 $102.4 million)
benefited from transferring
North American activities to
lower-cost regions.
Performance
Our 2024 voluntary
turnover rate of 5.3 per
cent remains well below
the global industry average
of 11.7 per cent.
Performance
Free cash flow in 2024 was
positive at $54.3 million.
Free cash flow conversion
for 2024 was 122 per
cent of adjusted earnings
(2023 54 per cent).
Relevance to strategy
The book to bill ratio is an
indicator of the underpin to
future revenue and whether
activity levels are rising or
slowing, and therefore how
effective we have been in the
execution of our strategy.
Relevance to strategy
Revenue demonstrates
the effectiveness of our
strategy: our success in
expanding our markets both
organically and through
acquisition; maintaining
technology leadership; and
our strong relationships with
our customers, all of which
ensure that we continue to
win and maintain business.
Relevance to strategy
Adjusted operating profit
indicates our financial
strength and our ability
to invest in the business to
support the growth agenda.
Relevance to strategy
Adjusted operating margin is
a measure of how successful
we are in our overall strategy
and demonstrates our ability
to improve profitability
through efficient operations
whilst being mindful of the
need to invest for the future.
Relevance to strategy
Adjusted basic earnings per
share is a measure of how
successful we are in our
strategy and ultimately how
Spirent increases value for
its shareholders.
Relevance to strategy
It is critical that Spirent’s
product development
investment keeps pace
with the speed of change
in technology, and that
it is directed at the right
key technology areas;
this enables us to expand
our markets and to
maintain our technology
leadership position.
Relevance to strategy
We cannot avoid the fact
that some of our employees
will move on but we can
avoid a skills shortage by
appropriately managing,
recognising and rewarding
our people. Voluntary
employee turnover is a
measure of how successful
Spirent is in its strategy of
retaining and investing in
its people.
Relevance to strategy
Having strong free cash
flow reflects Spirent’s ability
to generate funds for future
investment. It provides
financial strength and
flexibility and the ability to
pay sustainable dividends
to our shareholders.
STRATEGIC REPORT
22
Spirent Communications plc Annual Report 2024
Adjusted basic earnings
per share
4
(EPS)
Cents
7.75¢
Product development costs
as a percentage of revenue
%
21.5%
Voluntary employee turnover
%
5.3%
Free cash flow
5
$ million
$54.3m
7.75
24
21.5
24
5.3
24
54.3
24
Notes
1. Ratio of orders booked to
revenue recognised in the period.
2. Before acquired intangible
asset amortisation, share-based
payment and other adjusting
items amounting to $35.9 million
in total (2023 $26.8 million).
3. Adjusted operating profit as
a percentage of revenue in
the period.
4. Adjusted basic earnings
per share is based on
adjusted earnings as set
out in note 11 of Notes to
the full year consolidated
financial statements.
5. Cash flow generated from
operations, less tax and net
capital expenditure, after interest
paid and/or received, payment
of lease liabilities, finance
lease payments received and
excluding acquisition related
other adjusting items and
one-off contributions to the UK
pension scheme.
Items with notes 1 to 5 are
non-GAAP alternative performance
measures; see pages 195 and 196
for more detail.
Reason for measurement
The ratio of orders booked
to revenue recognised is a
measure of the visibility of
future revenue at current
levels of activity and
provides an indication of the
underlying trend in Spirent’s
future revenue stream.
Reason for measurement
Spirent monitors growth in
revenue as this shows how
successful Spirent has been
in expanding its markets and
growing its customer base.
Reason for measurement
Adjusted operating profit
is the measure used
to evaluate the overall
performance of the Group
as well as each of the
operating segments.
Reason for measurement
Adjusted operating margin
is a measure of the Group’s
profitability. Spirent operates
in markets which have high
operating returns and strives
to achieve best-in-class
operating margin compared
with its peers.
Reason for measurement
Long-term growth in
adjusted basic EPS
is a fundamental
driver to increasing
shareholder value.
Reason for measurement
To maintain its competitive
position, Spirent must invest
at suitable levels to support
further organic growth
initiatives in line with the
strategic objectives, whilst
driving improved productivity
and effectiveness.
Reason for measurement
Spirent’s success is
dependent on its talented
employees and retaining
them is extremely important.
Voluntary employee turnover
compared to the industry
average is the measure used
to assess how well the Group
has performed.
Reason for measurement
Free cash flow is a measure
of the quality of Spirent’s
earnings. The aim is to
achieve a high conversion
of earnings into cash.
Performance
Order intake was
greater than revenue in the
year resulting in a book
to bill ratio of 104 as we
continue to win larger,
longer-term contracts that
improve revenue visibility
and build repeatable
business (2023 101).
Performance
3 per cent revenue
decrease in 2024, following
a 21.9 per cent decrease
in 2023. 5G is expected to
be a strong driver of future
business across our solution
portfolio in the mid term;
however, during the year,
customers delayed their
investments to manage
economic challenges.
Performance
Adjusted operating profit
increased to $46.2 million,
from $45.2 million in 2023,
as a result of improved
trading conditions,
particularly in the final
quarter of the year and
continued focus on
cost control.
Performance
The increase in adjusted
operating margin to
10.0 per cent, from 9.5
per cent in 2023, reflects
the improved trading
conditions, particularly in
the final quarter of the year
and continued focus on
cost control.
Performance
Spirent aims to achieve
growth in adjusted basic
EPS. Part of the Executive
Directors’ remuneration is
dependent on achieving EPS
targets. In 2024, adjusted
basic EPS remained
comparable to 2023.
Performance
In 2024, product
development costs of $99.0
million (2023 $102.4 million)
benefited from transferring
North American activities to
lower-cost regions.
Performance
Our 2024 voluntary
turnover rate of 5.3 per
cent remains well below
the global industry average
of 11.7 per cent.
Performance
Free cash flow in 2024 was
positive at $54.3 million.
Free cash flow conversion
for 2024 was 122 per
cent of adjusted earnings
(2023 54 per cent).
Relevance to strategy
The book to bill ratio is an
indicator of the underpin to
future revenue and whether
activity levels are rising or
slowing, and therefore how
effective we have been in the
execution of our strategy.
Relevance to strategy
Revenue demonstrates
the effectiveness of our
strategy: our success in
expanding our markets both
organically and through
acquisition; maintaining
technology leadership; and
our strong relationships with
our customers, all of which
ensure that we continue to
win and maintain business.
Relevance to strategy
Adjusted operating profit
indicates our financial
strength and our ability
to invest in the business to
support the growth agenda.
Relevance to strategy
Adjusted operating margin is
a measure of how successful
we are in our overall strategy
and demonstrates our ability
to improve profitability
through efficient operations
whilst being mindful of the
need to invest for the future.
Relevance to strategy
Adjusted basic earnings per
share is a measure of how
successful we are in our
strategy and ultimately how
Spirent increases value for
its shareholders.
Relevance to strategy
It is critical that Spirent’s
product development
investment keeps pace
with the speed of change
in technology, and that
it is directed at the right
key technology areas;
this enables us to expand
our markets and to
maintain our technology
leadership position.
Relevance to strategy
We cannot avoid the fact
that some of our employees
will move on but we can
avoid a skills shortage by
appropriately managing,
recognising and rewarding
our people. Voluntary
employee turnover is a
measure of how successful
Spirent is in its strategy of
retaining and investing in
its people.
Relevance to strategy
Having strong free cash
flow reflects Spirent’s ability
to generate funds for future
investment. It provides
financial strength and
flexibility and the ability to
pay sustainable dividends
to our shareholders.
14.68
2120
18.86
7.55
16.59
22 23
19.7
2120
18.3
21.6
19.7
22 23
6.7
2120
10.1
5.6
7.2
22 23
102.6
2120
91.9
103.8
23.7
22 23
STRATEGIC REPORT
23
Spirent Communications plc Annual Report 2024
Stakeholder engagement
Considering
stakeholders
in key business
decisions
Directors are bound by their duties under the
Companies Act 2006 (the “2006 Act”), but the
principles underpinning Section 172 are not only
considered at Board level, they form part of
everything we do as a Company.
Supported by the Company Secretary & General
Counsel, the Board, management and all those
tasked with preparation of Board materials,
must give consideration to relevant stakeholders
in matters requiring decision making, including
strategic decisions.
The following pages comprise our Section
172(1) Statement and set out how the Board
has, in performing its duties over the course of
the year, had regard to the matters set out in
Section 172(1) (a) to (f) of the 2006 Act, giving
details of how each key stakeholder has been
engaged and considered, including examples
of how stakeholders were considered in key
Board decisions. Further information can also
be found throughout the Strategic Report.
Impact of Keysight offer
The offer announced by Keysight Technologies,
Inc. (“Keysight”) in March 2024, which was
approved by shareholders in May 2024, has
impacted our engagement approach across all
stakeholders, often restricting engagement with
shareholders on the regulatory review aspects
due to price sensitivity, whilst necessitating
additional communication streams to provide
employee and customer comfort.
For the first time, we also engaged the services
of a specialist external proxy voting agency to
ensure the correct messaging during the Court
and General Meeting voting process, which
ultimately brought about a successful conclusion
to that process, with over 98 per cent of votes cast
in favour of each resolution. However, changes
in the share register following the offer have also
made engagement on remuneration matters
more complex, as many of the shareholders who
voted against the Remuneration Policy and LTIP
arrangements at the 2024 AGM are no longer on
the share register.
No successful business
can operate in isolation.
Without a thorough
understanding of its key
stakeholders and their
differing perspectives,
a business will struggle
to deliver sustainable
long-term growth to
shareholders and
other stakeholders.
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Spirent Communications plc Annual Report 2024
Shareholders
Spirent is committed to engaging with
current and potential shareholders
through continued transparent and
effective communication, where it is
able to.
Topics covered
• Financial performance.
• Capital management and distribution.
• Long-term sustainability strategy.
• Corporate governance and stewardship.
• Executive remuneration, including share plans and
application of Remuneration Policy.
• Ensuring the correct messaging during the Court and
General Meeting voting process.
• Communicating the potential impact of the Keysight
offer and ongoing processes, including progress of the
regulatory reviews in UK, USA and China.
How we listen and engage
• Open door policy with investors: CEO and CFO regularly
meet investors virtually and, when possible, face-to-face.
• The Annual General Meeting (AGM) and related follow-up.
• Remuneration Committee Chair further consulting with
shareholders on application of the Group’s approved
Executive Director Remuneration Policy and share
plan changes.
• Enlisting a specialist external proxy voting agency to
ensure the correct messaging during the May 2024 Court
and General Meeting voting process, which ultimately led
to a successful voting outcome.
Current year highlights including Board decision
making and Section 172 considerations
• All resolutions successfully passed at 2024 AGM, following
extensive shareholder consultation on Remuneration
Policy and share plan changes.
• Directors fully available to answer shareholder questions
at the AGM.
• Reviewing payment of dividends, aligned to profitability
and cash flow, in the context of the Keysight offer.
• Broker updates to the Board on market sentiment, as well
as presentations to the Board on investor feedback and
share register analysis.
• Successful voting outcome of the May 2024 Court and
General Meeting voting process, with over 98 per cent of
votes cast in favour of each resolution.
• Further ongoing engagement with major shareholders on
application of approved Remuneration Policy and share
plan changes, including use of restricted shares, in 2025.
Employees
We are a people business and our
circa 1,500 colleagues around the
world are fundamental to the
long-term success of our Company.
Topics covered
• Reinforcing understanding of our mission, vision, values
and strategy.
• Ensuring employees understand what is expected of them
and know the role they play in our success.
• Spending quality time with line managers so that they
feel listened to and supported, enabling employees to
feel confident that they have the skills to do their job
well, while identifying potential training needs for their
future development.
• Making sure that employees feel part of a thriving
Spirent community.
• Communicating the potential impact of the Keysight offer
on employees and providing appropriate reassurance.
How we listen and engage
• Global and regional internal communication and
collaboration platforms to provide access to information
for all colleagues.
• Learning and knowledge sharing forums for our
technology and sales communities.
• Biannual colleague engagement surveys to monitor
developments in workforce sentiment.
• Engagement events with global and local management
representatives, including Non-executive Directors.
• In respect of the ongoing Keysight offer, additional town
halls and CEO videos.
Current year highlights including Board decision
making and Section 172 considerations
• Biannual employee surveys achieved consistently strong
response rates, indicating a highly engaged workforce,
with an average of 79 per cent of our total employee
population responding per survey, based on the feedback
received, both quantitatively and over 800 free text
comments per survey.
• Management Matters engagement programme to
support people managers within the business.
• Employee wellbeing programmes refreshed with
improved access to support, ranging from awareness
campaigns to mental health first aid training.
• Regular updates from the CEO on the Keysight offer
process and timeline, including via global town halls
and videos, with positive employee feedback.
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Spirent Communications plc Annual Report 2024
Stakeholder engagement continued
Customers
Providing solutions and services
to help our customers keep their
promises to their customers.
Topics covered
• Understanding the challenges our customers face.
• Developing solutions and services to help our customers
to manage the complexity of their devices, networks
and services.
• Working collaboratively with customers and their partners.
• Potential impact of the Keysight offer on current products
and services.
How we listen and engage
• Investment in an agile, collaborative organisation so that
we can be responsive to customer needs.
• Regular client updates and acting on their feedback.
• Extension of our thought leadership to stay ahead in key
technologies in sustainable growth areas.
• Client/customer calls or meetings to communicate the
potential impact of the Keysight offer.
Current year highlights including Board decision
making and Section 172 considerations
• Awards won at 2024 Lightwave Innovation Reviews (Lab/
Production Test Equipment and Field Test Equipment) and
2024 Interop Tokyo Best of Show (Testing Grand Prize,
Testing Special Prize and People’s Choice Prize). Named a
2024 IoT Evolution 5G Leadership Award winner.
• Acceleration of our digital-first marketing approach with
targeted always-on digital marketing campaigns to grow
interaction and drive demand.
• Continued expansion of our library of downloadable
resources with high-quality, targeted content to share
thought leadership and technological expertise.
• Extending geographical reach and customer
engagement through an ever-expanding social media
networking programme.
• Feedback from client/customer calls or meetings to
communicate the potential impact of the Keysight offer
reported to the Board.
Suppliers
Spirent engages with a number of
different suppliers across the business.
Topics covered
• Long-term trusted partnerships facilitating real
margin improvement.
• Strong working relationships.
• Collaboration.
• Fair contract and payment terms.
• Management of relationships through global supply
chain disruption.
• Potential impact of the Keysight offer on current supply chain.
How we listen and engage
• Active management and monitoring of key suppliers and
supply chain trends.
• Meetings held with key suppliers.
• Supplier surveys as an embedded part of the
procurement process.
• Supplier Code of Conduct assessments.
• Supplier calls or meetings to communicate the potential
impact of the Keysight offer.
Current year highlights including Board decision
making and Section 172 considerations
• Re-working of the supply chain audit programme.
• Feedback from supplier calls or meetings to communicate
the potential impact of the Keysight offer reported to
the Board.
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Spirent Communications plc Annual Report 2024
The world around us
Spirent has a diverse network
throughout the world around us
which is critical to the ongoing
success of the business, from
governments and regulators
to educational facilities and
our local communities.
Topics covered
• Being mindful of our environmental impact.
• Being a responsible corporate citizen.
• Supporting our local communities through
charitable giving.
• Being a trusted partner to customers around the world.
• Providing work experience and early career
development programmes.
• Engaging with global think tanks and trade associations
to understand research priorities or opportunities and
offer expertise to shape policy and industry positions.
• Participating in global thought leadership conferences
and roundtable events.
How we listen and engage
• Participation in environmental reporting surveys.
• Enhancement of reporting framework to ensure
compliance with Task Force on Climate-related Financial
Disclosures (TCFD) requirements.
• Apprenticeship, graduate and work experience
schemes to encourage a diverse pipeline of new and
developing talent.
Current year highlights, including Board decision
making and Section 172 considerations
• Continuing to expand our early career talent programme,
after launching a new internal network and an
engineering development programme.
• Ongoing flexible working to reduce real estate footprint
and carbon emissions, with reporting to and monitoring
by the Board.
STRATEGIC REPORT
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Spirent Communications plc Annual Report 2024
Transformative
Transitioning from lab to live
for network transformation
In response to a government mandate, a major UK telecommunications provider embarked
on a complex journey to replace vendor equipment throughout its core network and
modernise its network architecture, moving to a cloud-based environment.
The transition required extensive validation using Spirent’s Landslide core network test
solution in the lab and Spirent’s VisionWorks™ active assurance solution in the pre-production
environment before progressing to the production network. This phased service activation
approach enabled the operator to validate each network upgrade with real customer
loads in segregated parts of the network, ensuring it could handle 6 million subscribers per
migration iteration before reaching full-scale deployment to ultimately support 30+ million
subscribers on the upgraded network.
As this transformative journey continues, Spirent’s solutions have proven invaluable,
enabling the operator to achieve reliable, scalable 5G services across its network – an
exemplary model of lab to live network transformation and collaboration between vendor
and operator.
Spotlight:
Enable transition
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Spirent Communications plc Annual Report 2024
Overcoming network
challenges in AI data centres
Leading technology services provider World Wide Technology (WWT) offers clients
across industries its innovative Artificial Intelligence Proving Ground as a dynamic lab
environment to accelerate, secure and scale their AI journeys. To help IT teams evaluate and
test AI infrastructures in WWT’s one-of-a-kind lab environment, WWT recognised the need to
add Spirent’s industry-first high-density test solution capable of emulating realistic AI workloads
over Ethernet.
Ethernet is the backbone of the cloud and the ability to emulate realistic AI traffic workloads
and test their impact on AI data centre networks and interconnects is key. The pioneering
Spirent solution stood out for WWT because of its capacity to realistically emulate high-performance
AI processing unit traffic patterns using an enhanced form of Ethernet. This enables data centre
customers to validate their Ethernet infrastructure’s capability to support large AI workloads,
while avoiding the considerable challenges associated with deploying and managing
xPU-based server farms as testing frameworks.
Innovative
Spotlight:
Innovate for AI
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Spirent Communications plc Annual Report 2024
Our people and culture
An engaging
and inclusive
culture
Spirent takes pride in fostering a
supportive and inclusive environment
where employees can truly thrive,
recognising that our people are the
driving force behind our success.
comments per survey, we implemented several initiatives to
strengthen engagement and communication. These include:
• Launching the Bowthorpe Awards programme: A monthly
recognition initiative celebrating innovation across
the business.
• Facilitating leadership connections: Hosting a series
of executive site visits and in-person town hall meetings,
enabling leaders to engage directly with employees and
address their questions.
• Introducing the CEO Update video series: A new
communication channel providing timely updates on
our acquisition progress.
In addition, we celebrated our Positioning Technologies
business retaining its internationally recognised Investors
in People Platinum status for We Invest in People and
Gold status for We Invest in Wellbeing. These achievements
highlight our commitment to fostering a culture that
empowers and supports our employees through people-
focused practices and wellbeing initiatives, resulting in high
levels of engagement and satisfaction.
Diversity and inclusion strategy
2024 priorities
Equitable pay
Our focus on pay equity continues. We have fully embedded
pay parity analysis into our business-as-usual
compensation review.
Invest in leadership development
Our commitment to continuous learning is key to the
success of both our employees and our business. Through
well-structured learning and development programmes,
we offer a wide range of technology and commercial
training opportunities, ensuring our employees have the
tools they need to excel. In 2024, we took this commitment
a step further by introducing our Leadership Essentials
programme. Recognising the critical role leaders play in
shaping the employee experience at Spirent, this initiative
was designed to equip our first-time people managers
with the knowledge and skills to inspire and empower their
teams to succeed. We are proud of the managers from
around the globe who have completed the programme,
further strengthening leadership and fostering a culture
of growth and collaboration across our organisation.
Celebrating diversity, inclusivity, and giving back
In 2024, our Spirent Celebrates initiative continued to evolve,
showcasing the diversity of our global workforce. This year,
we honoured a variety of cultures, holidays, causes and
awareness days, including Golden Week, Pride, Diwali,
Great Union Day and International Volunteering Day.
Complementing these celebrations, our Charitable Giving
programmes – including Company Match, Volunteer Time
Off and Local Charity Support – enabled our employees to
create a meaningful contribution by supporting causes close
to their hearts and giving back to their local communities.
Additionally, our annual Step Challenge inspired employees
to collectively clock up over 60 million steps, raising $9,900
for charities of their choice.
The way we work
Our values are the cornerstone of our culture, guiding how
we collaborate and build relationships with both colleagues
and customers. We prioritise employee wellbeing while
fostering innovation, collaboration and knowledge sharing.
This balanced approach has enabled us to retain and
develop talent, at levels exceeding comparable industry
averages, as we navigate the ongoing Keysight acquisition
of Spirent.
Measuring our engagement
We are committed to prioritising what matters most to our
employees by cultivating psychological safety, encouraging
open and honest feedback and striving for continuous
improvement. Our biannual employee engagement survey
is a vital tool in this effort, and in 2024 we maintained
consistently high participation levels across the organisation
with an average of 79 per cent of our total employee
population responding per survey. Based on the feedback
we received, both quantitatively and over 800 free text
Our values
Join forces
Collaborate with customers, partners and
employees to drive success.
Find a better way
Create new possibilities and make change happen.
Play to win
Aim high and win responsibly.
Inspire, challenge and coach
Enable and empower our people.
Take ownership
Embrace responsibility and seek to deliver impact
wherever you go.
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Spirent Communications plc Annual Report 2024
Bringing our
culture to life
Our #LifeAtSpirent campaign shines a spotlight on
the exceptional talent within Spirent, offering external
audiences an authentic view of who we are, how
we work and what matters most to us. This initiative
emphasises our commitment to Spirent’s core values,
career development, diversity and inclusion, employee
benefits, sustainability and more. Complementing this,
our Get to Know employee spotlight series deepens
connections across our global teams, fostering a
stronger sense of community and collaboration.
Our culture in action:
empowering leadership
development
“ The course was highly interactive!
I came away with the knowledge,
skills, and renewed confidence
to successfully manage my team
and help each member flourish.”
Yang Hu – Senior Services
Delivery Manager
“ It was great to converse with my
peers from across the world. I
feel better equipped to provide
my team with constructive
feedback and help in setting
meaningful goals.”
Dorothy Litowinsky – Renewal &
Quotes, Manager (Americas)
“ The key takeaway for me
was delegation. The ability to
effectively empower others
will allow me to devote more
time to supporting and leading
my team.”
Francois Surinx – Regional
Sales Director
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Spirent Communications plc Annual Report 2024
Sustainability
D
e
l
i
v
e
r
a
s
u
s
t
a
i
n
a
b
l
e
f
u
t
u
r
e
O
p
e
r
a
t
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w
i
t
h
i
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g
r
i
t
y
About
FuturePositive
FuturePositive is our
sustainability programme.
Through this programme, we have embedded the highest
standards of environmental management, social practices
and corporate governance in our business and supply
chain and help our customers tackle important global
sustainability challenges.
Promote diversity
and invest in people
Our promise
We will take action on diversity and set clear expectations.
We will attract and develop talent and skills to drive
innovation and support long-term sustainable growth.
We will also enable and embed flexible working across
all our operations.
Vision
Our solutions will help deliver
on the promise of a sustainable
future for all.
We will operate with integrity,
respecting the environment and
people everywhere.
Promise of a
sustainable future
Our promise
We will showcase the environmental
benefits that our solutions deliver for
customers and embed sustainability
into our go-to-market strategy.
Net zero
carbon
Our promise
We will maintain
CarbonNeutral
®
Company
certification and work
towards net zero carbon
by 2035 through energy
efficiency, 100 per cent
renewable electricity and
carbon offsets.
Operate
responsibly
Our promise
We will maintain ISO
14001 certification at key
sites globally and work
towards sending zero
waste to landfill. We will
embed circular economy
principles in our product
design and reduce
sustainability impacts
in our supply chain.
Be accountable
and transparent
Our promise
We will expand our sustainability
governance structures and reporting, and
communicate regularly with staff on
FuturePositive targets and progress.
Our sustainability strategy is
focused on five key missions:
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Progress in 2024
Key achievements
• Net zero carbon: We maintained CarbonNeutral
®
Company certification for Scope 1 and 2 and
some Scope 3 emissions.
• Invest in people: We retained our Platinum
Investors in People accreditation for our
Positioning business.
• Leadership training: Extended our Leadership
Essentials training across the Company.
• Environmental management system: We
maintained our ISO 14001 certification.
• Supplier sustainability: We conducted more than
200 supplier ESG assessments, focused on our top
suppliers by spend and “Risk A” vendors (vendors
who supply mission-critical goods and services
for our products and customer solutions).
We look to create long-term value for our shareholders by:
• protecting our reputation and ability to grow;
• focusing on winning business from customers who
value strong environmental, social and governance
(ESG) performance;
• enhancing our efficiency;
• enabling our people to work productively in a safe and
inclusive environment;
• helping us to attract and retain diverse talent, and
encouraging employees to take pride in working for us; and
• reducing the risk of incidents and their associated costs.
Our material sustainability issues
During 2024 we updated our sustainability materiality
analysis. Using a risk-based approach, we analysed key
ESG trends as well as insights from peers and customers
to ensure our ESG programmes are focused on the most
important issues.
The review confirmed the relevance of material issues
identified in previous iterations, as well as identifying
three new topics: responsible technology (including AI),
biodiversity, as well as sustainable resource use and
sourcing, which is priority theme within our Operate
Responsibly programme.
The issue of flexible working has been incorporated into the
wider-ranging topic of health and wellbeing. The topics of
supply chain diversity, mineral sourcing, conflict minerals
and impact investing also increased in significance.
Climate change and net zero remain priority issues,
including the role our solutions can play in helping our
customers reduce their impacts. Diversity, equity and
inclusion, and staff health and wellbeing continue to be
important, along with responsible business practices,
sustainable product design, supply chain management
(including climate change and human and labour rights)
and information security and cybersecurity. Water use
is an emerging issue, especially in raw materials and
manufacturing in supply chains.
Vision
Our solutions will help deliver
on the promise of a sustainable
future for all.
We will operate with integrity,
respecting the environment
and people everywhere.
During 2024 we undertook
a wide-ranging ESG review
of our suppliers, assessing the
disclosures of more than 200
of our most important vendors
against nine priority categories.
Angus Iveson
Company Secretary & General Counsel
We manage our material sustainability impacts and
opportunities through our FuturePositive programme.
Our comprehensive programme not only ensures we
comply with legislation and stakeholder expectations but
has positive social and environmental impacts for customers
and for our own business.
The Board has designated the CEO as the Board member
responsible for ESG matters within the Group. We have
appointed Brite Green as an ESG adviser.
The Board is given updates on our sustainability
programme, FuturePositive, as needed through
presentations from the CEO, the Company Secretary, and
other senior managers responsible for key aspects of the
programme. The Audit Committee also receives frequent
updates on risk throughout the year, including cybersecurity.
Sustainability at Spirent
We are committed to embedding the highest standards of
environmental management, social practices and governance
into our operations and products and across our supply chain.
O
p
e
r
a
t
e
w
i
t
h
i
n
t
e
g
r
i
t
y
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Spirent Communications plc Annual Report 2024
Sustainability continued
Sustainability at Spirent continued
Policies
Spirent maintains a suite of responsible business policies
which commit the Group to compliance with high standards
of ethics and business integrity, environmental management
and employee and community welfare.
Deliver a sustainable future
We aim to showcase the environmental benefits that our
solutions deliver for customers and embed sustainability into
our go-to-market strategy.
This year we worked with customers across the project
lifecycle to help them improve their sustainability performance.
From working with equipment manufacturers to test and
validate new, more efficient components for 5G, to our work
with lab and network operators to automate and streamline
operations, Spirent is helping to drive the transition to a low
carbon economy.
You can read more in our Sustainability Report which is
available on our website at corporate.spirent.com.
Be net zero carbon
During 2024, we maintained our CarbonNeutral
®
Company
certification with Climate Impact Partners for our Scope 1
and 2 and some Scope 3 emissions sources, which include
electricity transmission and distribution, waste from building
operations, business travel and homeworking. We continue
to work towards achieving net zero carbon (i.e. all emission
sources in Scope 1, 2 and 3, for which we are responsible)
by 2035. In 2024 we continued to implement our net zero
carbon roadmap, which will deliver our short-term carbon
reduction targets through energy efficiency, office and
lab consolidation, 100 per cent renewable electricity and
contractual mechanisms.
We continued to source all our electricity from renewable
sources during 2024. This included on-site generation at our
Paignton site, low carbon electricity contracts at our Paignton
and Berlin sites, and the purchase of Energy Attribute
Certificates (EACs) for all remaining purchased electricity.
When purchasing EACs and carbon credits, we have
conducted due diligence to give us comfort as to their
quality and traceability. We have only selected those from
high-quality and reputable projects which are independently
verified to recognised global standards. We have worked with
Climate Impact Partners to source carbon credits in line with
our regional emissions and to purchase national EACs based
on our energy usage in each country we operate in. Full
details of the projects are set out in our Sustainability Report
which is available on our website at corporate.spirent.com.
Last year we announced our new Lab and Estates strategy.
We anticipate that this will deliver considerable energy
and carbon savings by migrating our on-premise labs to
a more efficient, low-carbon, colocation centre operated
by Lynnwood, a third-party. During 2024 we migrated
lab equipment from our San Jose lab and some from our
Calabasas site. We paused a number of other equipment
moves due to the acquisition process.
Energy use
Spirent is within scope of the Streamlined Energy and Carbon
Reporting (SECR) Regulations. Spirent’s total global energy
use decreased by 4.7 per cent in 2024 to 12,202MWh (2023
12,807MWh). This is due to the continued rationalisation of our
estate and transition of some labs to a third-party colocation
facility. Gas use decreased in the year by around 18 per cent to
330MWh (2023 402MWh) due to reductions in consumption at
our Calabasas site in the second half of the year. Total energy
usage in the UK during 2024 was 825MWh (2023 742MWh).
UK energy use comprises Gas: 85MWh, purchased electricity:
697MWh, onsite generation from renewables: 85MWh. Within
the UK, our energy intensity per m
2
was 252kWh/m
2
. This has
increased from 197kWh/m
2
in 2023 due to the closure of two
low energy-use administrative offices. UK energy use is 6.8 per
cent of our global total.
Greenhouse gas emissions
Spirent is committed to combating climate change
and reporting our progress. Our total Scope 1 and 2
(location-based) emissions decreased by 9 per cent from
2023, and our emissions per $ million of revenue reduced
by 6.3 per cent. We have reduced our total location-based
emissions by 43.7 per cent since our 2014 baseline. Carbon
emissions arising from our UK operations in 2024 were
160 tonnes CO
2
e (2023 142 tonnes CO
2
e). Emissions
from UK operations represent 4.2 per cent of the Group’s
total worldwide.
Due to our purchasing 100 per cent renewable electricity,
our market-based emissions are significantly lower
than our location-based total: 60.4 tonnes CO
2
e in
2024 (2023 58.5 tonnes CO
2
e).
The total Scope 3 emissions for the year is around 31,400
tonnes CO
2
e with the largest component of our Scope 3
footprint coming from customer use of our products. A full
breakdown by source is set out in our Sustainability Report
which is available on our website at corporate.spirent.com.
The Group responded to the Carbon Disclosure Project in
2024, completing the Climate Change and Supply Chain
questionnaires. In 2024, we maintained a climate change
rating of B (Management) (2023 B).
2024
Tonnes
CO
2
e
2023
Tonnes
CO
2
e
Emissions from:
Combustion of fuel and operation
of facilities (Scope 1)
60.4 73.6
Electricity, heat, steam and
cooling purchased for own use
(Scope 2)
3,755.3 4,118.8
Total emissions (Scope 1 and 2) 3,815.7 4,192.4
Scope 3 31,426 28,426
Total emissions (Scope 1, 2 and 3) 35,242 32,618
Emissions intensity metrics:
Normalised per FTE employee 2.56 2.53
Normalised per square metre of
gross internal area of our facilities
0.117 0.121
Normalised per $ million
of revenues
8.29 8.84
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Spirent Communications plc Annual Report 2024
Methodology
Reporting on emission sources is required under the
Companies Act 2006 (Strategic Report and Directors’
Report) Regulations 2013 and these sources fall within our
consolidated financial statements. We have reported on all
the emission sources that the Group is responsible for and
which fall within our consolidated financial statements.
We do not have any responsibility for any emission
sources that are not included in our consolidated financial
statements. We report our emissions using the location-based
methodology. We have used the GHG Protocol Corporate
Accounting and Reporting Standard (Revised Edition), along
with data gathered to fulfil our requirements under these
regulations, and the most recent emission factors available:
UK Government GHG Conversion Factors for Company
Reporting 2024 for the UK, US EPA 2024 eGrid emissions
factors for the applicable individual states in the US, and the
latest emissions factors for all other countries were sourced
from the International Energy Agency’s 2024 data set.
Performance against targets
The Group has set a target to reduce energy use by 25 per
cent from 2019 levels by the end of 2025. In 2024 our energy
use was 4.7 per cent lower than the previous year and 15.6
per cent lower than our 2019 baseline. Our energy reduction
initiatives have been impacted by the Keysight acquisition as
we have slowed the pace of transition of our labs to 100 per
cent renewable energy data centre.
As part of our target to achieve net zero by 2035, we have
also set an interim target to reduce carbon emissions across
Scope 1, 2 and 3 by 15 per cent from a 2022 baseline. We
have reduced emissions by 29 per cent and are on track to
meet this.
Energy Savings Opportunity Scheme (ESOS)
Spirent qualifies for ESOS. We completed an ESOS
compliant energy audit for Phase 3 and submitted the
relevant disclosure to the Environment Agency. Anticipating
the completion of the Company’s acquisition in 2025,
we submitted a nil return for the new energy action plan
requirement as future energy reduction initiatives will take
place within Keysight’s carbon reduction strategy.
Task Force on Climate-related
Financial Disclosures (TCFD)
Climate change creates new risks and opportunities for
companies. In accordance with the requirements of Listing
Rule 9.8.6R, Spirent has provided disclosures against all 11
disclosure recommendations that span four key areas of
governance, strategy and climate change scenario analysis,
risk management, and metrics and targets. These disclosures
also meet the mandatory CFD requirements and form part of
the NFSI statement.
Governance and risk management
The Board considers sustainability issues (including climate
change) and oversees the consideration of climate-related
risks and opportunities under the TCFD disclosure requirements,
as well as monitoring progress against our FuturePositive
sustainability strategy, including climate-related goals
and targets.
A detailed review of how climate change may impact
our business in the future was completed in 2021 and the
assumptions and findings were reviewed in 2024, with only
minor changes being made. There have been no significant
changes in our operations or assumptions since 2022 and we
believe that this analysis still adequately reflects our position.
The significant climate-related risks and opportunities were
initially identified via an analysis conducted by a sustainability
consultant which considered physical, regulatory and
commercial factors across various scenarios, all of which were
examined through a senior manager workshop, including
Executive Directors, General Managers of our business units
and supply chain, and Operational Executives. These are
reviewed on an ongoing basis by the Executive Director-led
ESG Management Committee, the Audit Committee and
its Risk Sub-Committee, as part of our business risk and
financial planning processes, with the CEO having overall
responsibility for sustainability matters. The materiality of
the potential climate impact is assessed using the Group’s
materiality criteria.
Over the course of 2024, a small number of customers have
engaged with us on the importance of climate change, and
we have incorporated their expectations into our materiality,
strategy and reporting planning.
Strategy
Spirent recognises the importance of climate change as an
environmental threat that the world faces, and as such we
have carefully considered the impact of such risk across our
operations. Climate risks are entirely integrated into our risk
management process.
We have identified the following risks across a variety of
time horizons. The risks consider the potential for increased
exposure to extreme weather events at a Group location
or key supply chain site. In addition, likely changes to
the regulatory system in which the Group operates have
been considered.
For the purpose of evaluating climate change-related risks,
the Group has defined the following time horizons, which also
ensure that other timeframes, such as business planning and
viability, are aligned:
Short term Medium term Long term
0–2 years 2–10 years 10+ years
In consideration to Tables A1.1 and A1.2 of the TCFD
Implementation Guidance 2021, we have considered all
climate-related risk themes and their potential impact on
the Group, the most important of which are as follows:
Transitional risks
It is expected that there will likely be a large and radical
change in global markets, with a drive to shift quickly towards
renewables and away from fossil fuels, resulting in increased
carbon taxes across all regions in the short and medium
term. This may result in associated increased costs. Starting
in the short term, costs are likely to increase by an immaterial
amount due to higher investment requirements in low carbon
technology and expected additional carbon-related levies
and we also expect additional administrative burden on the
business, likely increasing the costs for resource to deliver
and report.
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Spirent Communications plc Annual Report 2024
Sustainability continued
Task Force on Climate-related
Financial Disclosures (TCFD) continued
Transitional risks continued
We have modelled the impact of carbon credits using a price
per tonne CO
2
e of up to £250 and the impact is not material.
Transitional risks are also unlikely to lead to any impairments
or write-offs. We expect to purchase carbon credits in the
short to medium term in line with our commitment to achieve
CarbonNeutral
®
Company certification, but expect energy
efficiency and renewable energy to reduce the requirement
for carbon credits as we progress towards net zero carbon
in 2035. We have reviewed these modelling assumptions
(including the price of carbon credits) during this year and
believe they remain appropriate.
In addition, we have agreed a programme to reduce
our indirect carbon emissions. A key area is the use of our
products and we will draw on a range of approaches to help
reduce our impact in this area. These include our continued
migration from hardware to software test solutions and the
use of more efficient white-box hardware, improved energy
management in our bespoke hardware, supporting customers
with test automation and scheduling, and improved data
about how our products are used.
We also work closely with our supply chain, and set requirements
to reduce and report carbon emissions through supplier
sustainability agreements. During 2024, we have assessed
the carbon emissions data and climate change management
of more than 200 key suppliers, and have scored each supplier
based on the completeness and maturity of their ESG disclosures.
During 2025 we will engage with these suppliers to seek
further information and encourage action towards alignment
with our net zero target.
Physical risks
Acute
Considering the potential of increasing intensity and frequency
of storms and concentrated rainfall events, and frequency of
wildfires, we have assessed that these risks would possibly
cause some disruption to operations. Wildfire risks are most
relevant to our operations in Calabasas, CA, (which have been
indirectly affected by the recent wildfires) and flooding in our
principal contract manufacturer, based in Thailand.
In the medium to long term, risks include Spirent site damage
to building and infrastructure, lost time and productivity and
any associated increased cost of insurance.
Additionally, a major supplier disruption event is a possible
key risk, causing an outage for a period of time which we
assess as causing possible delays to customer shipments
and the timing of revenue recognition.
Spirent has mitigation plans for each of these physical
risks identified, which have been developed as part of
longstanding business continuity and disaster recovery plans.
Spirent engineering centres are situated in various different
locations allowing a level of flexibility and agility should
one site become affected. We endeavour to dual source
key components wherever possible. Additionally, the Group
has appropriate business interruption insurance in place.
Chronic
Higher peak and average temperatures are likely to result
in increased energy demand and cooling capacity required
for lab and office environments. This could lead to increased
capital expenditure to expand or upgrade cooling equipment
across multiple Spirent sites in the medium-term. In addition,
increased heatwaves and droughts could have an impact in
the short- to medium-term on the health of more vulnerable
employees and their families, possibly resulting in higher staff
absence levels.
It is possible that the rise in average temperatures may
reduce natural gas use for space heating. Additionally, there is
already a market opportunity for existing products, relating to
the provision of emerging energy-efficient Spirent products.
We have identified a number of areas of opportunity in the short-
term to reduce the energy footprint of our solutions in order to
support competitive advantage as well as opportunities to
reduce costs and improve efficiencies, especially from estates
consolidation and automation within our labs. We also expect
that a greater focus on climate change will increase our
resilience from climate-related weather events, both within
our estate and across our supply chain, through resilience
planning and upgraded infrastructure as well as enhanced
preparedness and response procedures.
We also recognise our role in supporting clients to develop new
technology. We recognise that there may be opportunities
for new use cases for our existing test solutions to support
climate mitigation, in particular in the area of lab automation
and consolidation.
The Group is still exploring the opportunities that climate
change presents and therefore they have not been
incorporated into the modelling.
Scenario analysis
This was last reviewed in 2024 as part of the sustainability
materiality review, with only minor adjustments made.
The scenarios are aligned to the IPCC representation
concentration pathway (RPC) models. Given the period of
time we anticipate any impacts occurring, we do not believe
these scenarios have materially changed, although the United
States recent withdrawal from the Paris Climate Accord may
delay the adoption of low carbon technologies and policies,
as well as increase the likelihood of physical climate impacts.
We have defined modelling assumptions for both scenarios
for each relevant risk category in order to assess the financial
and commercial impact to the Group. The impact of each of
the risks identified above has been assessed, quantified and
considered in two climate change-related scenarios:
• aggressive mitigation – emissions halved by 2050, average
temperature increase of 1.5°C; and
• strong mitigation – emissions stabilised at half of today’s
emissions by 2080, average temperature increase of 2.4°C.
These scenarios were selected as they would include the
most aggressive policy responses (which are likely to have the
greatest impact on our business in the next three to five years)
and because we believe that aiming to limit climate change
to 1.5°C still remains the right policy objective.
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Spirent Communications plc Annual Report 2024
In terms of modelling horizon, we have considered the
impacts over the short, medium and long term, and with
regard to the occurrence of the risks identified and also in
comparing with the horizons adopted by peers, the most
appropriate time horizon to model is 15 years, which covers
short- to long-term). The most recent strategic three-year
plans have been extrapolated to form the base case
long-term plans from which to sensitise, using growth rates
and assumptions consistent with other forward-looking
financial statement items (goodwill impairment, viability)
and assumptions.
Given the modelling horizon, there is not likely to be a
significant difference between the two scenarios in relation to
our exposure to physical risks – a change of 1.5°C is expected
by 2030 under all scenarios, with the same likelihood and
distribution of extreme weather events and chronic changes
in weather patterns and temperatures. The major differences
appear between 2040 and 2080, which falls outside of the
scope of our long-term plans and provides sufficient time for
the business to adapt if required. In terms of transitional risk,
we do expect a difference between the two scenarios, most
notably in the size of increases to energy costs and the size of
anticipated carbon tariffs across all regions.
Based on the modelling we have performed and given
the significant financial headroom Spirent has, the relative
magnitude of the impact the risks present, the mitigation
plans, and the insurance cover in place, it is not anticipated
that the climate-related risks identified will have a material
impact in the short term, being less than 5 per cent of
revenue. The longer-term impact on the organisation’s
strategy and plans is currently being further assessed
but initial analysis does not suggest a significant financial
impact. Therefore, Spirent is considered resilient to climate
change-related scenarios.
Opportunities
As part of the scenario process, a number of opportunities
have been identified:
• reduction in costs and efficiency, especially in relation to
office estate and automation in labs;
• improved resilience from physical and transitionary risks;
• additional testing opportunities to support the development
of new technologies to mitigate and adapt to a changing
climate; and
• expanding demand for test solutions that help
reduce customer emissions, including lab automation
and efficiency.
Metrics and targets
We monitor carbon emissions sources that fall within Scope 1,
2 and 3 and report our carbon emissions annually within the
Annual Report and Sustainability Report (see page 34). We
have considered cross-industry climate-related metrics and
do not consider these to be material. The Executive Directors’
2024 performance share awards also include relevant
climate-related metrics and targets.
We have set clear targets to source electricity from 100 per
cent renewable sources, and work towards net zero carbon
by 2035. We have targeted a 25 per cent reduction in our
energy usage by 2025.
We have set a science-based target which commits us to a
short-term emissions reduction target of 15 per cent by the
end of 2025 and a medium-term target of 39 per cent by
2030. We will continue to evaluate whether additional metrics
and targets are required as part of our existing business
strategy and risk management processes, in particular
in relation to supply chain risks, as we further refine our
longer-term strategy and plans.
During the year, we have not identified any additional targets
and metrics to monitor.
Promote diversity and invest in people
We aim to take action on diversity. We will attract and develop
talent and skills, and support long-term sustainable growth.
Despite the initiatives and progress detailed below, due to
workforce reductions and limited hiring across the Group, our
diversity metrics remained flat compared to 2023.
Diversity in talent acquisition
We have a mature platform to support diversity in talent
acquisition which includes family-friendly benefits, and
support early career development and leadership. We
continued our partnerships with Historically Black Colleges
and Universities (HBCUs), Morgan State University and Prairie
View A&M University. In light of the acquisition process we
have undertaken very limited hiring.
Early career development
Spirent’s early career programme offers a structured
pathway into a career in technology through internships,
apprenticeships and university sponsorships. Our early
career pathway incorporates resources, tools and training
for managers and early career staff to help young, talented
people start a career in technology.
We operate research partnerships with universities across
the world through our Academia programme, and support
undergrad, post-grad and post-doctorate students in
their research.
Equality and diversity
The Group employs a diverse workforce and prides itself on
providing equal opportunities for all. High value is placed
on rewarding our people for their commitment, integrity
and service. Our commitment to being a fair and inclusive
workplace is governed by our Business Ethics and HR Policies
which ensure that no one is discriminated against, directly or
indirectly, on the grounds of colour, race, ethnic and national
origins, sexual orientation or gender, marital status, disability,
religion or belief, being a part-time employee, or age.
More detail can be found in our Sustainability Report
available on our website at corporate.spirent.com.
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Spirent Communications plc Annual Report 2024
Sustainability continued
Promote diversity and invest in people continued
Equality and diversity continued
At 31 December 2024, our gender diversity was:
Level of organisation
Female
Male
Other or no gender reported
Total
Board 3 38% 5 62% — — 8
Executive management
1
4 40% 6 60% — — 10
Senior management
2
6 9% 59 91% — — 65
Total employees 344 23% 1,146 77% — — 1,490
Notes
1. The data for executive management includes the CFO and direct reports to the CEO only, excluding executive assistants.
2. The data for senior management includes all other Vice Presidents (including Regional Sales VPs and Client Partner Executives) and Senior Directors.
The Board is committed to increasing the representation of women on boards and in other leadership roles. This work will
continue with a focus on developing diversity of all types in executive and senior management roles and throughout the
talent pipeline.
We aim to support our
employees to progress
personally and professionally
by investing in career
development, diversity and
inclusion initiatives, and health
and wellness programmes.
Ann Menard
Global Head of Human Resources
Gender pay gap
Having fewer than 250 employees in the UK, Spirent is
not currently required to comply with the Gender Pay Gap
Reporting Regulations introduced in 2017. However, data
for the 5 April 2024 snapshot date has been collected on
a voluntary basis and is set out in our Sustainability Report.
Business ethics and human rights
Spirent’s values and principles are set out in the Group’s
Business Ethics Policy. These principles apply to all dealings
with our customers, suppliers and other stakeholders, and
are considered in pre-contract due diligence and monitored
through ongoing supplier audits.
The Group has a zero-tolerance approach to all forms of
bribery and corruption. As a UK-registered Company, Spirent
Communications plc is bound by the laws of the UK, including
the Bribery Act 2010, in respect of its conduct both at home
and abroad. In addition, we will uphold all laws relevant to
countering bribery and corruption, including the US Foreign
Corrupt Practices Act, as well as human rights protection,
in all jurisdictions in which we operate.
Regular anti-bribery training is required to be taken by
certain employees.
Health and safety
The Board has designated the CFO as the Board member
responsible for health and safety within the Group and
procedures are in place for incidents to be reported through
the Audit Committee to the Board as necessary.
The health and safety risk profile for the Group remained
low during 2024, with no reported accidents (2023 nil). There
were no reportable accidents under the RIDDOR or required
hospitalisations during the year.
Training and skills
Spirent provides all its employees with a wide range of
technical and business training opportunities. We manage
training through personal development plans which are
assessed by all managers and updated periodically. During
2024, we rolled out training globally on the use of artificial
intelligence through a network of AI champions.
STEM initiatives and community impact projects
Spirent actively encourages its employees to become
STEM (science, technology, engineering and mathematics)
Ambassadors around the globe.
We provide all our employees with volunteering time off to
make a positive contribution to the communities in which
they work.
Through financial donations and volunteering, Spirent has
continued to support community projects worldwide.
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Spirent Communications plc Annual Report 2024
Operate responsibly
We operate with integrity. Over the last few years we have
worked towards implementing ISO 14001 management
system practices globally and achieving zero waste to landfill.
We have achieved ISO 14001 certification at 13 of our major
sites in EMEA and the US. We have incorporated circular
economy principles in our product design and reduced the
sustainability impacts of our supply chain.
In 2024, we published an eco-profile (a detailed disclosure
of the environmental performance of the product) for the
PNT X, a new product from our Positioning business. We also
completed more than 200 supplier sustainability assessments
for our most important vendors.
Vendor assessment and auditing
Vendors are required to abide by our Code of Conduct which
sets out our expectations for environmental management,
labour and human rights, health and safety, and business
ethics. They are assessed using a detailed questionnaire.
During 2024 we developed a new supplier ESG assessment
framework, which uses information from vendors’ public
disclosures to score their maturity across nine categories,
including commitment to sustainability, policies, modern
slavery and human trafficking, carbon emissions and
climate change, compliance, reputation and legal standing,
management systems and certifications, responsible material
sourcing, and responsible supply chain management.
We assessed more than 200 of our key suppliers and
“Risk A” vendors across the year. During 2025 we will
engage with these suppliers to obtain more information
and encourage them to more closely align their efforts
with our ESG objectives. More details can be found in our
Sustainability Report which is available on our website at
corporate.spirent.com.
Modern slavery and human trafficking
We comply with the requirements of the UK Modern Slavery
Act 2015 and the California Transparency in Supply Chains
Act 2010. We require slavery and human trafficking to be
eradicated from our direct supply chain for the products
we sell, and we monitor suppliers by performing regular
evaluation surveys to assure ourselves of each supplier’s
commitment in this area.
Spirent’s full Statement on Modern Slavery and Human
Trafficking can be found on the Company’s website at
corporate.spirent.com.
Electronic waste and use of hazardous materials
Spirent’s business units comply with the EU’s Waste Electrical
and Electronic Equipment Regulations 2013, the EU’s
Restriction of Hazardous Substances (RoHS) Directive,
the Battery Directive and the California Electronic Waste
Recycling Programme.
Conflict minerals
The Group is not directly required to comply with or report
under Section 1502 of the Dodd-Frank Act or the US Conflict
Minerals Law. However, it has robust procedures in place
to ensure that it would be in compliance if it were brought
within the scope of this legislation. The Group is subject to the
EU’s Directive on Conflict Minerals; we are monitoring the
development of the legislation and are confident our existing
practices meet the specifications required.
Information security
Spirent takes data security and privacy seriously. We
continually review the security of our data systems and
procedures in order to comply with all legislation and so we
can react to areas of heightened risk promptly and effectively.
We operate robust information security procedures and
our Applications & Security business (based at Plano and
Santa Clara) and our Positioning Technologies business
(based in Paignton) operate ISO 27001 certified information
management systems.
Our procedures restrict the type and quantity of confidential
information collected and stored and there are robust
procedures in place to protect customer data from
unauthorised access and disclosure.
Periodic information security risk assessments are performed,
and training is provided to staff with the aim of preventing
information security breaches. We have a whistleblowing
procedure in place for staff to report information security
or any other concerns.
Spirent has implemented a response procedure to manage
breaches of confidential information if they were to occur.
Confidential waste is shredded if in hard copy and certificates
of destruction are provided for electronic storage devices
disposed of at end of life.
Be accountable and transparent
We aim to communicate regularly with staff on our
FuturePositive strategy and the progress made.
The Board and Audit Committee oversaw our climate change
and sustainability programme.
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Spirent Communications plc Annual Report 2024
Note
1. Before other adjusting items of $1.2 million charged in 2024 (2023 $6.1 million). See note 3.
Operating review
Revenue
$181.0m
(2023 $199.1m)
Adjusted operating profit
1
$14.6m
(2023 $16.9m)
Lifecycle Service
Assurance
Our Lifecycle Service Assurance
portfolio boasts the industry’s
most comprehensive set of
end‑to‑end solutions aimed
at accelerating customers’
initiatives as they develop, deploy
and optimise new devices,
technologies and services. From
lab environment transformations
to pre‑production and live
networks, we dramatically
reduce the time, costs and risks
associated with bringing new
technologies such as 5G
Standalone (SA) and Wi‑Fi 7 to
market.
2024 performance highlights
• Important strategic wins with enterprise
customers, including Financial Services,
demonstrating greater diversity in our customer
base that will mitigate risks associated with
cyclical incumbency and drive future growth.
• Despite continuing 5G SA delays towards
commercial deployments during 2024, our
industry‑leading Landslide 5G Core test solution,
which is pivotal for 5G SA and 5G Advanced, was
selected by over 50 customers including Tier‑1
operators, hyperscalers and equipment vendors.
• Large multi‑year order growth at customers
where we have an incumbency.
• Good order growth in Europe with Tier‑1 telecom
service providers for lab and test automation.
• As a result of the ongoing challenging telecom
market in 2024, trading performance was
reduced compared to 2023. We did however
see order pipeline momentum in the latter part
of the year.
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40
Spirent Communications plc Annual Report 2024
FWA benchmarking
Validating fixed wireless access
performance nationwide
Challenge:
A leading US telecom operator is expanding its fixed
wireless access (FWA) services, aiming to deliver high‑
speed 5G internet directly to the homes of subscribers
across the country. With data rates and performance
important in attracting and retaining customers, the
operator was determined to ensure its offerings met
advertised data rates and performance levels.
Solution:
The operator partnered with Spirent to conduct
comprehensive tests across several major cities,
measuring data, video and gaming performance. The
study provided a side‑by‑side comparison with other
operators, highlighting the effects of mobility, peak
usage times and varied spectrum strategies on FWA
reliability. Equipped with Spirent’s granular field‑testing
data, the operator was able to validate that its services
met market expectations, while also pinpointing
opportunities for optimisation and adjustments that
could further enhance user experience.
Impact:
This comprehensive test data is offering invaluable
insights beyond high‑level crowdsourced statistics,
with specific metrics on 5G link performance directly
relevant to the operator’s network. Empowered by
the unique value of the results, the operator plans
to expand this testing initiative to additional cities
during 2025.
Strategy
Our Lifecycle Service Assurance strategy is: 1) deliver
a leading active assurance platform for 5G and next‑
generation service delivery and user experience assurance;
2) help service providers and enterprises automate critical
lab environments and test activities, as the industry moves
towards an always‑on continuous test environment; and
3) leverage our product offerings, together with our unique
test and assurance expertise, to deliver a new portfolio of
outcome‑driven service offerings. Three key attributes set
Spirent apart in the Lifecycle Service Assurance market:
Automation
Automation continues to become a growing priority across
both the telecom ecosystem and enterprises, with the
objective of improving agility and operational efficiency.
Legacy labs, testing and service assurance activities have
been mostly siloed, manual, reactive and time consuming.
As continuous integration and continuous delivery (CI/CD)
principles become mainstream, automated testing and
assurance are becoming essential to support the CI/CD
model across all layers. Automation enables use cases such
as lab transformation, new service activation, continuous
monitoring and automated troubleshooting to be seamlessly
integrated with network management systems, with a goal
of establishing fully autonomous operations. Spirent is at the
forefront of this journey.
Coverage
Spirent is the only vendor to offer both lab and live solutions
as both a contiguous and continuous test offering. With the
broadest coverage in the industry, from the user device
into the radio access network, across the cloud and mobile
backhaul, and into the mobile core, our solutions provide the
broadest end‑to‑end visibility in the industry. The breadth and
depth of our expertise and our portfolio enables us to quickly
address net‑new opportunities including direct‑to‑device
communications from non‑terrestrial networks and
next‑generation access networks.
Analytics
Spirent continues to advance our machine learning (ML)
and artificial intelligence (AI) based analysis providing
actionable insights that allow our customers to detect,
isolate and eliminate potential service interruptions or
degradations before subscribers are impacted. This in turn
allows rapid reduction in mean time to repair by alleviating
the unnecessary escalations typically found in traditional
operational support models.
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Spirent Communications plc Annual Report 2024
What we test and assure
Our Lifecycle Service Assurance offerings support the full
lifecycle for any new technology rollout. From pre‑production
test and validation to post‑production troubleshooting, to
transforming labs and processes into agile continuous test
environments through automation, we help our customers
maximise the monetisation of any new technology and reduce
costs. The following key areas were instrumental in growing
pipeline and offer continued expansion opportunities into
2025 and beyond:
Enterprise and telecom lab
transformation (automation)
Enterprises and telecom providers are prioritising
digitisation programmes aimed at improving efficiency,
reducing costs and meeting regulatory requirements.
The automation of lab environments, testing, lifecycle
management activities and network operations is at the
heart of these programmes. Spirent’s lab and test automation
solutions enable customers to consolidate and transform
physical labs into web accessible resources for remote,
automated testing. In 2024 we won multiple lab automation
deals with enterprise and telecom providers, creating
a platform to upsell a broader array of our test solutions
including security and cloud‑native resilience.
Operating review continued
5G core
For both standalone and non‑standalone flavours of
5G, Spirent provides continuous testing capability across
the entire lifecycle for any initiative. Beginning with the
network equipment manufacturer, through service provider
deployments and enterprise service consumption, our 5G
offering bridges the gaps traditionally found between the
develop, deploy and operate phases of a new technology.
Focus areas include 3GPP network function testing,
interoperability, performance and security testing. In 2024 we
enhanced our 5G core solution with support for cloud‑native
resilience testing to support service providers to safely operate
their 5G networks on private or public cloud infrastructure.
Wi-Fi
Following the acquisition of octoScope in 2021, Spirent is the
market leader in Wi‑Fi test and certification. With the adoption
of Wi‑Fi 6E in full swing and Wi‑Fi 7 released in 2024,
Spirent enhanced its early support for Wi‑Fi 7 testing during
2024 to provide automated testbeds specifically designed
to comprehensively test access points, devices and mesh
systems, revolutionising testing for a range of devices, from
phones and virtual reality goggles to refrigerators and drones.
Lifecycle Service Assurance continued
Cloud‑native
network testing
Ensuring network resilience
in critical situations
Challenge:
Preparing for 5G nationwide rollout, a leading Turkish
telecommunications and digital services provider
needed to ensure robust emergency connectivity
for a region prone to earthquakes, where natural
disasters can overwhelm networks with simultaneous
calls. Serving over 40 million subscribers, the operator
wanted to enhance its core network’s resilience to
support critical communication during seismic events.
Solution:
Partnering with Spirent, the provider deployed the
Landslide solution to simulate peak emergency traffic,
enabling it to test core network performance under
controlled, disaster‑like conditions. By replicating high‑
stress scenarios, the operator can verify its network’s
ability to handle sudden surges in demand, supporting
essential communication without interruption.
Impact:
With this capability, the operator can assure subscribers
that emergency calls will reach loved ones or services
when needed most. Typically, testing is only performed
in a lab environment, but with Landslide’s capabilities,
the service provider obtained government and
regulatory approval to perform testing on the live
network during scheduled maintenance windows,
elevating preparedness standards.
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Spirent Communications plc Annual Report 2024
Performance
Lifecycle Service Assurance revenue was $181.0 million and
was impacted during the first half of the year by continuing
macroeconomic challenges, which saw our telecom
customers enforce strict cost discipline and delay spending,
especially towards 5G. In the fourth quarter we saw positive
signs that spending is beginning to return in our major
addressable markets.
The impact was primarily felt on our wireless (5G radio)
test portfolio as service providers delayed 5G coverage
expansions, but we saw positive momentum around our
mobility (5G core) solutions as leading operators prepare
for their 5G SA upgrades, including several large multi‑
year orders.
We saw strong progress in our lab and test automation
portfolio as we continued to expand capabilities, allowing
us to move into adjacent enterprise markets, with multiple
new orders from Financial Services organisations
demonstrating the broader applicability and market
opportunity of our portfolio.
Accomplishments
Our lab to live portfolio for 5G SA core networks continued
to expand, with the addition of cloud‑native function (CNF)
resilience testing to our market‑leading Spirent Landslide
solution to continuously test the impact of CNF performance
on the delivery of 5G SA services, allowing service providers
to safely operate their 5G networks on private or public
cloud infrastructure.
We continued to grow our automated lab to live footprint
through multiple orders with Tier‑1 service providers
in Europe and North America, to support them on their
transition and ongoing lifecycle management of 5G SA
including 5G core, security and CNF resilience testing, lab
transformation and continuous delivery integration.
We continued to advance our diversification strategy
towards enterprises and specifically Financial Services,
with multiple new orders for our market‑leading lab
transformation and automation portfolio to support their
digital transformation programmes and time‑critical
regulatory compliance requirements.
Spirent’s industry‑leading automated modular test
platform for Wi‑Fi devices, Octobox™ added significant
enhancements for Wi‑Fi 7 testing including the world’s first
pre‑configured automated testbed, designed specifically
to accelerate testing, validating and optimising the
performance of consumer endpoint devices connected to
Wi‑Fi 7, which revolutionises the testing for a large range
of devices, from phones and virtual reality goggles to
refrigerators and drones.
Our diversification strategy is
continuing to rapidly advance
and deliver results, and in 2024
we secured multiple new wins for
Financial Services automation
and test, representing important
progress as we develop a growing
pipeline and reputation in
this segment.
Doug Roberts
General Manager, Lifecycle Service Assurance
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Spirent Communications plc Annual Report 2024
Note
1. Before other adjusting items of $1.3 million charged in 2024
(2023 $7.3 million). See note 3.
Operating review continued
Revenue
$279.2m
(2023 $275.2m)
Adjusted operating profit
1
$44.9m
(2023 $39.0m)
Networks & Security
Networks & Security is a world
leader in high‑speed Ethernet/
internet protocol (IP) performance
testing and automotive Ethernet,
and develops test methodologies,
tools and services for virtualised
networks and data centre
connectivity fabrics, including
AI and the cloud. We provide
consulting services, test tools,
methodologies and proactive
security validation solutions.
We are leveraging our world
leadership in global navigation
satellite system (GNSS) simulation
solutions and services as we
expand further into the broader
positioning, navigation and
timing (PNT) market including
low earth orbit (LEO) satellites
and autonomous vehicles.
2024 performance highlights
• We continued to demonstrate our leadership in
800G high‑speed Ethernet testing which is critical
for the evolution of data centres to underpin AI
growth, including orders with leading network
infrastructure suppliers and cloud hyperscalers,
and won the industry’s coveted Interop Best
of Show Award 2024 “Grand Prize” for our AI
emulation solution.
• We released our new Positioning test and
simulation product (PNT X) in April to underpin
our market leadership and see new opportunities
in the emerging LEO satellite market.
• We continued to expand our Positioning
business into civil aviation and automotive
verticals, including supporting the creation of
a groundbreaking new automotive positioning
standard in China, which has global implications
for the automotive sector.
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Spirent Communications plc Annual Report 2024
AI traffic simulation testing over Ethernet
Validating hyperscaler’s high‑speed Ethernet network for AI workloads
Challenge:
As AI is transforming the industry, a leading AI‑focused
hyperscaler building the next‑generation public cloud
needed to perform critical 800G Ethernet fabric testing
and assurance, to ensure optimal performance for
AI workloads.
Solution:
Identifying Spirent as a leading Ethernet innovator, the
hyperscaler selected Spirent’s B3 800G™ Appliance
to help it optimise the performance of high‑speed
Ethernet infrastructure required to support AI‑driven
applications. Hyperscalers globally are continuing
to scale rapidly to meet the dramatic demand for
accelerated compute solutions, critical for training and
serving the most sophisticated AI models. By utilising
Spirent’s 800G Ethernet solution, this hyperscaler now
has a rigorous, high‑scale testing capacity to evaluate
bandwidth and resource utilisation.
Impact:
The Spirent solution will help the hyperscaler to test and
validate its infrastructure’s readiness for bandwidth‑
intensive AI workloads, while maintaining optimal
network efficiency, balancing efficiency and sustainability,
and monetising its AI Ethernet infrastructure investments.
This will help accelerate 800G deployments and enable
the networking industry to power new applications
running AI and machine learning.
Strategy
We are maintaining and expanding our market leadership
in high‑speed Ethernet test, with a focus on diversifying our
customer base into data centres and enterprises, driving
growth through involvement in all stages of next‑generation
network and cloud infrastructure development, from
verification of pre‑silicon and silicon to high‑density,
high‑capacity systems.
We are working to drive industry standards that enable
rapid adoption of technologies such as generative artificial
intelligence (AI), post‑quantum cryptography, cloud, secure
access service edge (SASE)/zero trust and automotive
Ethernet, expanding our test domain expertise and delivering
more managed services.
We are addressing additional enterprise and government
demands through partnerships with network equipment
manufacturers, cloud providers and service providers on
performance and security validation essential for their
development and deployment, with solutions and services
addressing AI data centres, telecom IP‑transport networks,
enterprise networking, cloud and edge computing and
SASE environments.
We are building on our global PNT test leadership, extending
our reach and influence as the trusted partner of researchers,
developers and integrators in the field of PNT technology.
Our broad portfolio of solutions and managed services
is increasingly multi‑sensor oriented, assuring that our
customers in growth segments such as civil aviation, LEO
satellites, chipsets and automotive technologies are able to
achieve their PNT ambitions.
We are leveraging our subject expertise gained from
design and verification of GNSS technologies in the lab
into geospatial prediction services to help ensure safe and
reliable navigation of vehicles and aircraft including drones
and devices.
What we test and assure
High-speed Ethernet/IP, cloud and virtualisation
Our high‑speed Ethernet/IP, cloud and virtualisation test
solutions enable network vendors, carriers and cloud
service providers to test the performance and security of
next‑generation networks, applications and data centre
connectivity fabrics by simulating real‑world conditions in the
lab and on the network. Our portfolio addresses physical data
centres and virtualised networks, applications and services.
Our solutions enable architects, developers and test engineers
to create and transmit complex and high‑capacity traffic
and safely assess the performance, scalability and resilience
of their products. Our customers benefit from our wide
network of industry partnerships and active contributor role in
standards development, enabling them to leverage the latest
technology and best practices.
Applications performance and cybersecurity
Spirent is a single source for security assurance of all network
infrastructure elements. We provide comprehensive security
and performance validation capabilities covering all elements
of any production environment: physical and virtual security
domains, distributed edge, 5G and Internet of Things use
cases, whether legacy or virtualised and cloud. Our flexible
solutions and services offerings provide hyper‑realistic
assessment based on real‑world application, service
and threat traffic emulation.
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Spirent Communications plc Annual Report 2024
What we test and assure continued
Positioning, navigation and timing
We are market leaders in addressing the PNT research and
development, verification and integration testing needs
of customers from national government, military and
space contractors to commercial PNT chipset and device
developers, automotive, precision agriculture and survey
players. Our market‑leading radio frequency simulation
environments and record/playback systems offer a practical
and robust framework to audit receiver, system or application
resilience in the face of increasing threats to GNSS‑based
PNT. We are leaders in the testing of hybrid positioning and
sensor fusion under real‑world conditions for connected and
autonomous vehicle development. Our latest innovation is
a patented service that provides forecasts of GNSS signal
performance to assure safe and reliable navigation in
live deployment scenarios for the aviation (e.g. drones),
automotive and other industries.
Operating review continued
Performance
We delivered revenue growth in 2024 despite challenging
market conditions in the telecommunications sector which
remained impacted by macroeconomic uncertainty, and
some customer hesitancy resulting from our recent takeover
announcements; the Networks & Security segment revenue
was $279.2 million. We continued to focus on new growth
markets including data centre networking needs to support AI
where we saw growing momentum for our new AI emulation
solution, and earlier stages of the R&D lifecycle around
pre‑silicon testing where we secured several strategic wins
and have a strengthening pipeline. As a result, adjusted
operating profit was $44.9 million (2023 $39.0 million).
With the Chinese economy continuing to be challenged in
2024, we focused on other markets where there is significant
momentum for AI‑related initiatives with service providers
and network equipment manufacturers and we are well
positioned and suited to capture this anticipated growth
in AI spend.
Our Positioning business, which operates within diversified
end markets, saw market share gains built on expansion
into new sectors and through new product leadership. We
continued to see solid spending in government and commercial
markets, reinforcing our position as market leader. We also saw
continued pipeline momentum into larger addressable markets
in LEO, aerospace and automotive.
Networks & Security continued
Pre‑silicon verification for AI
Fast‑tracking Ethernet chip development for AI data centre networking
Challenge:
In response to the growing demands for high‑speed
Ethernet solutions, Siemens was looking to bring chipset
testing to pre‑silicon verification. The aim was to develop
a verification solution to reduce complexity and accelerate
the silicon creation lifecycle, paving the way for faster
Ethernet chip development tailored for AI data centre
networking.
Solution:
Siemens partnered with Spirent to develop a sophisticated
pre‑silicon system‑on‑chip verification solution for AI
data centre networking over Ethernet by integrating
Spirent’s renowned TestCenter Virtual into Siemens’
Virtual Ethernet test software for Veloce™. The result
is a solution that brings sophisticated real‑world
Ethernet traffic testing capabilities, traditionally only
available in post‑silicon validation, to the pre‑silicon
verification process.
Impact:
By identifying issues early in the design cycle, the virtual
solution accelerates the entire silicon development process,
reducing risks and expediting product launches. The
solution supports dynamic traffic patterns in AI fabric
communications without constraints. New features can
be added quickly to enable new use cases as needed,
and early‑stage testing reduces the need for costly
hardware upgrades and complex deployments, delivering
a cost‑effective alternative for chipset development.
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Spirent Communications plc Annual Report 2024
Accomplishments
High-speed Ethernet/IP, cloud and virtualisation
• Our leadership in 800G Ethernet was highlighted with
a major AI‑focused hyperscaler, helping it test critical
800G Ethernet fabric to ensure optimal performance,
efficiency and sustainability for AI workloads. As demand
in next‑generation cloud and data centre networking
testing for AI gathers pace in 2025, we anticipate growth
for our 800G test solutions and early demand for our
next‑generation 1.6 terabit offering.
• We released our pioneering AI emulation solution for data
centre AI Ethernet networking fabric and were honoured
with the coveted Interop Tokyo 2024 Best of Show Award
“Grand Prize”, chosen by a panel of leading industry
analysts and experts.
• We collaborated with Siemens Digital Industries Software
to deliver a sophisticated pre‑silicon test solution for
Ethernet chipset design verification. The joint networking
system‑on‑chip verification solution paves the way for
faster Ethernet chip development tailored for uses such as
data centre AI networking.
Applications performance and cybersecurity
• We released a powerful new multi‑speed appliance
to support hyperscalers and their network and security
vendors test the limits of next‑generation application
delivery, AI flow performance and security effectiveness.
• We saw growing momentum with Financial Services
as they look to test the resilience and security of their
networks to meet regulatory requirements and deal with
the increased frequency and severity of cyberattacks.
• We delivered first to market support for post‑quantum
cryptography ciphers to support the growing threat of
“harvest now, decrypt later” attacks.
Positioning, navigation and timing
• We released our new Positioning test and simulation
product (PNT X) in April to underpin our market
leadership and see new opportunities in the emerging
LEO satellite market.
• We continued to expand our Positioning business
into civil aviation and automotive verticals, including
supporting the creation of a groundbreaking new
automotive positioning standard in China, which
marks a pivotal moment for automotive sector safety
and positioning accuracy. It is expected to become a
regulatory requirement for all vehicles being sold in
China from next year and has global implications for
the automotive sector.
We are proud to support our
customers with our award-winning
800G and AI workload emulation
platforms for Ethernet, which
position us well for the rapidly
growing data centre AI market,
while demand for our ultra-high-
performance network security
and application test platform
continues to grow.
Aniket Khosla
Vice President - Product Management, Wireline
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Spirent Communications plc Annual Report 2024
Group overview
Despite the industry‑wide slowdown and continued
challenging market conditions, we saw early signs of market
recovery, particularly in the final quarter of the year which
saw a good uptick of order growth.
As previously stated, the telecommunications sector
continued to be very challenging in 2024. By continuing
to invest in our leading products, we have been able to
support our customers as they continue to progress their 5G
related rollout programmes focusing on targeted network
expansions and improved quality and coverage. We saw
good growth in EMEA across the year, and some recovery
in North America in the second half, offset by a reduction
in China, due to ongoing economic challenges, which
resulted in full year revenue of $460.2 million, compared
to $474.3 million for 2023. Adjusted operating profit grew
to $46.2 million from $45.2 million. Effective supply chain
management and robust customer pricing meant gross
margin was maintained at 72 per cent. The orderbook
closed up 6 per cent at $312.1 million (2023 $293.7 million),
providing a solid base as we move into 2025.
Other adjusting items were $21.1 million (2023 $14.2
million) comprising mainly adviser costs of $18.2 million
(2023 nil) relating to the acquisition of Spirent, the majority
of the remainder being restructuring and strategic
evaluation costs of $2.5 million (2023 $13.5 million).
Adjusting items are further detailed on page 51.
The effective tax rate remained flat at 10.7 per cent (2023
10.8 per cent). Adjusted basic earnings per share increased
by 2.6 per cent, up from 7.55 cents last year to 7.75
cents for 2024.
Our approach to strong financial management and focus
on our balance sheet remain in place. Cash increased to
$141.8 million (2023 $108.1 million).
Financial review
Revenue
$460.2m
(2023 $474.3m)
Gross margin
72%
(2023 72%)
Closing cash
$141.8m
(2023 $108.1m)
Enduring
effective financial
management,
despite
challenging
environment
Paula Bell
Chief Financial & Operations Officer
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Spirent Communications plc Annual Report 2024
The following table shows summary financial performance for the Group:
$ million 2024 2023
Change
(%)
Orderbook
1
312.1 293.7 6.3
Order intake
2
479.0 477.0 0.4
Revenue 460.2 474.3 (3.0)
Gross profit 331.5 343.6 (3.5)
Gross margin (%) 72.0 72.4 (0.4pp)
Adjusted operating costs
3
285.3 298.4 (4.4)
Adjusted operating profit
3
46.2 45.2 2.2
Reported operating profit 10.3 18.4 (44.0)
Reported profit before tax 13.8 22.9 (39.7)
Effective tax rate
4
(%) 10.7 10.8 (0.1pp)
Adjusted basic earnings per share
5
(cents) 7.75 7.55 2.6
Reported basic earnings per share (cents) 2.25 4.30 (47.7)
Closing cash 141.8 108.1 31.2
Notes
1. Orderbook is an alternative performance measure as defined in the appendix on page 195.
2. Order intake represents commitments from customers to purchase goods and/or services that will ultimately result in recognised revenue.
3. Before acquired intangible asset amortisation, share‑based payment and other adjusting items amounting to $35.9 million in total (2023 $26.8 million).
4. Effective tax rate is the adjusted tax charge before tax on adjusting items, expressed as a percentage of adjusted profit before tax.
5. Adjusted basic earnings per share is based on adjusted earnings as set out in note 11 of Notes to the full year consolidated financial statements.
Note on Alternative Performance Measures (APM)
The performance of the Group is assessed using a variety of performance measures, including APMs which are presented to
provide users with additional financial information that is regularly reviewed by management. These APMs are not defined
under IFRS and therefore may not be directly comparable with similarly identified measures used by other companies.
The APMs adopted by the Group are defined on pages 195 and 196. The APMs which relate to adjusted income statement lines
are presented and reconciled to GAAP measures using a columnar approach on the face of the income statement and can be
identified by the prefix “adjusted” in the commentary. All APMs are clearly identified as such, with explanatory footnotes to the
tables of financial information provided, and reconciled to reported GAAP measures in the Financial Review or Notes to the full
year consolidated financial statements. The reported GAAP measures give the complete measure of financial performance.
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Spirent Communications plc Annual Report 2024
Financial review continued
Revenue
$ million 2024 % of total 2023 % of total
Revenue by segment
Lifecycle Service Assurance 181.0 39.3 199.1 42.0
Networks & Security 279.2 60.7 275.2 58.0
460.2 100.0 474.3 100.0
Revenue by geography
Americas 273.3 59.4 268.1 56.5
Asia Pacific 126.3 27.4 153.9 32.5
Europe, Middle East and Africa 60.6 13.2 52.3 11.0
460.2 100.0 474.3 100.0
Overall Group revenue declined by 3 per cent, with Lifecycle Service Assurance down 9 per cent and Networks & Security
up 2 per cent, respectively, compared to the prior year.
Revenue in Lifecycle Service Assurance was lower in the first half of the year due to the continued customer spending delays
particularly in the telecommunications market. We have a growing orderbook for our test assurance solutions. We experienced
decline from legacy products such as the channel emulator whilst we are seeing momentum in new customer segments for our
test and assurance solutions. Nonetheless, progress was made in the fourth quarter of the year and Lifecycle Service Assurance
has continued to expand its capabilities, allowing a move to adjacent enterprise markets, with multiple new orders from
Financial Services organisations.
Networks & Security’s growth was boosted by a good performance from our High‑Speed Ethernet products and growing order
pipeline in Positioning, which was supported by positive take up of a new product line.
Revenue in the regions saw growth in the Americas and EMEA compared to the prior year, and a decline in Asia Pacific, which
was principally as a result of macroeconomic factors in China.
Gross margin
$ million 2024 % 2023 %
Lifecycle Service Assurance 133.3 73.6 147.8 74.2
Networks & Security 198.2 71.0 195.8 71.1
331.5 72.0 343.6 72.4
Gross margin remained steady at 72 per cent (2023 72 per cent) driven by effective supply chain management and robust
customer pricing.
Operating costs
$ million
Adjusted
1
2024
Reported
2024
Adjusted
1
2023
Reported
2023
Product development 99.0 99.0 102.4 102.4
Selling and marketing 126.3 126.3 133.9 133.9
Administration 60.0 95.9 62.1 88.9
Operating costs 285.3 321.2 298.4 325.2
Lifecycle Service Assurance 118.7 119.9 130.8 136.9
Networks & Security 153.3 154.6 156.9 164.2
Corporate 13.3 46.7 10.7 24.1
Operating costs 285.3 321.2 298.4 325.2
Note
1. Before acquired intangible asset amortisation, share‑based payment and other adjusting items amounting to $35.9 million in total (2023 $26.8 million).
The continued close management of our cost base, and the result of initiatives implemented at the end of 2023, resulted in
adjusted operating costs savings which was offset by higher incentive accruals (2023 nil). Actual reported costs increased in
2024 due to acquisition related costs.
We have continued to protect our technical leadership and ongoing investment in product development. Costs decreased year on
year from $102.4 million to $99.0 million, driven by initiatives mainly taken in late 2023 as we transferred activities to lower‑cost
regions. Our investment has led to promising new launches – a new PNT X solution has been welcomed by new customers and our
Wi‑Fi 7 solution is seeing early momentum. Our new AI High‑Speed Ethernet solution and a new Automation solution are winning
new customers in Communications and Financial Services.
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Spirent Communications plc Annual Report 2024
Sales and marketing costs decreased by $7.6 million, from $133.9 million to $126.3 million, due to a successful reorganisation
of our EMEA sales model which now includes more channel partners and less staff. The reorganisation drove increased orders
from this region.
Operating profit
$ million 2024
Adjusted
operating
margin
1,2
% 2023
Adjusted
operating
margin
1,2
%
Lifecycle Service Assurance 14.6 8.1 16.9 8.5
Networks & Security 44.9 16.1 39.0 14.2
Corporate (13.3) (10.7)
Adjusted operating profit
1
46.2 10.0 45.2 9.5
Adjusting items:
Acquired intangible asset amortisation (5.2) (5.0)
Share‑based payment (9.6) (7.6)
Other adjusting items (21.1) (14.2)
Reported operating profit 10.3 18.4
Notes
1. Before acquired intangible asset amortisation, share‑based payment and other adjusting items amounting to $35.9 million in total (2023 $26.8 million).
2. Adjusted operating profit as a percentage of revenue in the period.
Adjusted operating profit increased to $46.2 million (2023 $45.2 million).
Total adjusting items of $35.9 million in 2024 increased from $26.8 million in 2023, mainly due to the increase in acquisition
related transaction costs relating to the acquisition of the Group by Keysight.
Therefore, reported operating profit declined to $10.3 million (2023 $18.4 million), reflecting the adviser costs relating to the
acquisition of Spirent.
Acquired intangible asset amortisation and share-based payment
The acquired intangible asset amortisation charge increased slightly over the prior year to $5.2 million (2023 $5.0 million) due to
the amortisation of the intangible assets recognised on the acquisition of the NetScout business carve‑out in September 2023.
Share‑based payment increased to $10.1 million in 2024 (2023 $7.7 million), of which $9.6 million (2023 $7.6 million) has been
treated as an adjusting item.
Other adjusting items
$ million 2024 2023
Restructuring 2.5 13.5
Acquisition related costs 18.6 0.7
21.1 14.2
Restructuring
$ million 2024 2023
R&D engineering plan — 0.7
Finance transformation 1.2 1.1
Organisational restructure 0.8 8.8
Facilities downsize 0.5 2.9
2.5 13.5
Restructuring
We concluded our R&D engineering site plan to relocate activities from North America to lower‑cost regions for our High‑Speed
Ethernet business in 2023. No further significant costs are expected in relation to this project.
In 2023, to embed standardised global finance processes, we moved certain accounting activities from North America to the UK,
incurring $1.1 million of costs including $0.5 million of consultancy costs. In 2024, we moved into the next phase of the initiative,
incorporating the review of key global process and/or control enhancements, incurring further consultancy costs of $0.9 million.
Strategic actions were taken to review the cost base and facility footprint in the second half of 2023 and we exited and
downsized three of our North American facilities which gave rise to a non‑cash $2.9 million impairment of assets in 2023.
The 2024 amounts relate to moving, relocating and downsizing costs directly attributable to this project.
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Spirent Communications plc Annual Report 2024
Other adjusting items continued
Acquisition related costs
In March 2024, Keysight announced its intention to purchase
Spirent. Therefore, the costs of $18.2 million recognised in
2024 relate mainly to professional advisory charges due to
this acquisition. We expect further deal related charges, the
majority of which are expected to be incurred when the deal
is closed.
On 8 September 2023, the Group completed the asset purchase
of a small Test Lab Automation business carve‑out from
NetScout Inc. Retention costs of $0.4 million were incurred
during 2024 (2023 $0.7 million).
The tax effect of other adjusting items is a credit of $0.8 million
(2023 $2.5 million).
The total cash outflow in respect of other adjusting items is
reported within cash flows from operating activities in the
consolidated cash flow statement.
Currency impact
The Group’s revenue and costs are primarily denominated in
US Dollars or US Dollar‑linked currencies. Currency exposures
arise from trading transactions undertaken by the Group in
foreign currencies and on the retranslation of the operating
results and net assets of overseas subsidiaries.
The Group’s income statement includes a foreign exchange
loss, included in administration costs, of $0.5 million (2023
$0.9 million loss) arising from transacting in foreign currencies,
primarily US Dollars, in the United Kingdom, and the
translation of foreign currency cash balances.
Forward foreign currency exchange contracts are entered into
to manage the exposure arising from transacting in currencies
other than US Dollars.
Although the most significant currency exposure arises in
relation to movements in Pound Sterling against the US Dollar,
there are other less significant currency exposures, notably the
Euro and Chinese Yuan.
Finance income and costs
Interest income of $4.1 million was earned from bank interest
(2023 $4.8 million) and $0.4 million (2023 $0.6 million) of
interest income was recognised in relation to the UK defined
benefit pension plans. Surplus funds are held principally in the
United Kingdom and United States on short‑term or overnight
deposits and earn market rates of interest.
Finance costs in 2024 were $1.0 million (2023 $0.9 million),
relating to interest on lease liabilities.
Tax
The adjusted effective tax rate, being the adjusted tax charge
expressed as a percentage of adjusted profit before tax
shown on the face of the consolidated income statement, was
10.7 per cent in 2024, compared with 10.8 per cent in 2023.
Spirent’s effective tax rate continues to benefit from the
United Kingdom Patent Box Scheme, the United States
R&D Tax Credit, and the US foreign‑derived intangible
income deduction.
Earnings per share
Adjusted basic earnings per share was up 2.6 per cent
to 7.75 cents (2023 7.55 cents). Basic earnings per share
was 2.25 cents (2023 4.30 cents). There were 574.6 million
(2023 586.7 million) weighted average Ordinary Shares
in issue. See note 11 of Notes to the full year consolidated
financial statements on page 152 for the calculation of
earnings per share.
Treasury management
The key objective of the Group’s treasury function is to
manage the financial risks of the business and to ensure
that sufficient liquidity is available for the Group. All treasury
activity operates within a formal control framework. The
Board has approved treasury policies and guidelines and
periodically reviews treasury activities. Additionally, it is the
Group’s policy that speculative treasury transactions are
expressly forbidden.
Spirent’s financial risk management objectives and policies
and its exposure to risks are discussed in note 28 of Notes to
the full year consolidated financial statements.
Financial review continued
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Spirent Communications plc Annual Report 2024
Financing and cash flow
Cash flow from operations was $57.0 million in 2024 (2023 $45.8 million) driven by strong focus on working capital, which saw
reductions in our inventory levels partially offset by an increase in receivables arising from our strong fourth quarter trading.
Cash flow from operations is detailed in note 32 (page 169). An explanation on free cash flow as an alternative performance
measure can be found on page 196.
Free cash flow is set out below:
$ million 2024 2023
Cash flow from operations 57.0 45.8
Tax paid (5.1) (13.9)
Net cash inflow from operating activities 51.9 31.9
Interest received 4.5 5.4
Net capital expenditure (7.3) (6.1)
Capitalised development costs (4.5) —
Payment of lease liabilities, principal and interest (9.2) (8.8)
Lease payments received from finance leases 0.3 0.6
Acquisition related other adjusting items (note 5): 18.6 0.7
Free cash flow 54.3 23.7
Net capital expenditure of $7.3 million was broadly similar to the same period last year (2023 $6.1 million) and was
predominately related to equipment and leasehold improvements.
No dividend was paid in 2024 (2023 $46.5 million) and no shares were purchased or placed into the Employee Share
Ownership Trust (ESOT) in 2024 and 2023.
Cash closed at $141.8 million at year end (2023 $108.1 million). There continues to be no bank debt.
Defined benefit pension plans
The Group operates two funded defined benefit pension plans in the United Kingdom which are closed to new entrants.
In October 2022, the Trustees of the Staff Plan, with the Group’s support, purchased a bulk annuity insurance (buy‑in) policy from
the UK insurer Pension Insurance Corporation (PIC) covering all members. The premium was paid from the plan’s assets, and
sufficient assets remain to meet the plan’s ongoing costs. This buy‑in effectively transferred the investment, inflation, longevity
and demographic risks to PIC, meaning the Group no longer bears these risks. Following the buy‑in, the Group does not expect
to make any further cash contributions to the Staff Plan. Cash contributions for 2024 were nil (2023 nil).
Following a detailed data cleansing process and payment of the final top‑up premium to PIC, the wind‑up of the Staff Plan
was initiated in November 2024. The Group has determined that following this step it no longer has an unequivocal right to
the surplus, as the Trustees have discretion to use part, or all, of the surplus to enhance members’ benefits without requiring
Group approval. As a result, for the purposes of these disclosures, the Staff Plan surplus has been restricted to nil at the year end
(2023 $6.7 million). The Trustees are currently in the process of informing members of the wind‑up and the Group’s expectation
is that the Trustees will pay the bulk of the surplus to the Group, net of any tax due, once all wind‑up expenses have been met.
The accounting valuation of the funded defined benefit pension plans at 31 December 2024 was a net surplus of $0.5 million
(31 December 2023 net surplus of $6.7 million).
There is also a liability for an unfunded plan in the UK of $0.5 million (31 December 2023 $0.5 million).
The Group operates an unfunded deferred compensation plan for employees in the United States. At 31 December 2024,
the deficit on this deferred compensation plan amounted to $10.5 million (31 December 2023 $9.2 million).
Balance sheet
The consolidated balance sheet is set out on page 128.
Net assets increased by $16.7 million to $392.5 million at 31 December 2024, from $375.8 million at 31 December 2023.
Overall, the increase in net assets is a result of the positive levels of cash generated from operations, offset by the reduction in
pension surplus of $7.3 million (due to the initiation of the wind‑up of the Staff Plan) and an increase in trade and other payables
of $12.8 million, primarily due to the increase in incentive accruals compared to the previous year.
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Spirent Communications plc Annual Report 2024
Liquidity and dividend policy
The Board’s intention is to maintain a cash positive balance
sheet over the medium to long term. This should allow
the Company to maintain a strong capital position in the
face of business risks, trading fluctuations and working
capital demands.
The cash generation of the Group allows continued investment
into R&D to maintain our market‑leading positions and
inorganic investments where opportunities support growth
plans. If and when it is considered appropriate, the Company
may take on modest gearing to fund inorganic investments.
The Board will regularly review the Company’s balance
sheet in light of current and expected trading performance
and cash generation, working capital requirements and
expected organic and inorganic investments. To the extent
the Company has excess cash, it will consider returning such
cash to shareholders. The Board will consider from time to
time the appropriate mechanism for returning surplus cash
to shareholders.
Dividend
As indicated in the Scheme Document published on 25 April 2024
in relation to the offer for the Company by Keysight, the Board
intends and expects to declare a dividend of 2.5 pence per share,
payable prior to the Effective Date (as defined in the Scheme
Document). Payment of this dividend is not conditional upon
the Effective Date occurring.
In addition, if the Effective Date has not occurred by 30 June
2025, the Board will be entitled to declare and approve the
payment of a further dividend of up to 1.0 pence per share.
If declared, this additional dividend will be payable at any
time thereafter and before the Effective Date.
Paula Bell
Chief Financial & Operations Officer
4 March 2025
Financial review continued
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Principal risks and uncertainties
Like all businesses, Spirent is exposed to a number of risks and
uncertainties. These risks may arise from internal factors, but
some will be a result of external factors over which the Group
has little or no direct control. It is the effective management of
these risks that supports Spirent in delivering on its strategic
objectives, safeguards the Group’s assets and, over time, will
enhance shareholder value.
The process to identify and manage the principal risks and
uncertainties of the Group is an integral component of the
internal control system.
The risk assessment process starts in the businesses, where
risk registers are maintained as part of the normal operating
and control procedures, and is facilitated by the Head of
Risk & Internal Audit. Each business identifies its key risks and
mitigating factors and nominates a risk owner. The impact
and the likelihood of occurrence of each risk is ranked, which
assists the Group Executive Committee in assessing the likely
impact in aggregate of each risk to the Group as a whole. We
also conduct horizon‑scanning to maintain a medium and
longer‑term view of potential disruptors or emerging risks to
our business. The individual businesses are required to update
their risk registers regularly to reflect new or emerging risks
as they are identified to keep them up to date. These new or
emerging risks are monitored and assessed as part of the risk
assessment process and are escalated to the Group Executive
Committee for further review as required.
The approach includes a process to identify, clarify and
communicate emerging risks for Board discussion and
assessment, along with agreed mitigating action plans.
It is not possible to identify every risk that could affect the
business and the actions described below to mitigate those
risks cannot provide absolute assurance that the risk will
not occur or adversely affect the operating or financial
performance of the Group.
The Board has classified the principal risks by the impact the
risk would be expected to have on the Group should it occur,
and the anticipated likelihood that risk may occur, using the
following classifications:
Risk Impact
Impact High
Medium
Low
Likelihood of occurrence Likely
Possible
Unlikely
The Board takes the view that a high‑impact risk could lead
to a 10 per cent or more reduction in revenue, a medium‑
impact risk a 5 to 10 per cent reduction in revenue and a low‑
impact risk a reduction of up to 5 per cent in revenue.
The Audit Committee reviews and monitors the Group’s risk
processes and reports to the Board on their effectiveness.
Risk is considered by the Audit Committee at least twice
each year, at which time the risk registers are reviewed.
The Audit Committee challenges and debates the risks with
reference to risk tolerance and appetite, as set by the Board.
Progress made and any further actions to be taken regarding
mitigation plans, as well as any changes to the risk profile,
are discussed.
The Board has identified the following principal risks, each of
which is discussed on pages 57 to 60:
Risk Impact Likelihood Change
A. Macroeconomic change High Likely No change
B. Technology change High Likely No change
C. Business continuity High Likely No change
D. Customer dependence/
customer investment plans
High Likely No change
E. Competition Medium Possible No change
F. Employee skill base Medium Possible No change
Identifying and assessing risk
Risk
assessment
Review
Governance
Board and Audit
Committee
Identify, assess
and mitigate
Business units,
functional leads
and Group
Executive Committee
Current topical risks, uncertainties and
emerging risks
Topical risks and uncertainties along with emerging risks
are covered in detail in the table of principal risks and
uncertainties, but some of the more pertinent ones are
described below.
Macroeconomic uncertainty
Spirent is a global business exposed to current world
economic conditions over which it has no control. Global
market economic conditions have been impacting some
of our customers, particularly our telecommunications
customers, resulting in delays to their investment decisions.
Keysight acquisition
We saw hesitancy after the announcement of the transaction
as our customers and partners absorbed the news of the
acquisition. We are currently working with regulators to obtain
the required regulatory approvals for the transaction and
Keysight announced in December 2024 that they have offered
to divest of our High‑Speed Ethernet business in an effort to
secure the required regulatory approvals. As the scenario
that there is no acquisition by Keysight is considered unlikely
a principal risk has not been identified.
Wars in Ukraine and the Middle East
The organisation has negligible activities within Ukraine,
Russia and the Middle East and, therefore, these wars
are expected to continue to have an immaterial direct
financial impact on the Group unless they escalate and
broaden further.
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Spirent Communications plc Annual Report 2024
Principal risks and uncertainties continued
Current topical risks, uncertainties and
emerging risks continued
US/China trade and sanctions
The geopolitical landscape is turbulent with continuing US/
China trade challenges and the recent introduction of tariffs
by both US and China. While the impact of these tariffs
remains under constant review, the tariffs introduced to date
by US and China are deemed to not materially impact the
organisation. We also saw revenue decline in Asia Pacific in
2024, which was principally as a result of macroeconomic
factors in China.
We have navigated regulatory changes throughout the
year and continue to work closely with our customers and
regulators. We make sales across a broad range of customers
in China. Changes to existing US regulations to embargoed
customers may impact our ability to supply affected
customers in both the short and medium term. A conflict
between Taiwan and the Chinese military could lead to a
global recession and have an impact on the global supply of
Taiwan’s microchips which the organisation is currently heavily
reliant upon. We maintain a watching brief as legislative
requirements and these geopolitical tensions continue
to evolve.
Task Force on Climate-related Financial Disclosures (TCFD)
We have undertaken TCFD‑aligned scenario analyses, which
involved senior management, to assess our exposure to
climate‑related physical and transition risks. This workstream
is overseen by an Executive Director‑led Management Committee
that has been established to consider ESG matters including
climate‑related risks (including emerging risks) and opportunities,
with updates reported regularly to the Audit Committee and
the Board. More details can be found on pages 32 to 37.
From a transitional risk perspective, it is expected that there
will likely be a shift quickly towards renewables and away
from fossil fuels, resulting in increased carbon taxes across
all regions in the short and medium term. This may result in
associated increased costs; however, we do not estimate the
impact to be material to Spirent.
From a physical risk perspective, the potential of extreme
weather events has been considered and could cause some
disruption to our operations or those of our key suppliers.
Spirent has mitigation plans for each of these physical risks
identified, including appropriate insurance coverage, and
these plans have been developed as part of longstanding
business continuity and disaster recovery plans.
Responding to climate change also offer opportunities for
businesses and, as part of the scenario process, a number
of opportunities have been identified:
• Reduction in costs and increased efficiency, especially in
relation to office estate and automation in labs.
• Improved resilience from physical and transitionary risks.
• Additional testing opportunities to support the
development of new technologies to mitigate and
adapt to a changing climate.
• Expanding demand for test solutions that help reduce
customer emissions, including lab automation and efficiency.
See pages 32 to 37 for further detail of our approach to
environmental sustainability and climate change.
Supply chain
Supply chain issues have been experienced by organisations
around the world in 2024, due to the residual effects of
COVID‑19, the ongoing war in Ukraine, macroeconomic
issues, war in the Middle East, climate change, natural
disaster events, and a number of other localised factors that
are expected to continue at a lower scale in the medium term.
However, there has been no material impact on our ability to
deliver goods and services to customers. In 2024 the impact
due to component shortages and long lead times have eased
substantially, while supply chain cost increases in materials
and logistical costs have increased primarily due to the
macroeconomic conditions in 2024. In 2024 there has been a
reduction in inventory from the prior year.
We continue to monitor any effect from these disruptions on
the sourcing of components and the effect that this may have
on our ability to manufacture hardware and deliver products
to our customers on a timely basis.
Risk appetite and developing the long-term
Viability Statement
The UK Corporate Governance Code requires the Board to
explain how it has assessed the prospects of the Group and
state whether it has a reasonable expectation that the Group
can continue to operate and meet its liabilities, taking into
account its current position and principal risks.
The Board has determined that a three‑year period should
be used when assessing viability, as explained on page 112
of this Annual Report.
The Board has sought to frame its risk appetite in terms of
the markets and technologies in which it is prepared to make
significant investments, and those in which it would expect its
scale of investment to be more modest. Except where very
attractive opportunities were to present themselves to achieve
greater scale in well understood markets, which would
be inherently cash generative, the Board would expect to
maintain a net cash position.
Management, together with members of the Board,
considered which of the principal risks, either alone or
in combination, might threaten the Group’s viability. The
expected aggregate impact of the principal risks was
modelled based on historical trends experienced across
the Group. A severe but plausible combination of those risks
was considered for the purposes of determining the revenue
and free cash flow scenarios that should be stress tested via
financial modelling.
As noted on page 8, on the 28 March 2024, the Boards
of Keysight and Spirent announced that they had reached
agreement on the terms of a recommended cash offer for
the entire issued ordinary share capital of Spirent.
As a consequence of the above ongoing transaction, two
scenarios have been provided on the viability of the Group:
1. No acquisition by Keysight assumes the deal does not
complete and that there is no divestment of the HSE
business (note that due to the backstop agreement
in place, the Board does not consider this scenario
likely); and
2. Completion of the acquisition by Keysight.
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Spirent Communications plc Annual Report 2024
A – Macroeconomic change
Spirent is a global business exposed to current world
economic conditions and political and trade embargo
uncertainties over which it has no control. We saw good
growth in EMEA and some recovery in North America in
the second half of 2024 offset by a decline in Asia Pacific,
which was principally as a result of macroeconomic
factors in China.
We have navigated regulatory changes throughout the
year and continue to work closely with our customers.
Trade compliance issues continue to remain a focus,
particularly with China.
The business is also exposed to government spending
priorities, principally in the United States.
The residual effects of the COVID‑19 crisis, the war in
Ukraine, inflationary pressures, and a higher interest
rate environment have combined to create uncertainty
to current world economic conditions and government
spending priorities. The Group continues to monitor
the impact to the global economy and possibility of a
prolonged recession in the organisation’s key markets.
Potential impact
Deterioration in economic conditions and a change to the
terms of conventional international trade and embargoing
of specific customers may lead to a reduction in the level
of demand for Spirent’s products and services and cause
customers to delay their purchasing decisions.
Mitigating actions
The Group closely monitors both market and geographic trends
in order to respond to changes in demand and be in a position
to take timely actions to protect profitability where possible.
In addition, Spirent has a large number of geographically
diverse customers, which may mitigate the impact of issues
in any one area.
Under the unlikely scenario that there is no acquisition by
Keysight, a number of scenarios that encompass the principal
risks and uncertainties were modelled over the three‑year
period, using the Group’s strategic three‑year plan as a
basis, and are set out in the table below. The analysis also
included a reverse stress test scenario to illustrate the revenue
reduction in the 12 months following approval of the financial
statements that would lead to the Group ceasing to be a
going concern.
Scenario Principal risks
1. Revenue reduction in year 2,
no growth in year 3
B, E
2. Revenue reduction in year 1,
no growth in years 2 or 3
B, E
3. Major trade embargo A, D
4. Major supplier disruption C
5. Reverse stress test n/a
The impacts arising from the principal risk relating to
employee skill base was not modelled as they arise as a result
of specific events or transactions, the financial effects are less
extreme than other risks or they would be expected to take
longer to materialise.
The analysis included assumptions in relation to the ability of
the Group to take realistic and successful mitigating actions
to avoid or reduce the impact or occurrence of the underlying
risks, including the ability to make significant reductions in
its operating costs. In doing so an appropriate and realistic
adjustment was made for the cost of taking those actions.
In performing the Viability Statement modelling the Board
took into consideration the Group’s healthy cash balance of
$141.8 million at 31 December 2024 and the ability of the
Group to continue to generate positive free cash flow over
the three‑year period even in stressed scenarios, as has
historically been the case.
The Board reviewed and discussed with management:
• the process undertaken by management to decide which
scenarios to stress test;
• the results of the stress testing performed, including
an illustration of the reduction in revenue and cash
generation and consequently the availability of cash to
fund operations; and
• the ability of management to successfully take the
mitigating actions identified.
Based on the results of this analysis, the Directors have
a reasonable expectation that the Group will be able to
continue in operation and meet its liabilities as they fall due
over the three‑year period. The Viability Statement is set out
in the Directors’ Report on page 112.
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Spirent Communications plc Annual Report 2024
Principal risks and uncertainties continued
C – Business continuity
Operational risks are present in the Group’s businesses,
including the risk of failed internal and external
processes and systems, human error, and external
events, such as a natural disaster, climate change, a
global pandemic or cybersecurity attacks. For example,
a significant portion of our operations are located in
California which has in the past experienced natural
disasters, including earthquakes and wildfires that could
potentially disrupt our operations there. The January
2025 Los Angeles wildfires did not reach our Calabasas
facility and, therefore, our operations there were not
materially impacted.
Our TCFD‑related analysis has considered the potential
of increasing intensity and frequency of storms and
concentrated rainfall events, and frequency of wildfires,
and we have assessed that these risks would possibly
cause some disruption to operations. The understanding
of climate change‑related risks is incorporated into the
risk management framework.
The Group has therefore taken steps to manage the
increase to business continuity risk, including invoking
business continuity plans in each location, closely
monitoring the impact to the supply chain with additional
inventory procured on key components and by adding
alternate suppliers, making last time buys as necessary,
re‑engineering products as required, and by boosting the
global Spirent information technology systems to enable
the workforce to work remotely.
Contract manufacturers manufacture a substantial
amount of Spirent’s products and have experienced a
reduction in orders from Spirent, cost increases, end of
life notices and some elevated lead time challenges,
leading to a limited number of component shortages but
primarily increased costs during 2024. Spirent’s major
contract manufacturer is located in Thailand, with others
in US and UK.
The incidence of cybercrime continues to rise. Spirent is
dependent on its information technology systems for both
internal and external communications, maintaining our
reputation as well as for day‑to‑day operations.
Potential impact
A significant natural disaster or global pandemic could disrupt
the Group’s ability to conduct business and adversely impact
revenue and operating results.
Higher peak and average temperatures could lead to
increased capital expenditure to expand or upgrade cooling
equipment across multiple Spirent sites.
The shift towards renewables and away from fossil fuels
may result in associated increased costs. Starting in the short
term, energy costs are likely to continue to increase due to
higher investment requirements in low carbon technology
and expected additional carbon‑related levies. We also
expect additional administrative burden on the business,
likely increasing the costs for resource to deliver and report.
We do not estimate the impact to be material to Spirent.
B – Technology change
Spirent sells complex solutions in industries that can be
subject to rapid and somewhat cyclical technological
changes. Testing new technologies drives our business,
but the opportunity also brings high risk since keeping at
the forefront of these key future technologies is critical to
our success and to ensuring that we remain competitive
in our markets.
It is critical that our product development investment is
directed at the right areas in order to deliver the solutions
that our customers need when they need them.
Spirent’s success is dependent in part on proprietary
technology which may be infringed by others.
Open‑source tools remain prevalent in providing some
of the functionality of our products.
Potential impact
If product development investment does not keep pace with
the speed of change in technologies, or if it is not directed
at the right key areas, our competitive position and financial
performance will suffer.
If Spirent’s solutions take longer to develop than anticipated or
longer to develop than our competitors, then our competitive
position and financial performance will also suffer.
Changes in technologies and increasing scrutiny on
compliance, security and privacy may lead to a short‑term
pause by our customers investing in our solutions.
Intellectual property claims can result in significant defence
costs and may affect Spirent’s ability to market its products.
Customers may choose to use open‑source tools instead of
some Spirent products to meet part of their testing needs.
Mitigating actions
All Spirent’s businesses work very closely with customers
and remain focused on their requirements.
Each business makes investment decisions specifically related
to its solutions portfolio based on market needs.
Spirent continues to focus its investment into areas that
offer the most potential for sustainable earnings growth.
In 2024 the product development investment was
$99.0 million (2023 $102.4 million).
Spirent has active intellectual property protection
programmes in place to obtain appropriate protection
in a cost‑effective manner.
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Spirent Communications plc Annual Report 2024
In the medium to long term, our TCFD climate‑related
analysis has highlighted the risks of site damage to building
and infrastructure, lost time and productivity and any
associated increased cost of insurance. Additionally, a major
supplier disruption event is a possible key risk, causing an
outage for a period of time which we assess as causing
possible delays to customer shipments and the timing of
revenue recognition. Disruption, financial problems of contract
manufacturers or limitations in their manufacturing capacity
could limit supply and/or increase cost.
Failed internal and external processes, systems or human
error could lead to compliance issues.
If a cyberattack were to be successful it could result in loss
of data, reputation and confidential information as well as
damage to Spirent’s intellectual property, causing major
disruption to the business. Any security vulnerabilities in our
products could also adversely impact our customers. There
would also be a potential impact on Spirent’s credibility in
the security market.
Mitigating actions
An important component of Spirent’s corporate governance is
its risk management strategy. IT disaster recovery plans are in
place for all core business systems and ensure that the wider
operations are all fully covered. In 2024, we performed the
annual refresh and test of the Group Business Continuity and
Disaster Recovery Policy and Procedure.
Spirent has mitigation plans for each of the TCFD physical
risks identified, that have been developed as part of
longstanding business continuity and disaster recovery
plans. Spirent engineering centres are situated across the
globe, allowing flexibility and agility should one site become
affected. Where possible we have second source component
supply to assist with the mitigation of interruptions in supply
and regular meetings are held with contract manufacturers.
In addition, the Group’s largest manufacturing subcontractor
has multiple worldwide sites and comprehensive business
continuity plans.
The Group has appropriate business interruption insurance
in place.
We are working closely with our contract manufacturers
and are in frequent direct consultation with key component
suppliers worldwide to mitigate the impact of any supply
chain challenges. The situation is dynamic and we will take
appropriate action to mitigate the supply chain risk including
the careful management of planning and fulfilment.
During 2024, we continued with a programme of work to
enhance technical controls, processes and procedures in the
area of cybersecurity. Third party providers are used in both
the testing and monitoring of our security profile.
D – Customer dependence/customer
investment plan
The Group sells its products and services to a wide
range of companies and continually seeks to expand its
customer base. In 2024, no one customer accounted for
more than 10 per cent of Group revenue, although the
top ten customers represented 34.1 per cent of Group
revenue (2023 34.4 per cent).
In some of our markets certain customers have a
dominant market share, which makes doing business with
these customers and their suppliers critical to the success
of our business.
In addition, many of the companies with which
we do business are some of the largest global
telecommunications corporations. Therefore, meeting
our development obligations, producing high‑quality
products and being on time are vital to Spirent’s
reputation and success.
Changes in our major customers’ priorities in technology
investments can also have a significant impact on
their spending on Spirent products and on those in the
customers’ supply chain.
The industry continues to experience consolidation which
does disrupt the spending patterns of affected customers.
As a result of the current macroeconomic uncertainty,
customer spending patterns remain uncertain, particularly
in our telecommunications markets. The Group is taking
steps to evolve its go‑to‑market strategy in order to
strengthen relationships with customers and diversify
its customer base.
Potential impact
Loss of one or more of Spirent’s major customers could have
a significant impact on Spirent’s financial results.
Spend on Spirent’s products is often capital in nature and so
customer spend can fluctuate significantly from year‑to‑year.
Significant failings in either quality or being able to deliver in
the appropriate timescale could cause long‑lasting damage
to Spirent’s reputation and relationships.
Over recent years there has been significant consolidation in
our customer base amongst service providers and network
equipment manufacturers. This trend continues and often
results in delays in spending, thereby reducing demand for
Spirent’s solutions and services. It also reduces the potential
number of customers to which those solutions and services
could be sold.
Changes in our customers’ technology investments can
result in reduced spending on our existing solutions before
customers and those in the customers’ supply chains increase
spending on new technologies.
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Spirent Communications plc Annual Report 2024
F – Employee skill base
Employees are crucial to the success of our business.
Attracting and retaining highly qualified and skilled
employees is essential to enable the Group to deliver
on its strategy and to the success of the business. Due to
the ongoing Keysight sale process challenges are being
experienced with retention in some areas of the business
and additional steps have been taken to mitigate this risk.
Potential impact
Competition for personnel is faced from other companies and
organisations and the loss of key employees, the failure to
attract and retain other highly skilled employees, or the failure
to adequately plan for succession may impair Spirent’s ability
to run and expand the business effectively.
Mitigating actions
Investing in people is at the core of the Group’s strategy.
The aim is to find, keep and engage the highest calibre
of employees and encourage their contribution and
development. An environment that fosters innovation and
collaboration is critical to Spirent’s success, as is ensuring
incentive plans are competitive.
We have refined our employee value proposition and
continue to make Spirent a more inclusive, diverse and
engaging place to work to attract and retain talent.
Succession planning for senior posts in the Company is
reviewed periodically by the Board.
Appropriate career paths, professional development plans,
and internal recognition programmes are developed for both
technical and non‑technical staff.
Regular reviews are performed to ensure equitable pay
practices and that all elements of compensation across
the Group are competitive with the market.
Principal risks and uncertainties continued
E – Competition
Spirent operates in a range of highly competitive niche
markets which experience rapid technological change.
In order to compete effectively, it is necessary to establish
and maintain technological differentiation in our solutions.
The Group faces competition from new market start‑ups as
well as more established and well‑resourced companies.
Industry consolidation amongst our direct competitors
may bring about a shift in competitive advantage.
Potential impact
Actions by competitors and increased competition can bring
about pressure on Spirent’s gross margin. These factors could
also affect Spirent’s competitive position, thereby reducing
revenue and consequently affecting financial results.
Consolidation continues within our sector, including the
ongoing sale process of the organisation to Keysight. The
consolidation of competitors may bring opportunities for
Spirent but can also change the competitive landscape as
competitors are able to leverage product capabilities or
sales channels.
Mitigating actions
Strong customer relationships are critical to Spirent. We aim
to provide innovative solutions which address our customers’
larger business problems with products and services and
we place great emphasis on providing professional service
and support.
One of the Group’s strategic objectives is to invest in
deepening our customer relationships and our key account
management initiatives assist to ensure robust relationships
with our largest customers. We place engineers on site with
our customers and undertake site surveys of intended plans
for the use of test solutions in their business.
We seek to establish thought leadership in our industry
through participation in standards bodies and industry
forums, which in turn creates additional links with customers.
Our approach is to play a key part in the wider supply chain
to our key service provider customers by aligning with early
adopters of technology.
We also seek to broaden our customer base to mitigate
customer concentration risk, investing in digital marketing,
inside sales, field sales and our partner ecosystem to expand
the number of new customers that we win.
D – Customer dependence/customer
investment plan continued
Mitigating actions
The Group’s broad solution portfolio, market‑leading
capabilities and customer focus continue to address this risk.
Spirent aims to maintain market‑leading positions through
significant investment in the development of differentiated
products. We also seek opportunities for attractive inorganic
investments that can strengthen our competitive advantage.
Competitor activity is closely monitored with a view to
maintaining clear differentiation based on Spirent’s products,
services, and global reach.
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Non-financial and sustainability information statement
This section of the Strategic Report constitutes the Non‑Financial and Sustainability Information Statement
of Spirent Communications plc, produced to comply with Sections 414(C)(A) and 414(C)(B) of the
Companies Act 2006. The information listed in the table below is incorporated by cross‑reference.
Reporting requirement
Policies and standards which
govern our approach Additional information and risk management
Environmental matters Group Environment Policy
Group Sustainability Policy
Supplier Code of Conduct
Stakeholder Engagement (pages 24 to 27)
Sustainability (pages 32 to 39)
Task Force on Climate‑related Financial Disclosures
including CFD (pages 35 to 37)
Sustainability Report at corporate.spirent.com
Employees Business Ethics Policy
Whistleblowing Policy
Occupational Safety Policy
Diversity and Inclusion Policy
Stakeholder Engagement (pages 24 to 27)
Sustainability (pages 32 to 39)
Sustainability Report at corporate.spirent.com
Audit Committee Report (pages 77 to 82)
Nomination Committee Report (pages 74 to 76)
Report on Directors’ Remuneration (pages 83 to 108)
Social matters Group Environment Policy
Group Sustainability Policy
Diversity and Inclusion Policy
Supplier Code of Conduct
Stakeholder Engagement (pages 24 to 27)
Sustainability (pages 32 to 39)
Sustainability Report at corporate.spirent.com
Nomination Committee Report (pages 74 to 76)
Directors’ Report (pages 109 to 112)
Respect for human rights Modern Slavery Statement
Diversity and Inclusion Policy
Stakeholder Engagement (pages 24 to 27)
Sustainability (pages 32 to 39)
Sustainability Report at corporate.spirent.com
Nomination Committee Report (pages 74 to 76)
Anti‑corruption and bribery Business Ethics Policy
Group‑wide Dealing Policy
Supplier Code of Conduct
Sustainability (pages 32 to 39)
Directors’ Statement on Corporate Governance
(pages 67 to 73)
Audit Committee Report (pages 77 to 82)
Directors’ Report (pages 109 to 112)
Description of the business model Our Business Model (pages 16 to 17)
Description of principal risks and
impact of business activity
Our Business Model (pages 16 to 17)
Principal Risks and Uncertainties (pages 55 to 60)
Task Force on Climate‑related Financial Disclosures
(pages 35 to 37)
Non‑financial key
performance indicators
Strategic Report (pages 1 to 61)
Key Performance Indicators (pages 22 to 23)
The policies mentioned above form part of Spirent Communications plc’s Group policies, which act as the link between our
strategy, purpose and values and how we manage our day‑to‑day business. The Board has determined that the policies
remain appropriate, are consistent with the Company’s values and support its long‑term sustainable success.
Approval
Pages 1 to 61 form part of the Strategic Report, which has been reviewed and approved by the Board.
Angus Iveson
Company Secretary
4 March 2025
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Chairman’s introduction to governance
Sir Bill Thomas
Chairman
Dear shareholder
On behalf of the Board, I am pleased to present the
Governance Report for the year ended 31 December 2024.
This review and the reports of the Nomination, Audit and
Remuneration Committees that follow summarise the
Board’s activities during the year. Even before the Keysight
offer in March 2024, the Board was committed to high
standards of corporate governance, with decisions being
made based on what the Board believes will most benefit
stakeholders by promoting and maintaining the long-term
success of the Company and its reputation. All of this has
been critical in the context of the ongoing Keysight offer, to
ensure the correct oversight and decision making process.
Compliance with the 2018 UK Corporate
Governance Code (the “2018 Code”)
Our approach to governance is based on the concept
that good corporate governance enhances longer-term
shareholder value and sets the culture, ethics and values
for the Group. Consistent with our belief in the importance
of corporate governance, I am pleased to report that,
throughout the year under review, the Company has been in
full compliance with the principles and provisions of the 2018
Code, except as regards two areas, both given the ongoing
Keysight offer, as follows: (i) not conducting an external
Board evaluation; and (ii) extension of the tenure of the Audit
Committee Chair, beyond the normal nine years. A copy of
the 2018 Code can be found at www.frc.gov.uk. The Board
notes the introduction of a new UK Corporate Governance
Code in January 2024, effective from 2025, and intends to
adopt the provisions of this Code where it is able to do so.
Board composition and succession planning
During the year under review, due to the ongoing Keysight
offer, the Nomination Committee put on hold succession
planning for Executive and Non-executive Directors and
the progressive refreshing of the Board. Further information
about the Nomination Committee’s work can be found in
the Nomination Committee Report.
Diversity
As at the financial year end, the Board comprised
five male and three female Directors, meaning that just
under 40 per cent of our Board is now female, with two
Board members from ethnic minority backgrounds. The
under-representation of women at all levels of Spirent and
throughout the technology sector is a key challenge and
there remains significant work to do in this area.
Evaluating the Board’s effectiveness
Each year, the Board undertakes a formal evaluation of
its effectiveness. This year, due to the ongoing Keysight offer,
we again carried out an internally facilitated evaluation
to assist in the development of the Board, rather than an
external evaluation which is normally required every three
years and was last undertaken in 2021. The results of the
Board evaluation confirmed that the Board continues
to function effectively and that there are no significant
concerns among the Directors about its effectiveness. The
Board members were seen as engaged and committed
while the Board’s culture remains open, respectful
and constructive.
People and culture
Our business is built on the commitment, abilities and drive
of our people. In the year, both the Board and management
have continued to review results of our biannual employee
engagement programme and are pleased to see we have
a highly engaged workforce. Further details may be found
in the Stakeholder Engagement section.
Re-election of Directors
In accordance with the 2018 Code provisions and following
a performance evaluation of those Directors standing
for re-election at the 2025 Annual General Meeting,
I can confirm that they all continue to be effective and
committed to their roles and have sufficient time available
to perform their duties. Accordingly, as recommended by
the Nomination Committee, all Directors will be offering
themselves for re-election at the Company’s Annual
General Meeting to be held in June 2025.
Annual General Meeting (AGM)
The AGM of the Company will take place in London in
June 2025. Full details will be set out in the AGM Notice.
We expect the majority of the Board to attend in person,
so as to provide an opportunity for shareholders to ask
questions. I look forward to meeting any shareholders who
can join us at our AGM and extend my thanks to you all for
your continued support as we move through 2025.
Sir Bill Thomas
Chairman
4 March 2025
CORPORATE GOVERNANCE
62
Spirent Communications plc Annual Report 2024
CORPORATE GOVERNANCE
Compliance with the UK Corporate Governance Code
As a premium listed company on the London Stock
Exchange, the Company is reporting in accordance
with the UK Corporate Governance Code (the “Code”)
published in July 2018. The Code sets out standards
of good practice in relation to Board leadership and
Company purpose; division of responsibilities; composition,
succession and evaluation; audit, risk and internal control;
and remuneration. The Code is published by the UK
Financial Reporting Council (FRC), a copy of which is
available from the FRC website. The Board confirms that
the Company is fully compliant with the Code, except as
regards two areas, both given the ongoing Keysight offer,
as follows: (i) not conducting an external Board evaluation;
and (ii) extension of the tenure of the Audit Committee
Chair, beyond the normal nine years.
Board leadership and Company purpose
The Board’s ultimate objective is the long-term sustainable
success of the Company. Read more about our strategy
in our Strategic Report and how the Board achieves this
through, amongst other things, stakeholder and workforce
engagement (set out in the Stakeholder Engagement section),
establishing a clear and aligned Company purpose, strategy
and values (see Investment Case) and how the Board
assesses and monitors culture (see Our People and Culture).
Division of responsibilities
The Board consists of two Executive Directors,
five independent Non-executive Directors and the
Non-executive Chairman, who was considered
independent on appointment to the Board.
Additional external appointments of Board members
routinely require prior Board approval. Directors’ other
time commitments are in line with the key institutional
investor and investor body guidelines.
Composition, succession and evaluation
The Nomination Committee Report describes its activities
during 2024, including information on succession planning
and diversity and inclusion matters. Details of the Board’s
effectiveness review which took place during the period
and of Board composition are set out in the Directors’
Statement on Corporate Governance.
Audit, risk and internal control
The Audit Committee Report describes the work of
the Committee and how it discharges its roles and
responsibilities. The Board, supported by the Audit
Committee and its Risk Sub-Committee, completed
a robust assessment of the Company’s emerging and
principal risks during the period under review and
has well-established procedures to manage risk. The
Company’s disclosures regarding principal risks are set
out in the Principal Risks and Uncertainties section.
Remuneration
The Report on Directors’ Remuneration describes the work
of the Remuneration Committee during 2024, and sets out
how executive remuneration is aligned with the Company’s
purpose, values and strategy and how workforce
remuneration and related policies have been considered
in its decision making regarding executive remuneration.
Board composition
Tenure
3–5 years 2
6–9 years 5
9+ years 1
Ethnicity
Director of colour 2
White 6
Male 5
Female 3
Gender
63
Spirent Communications plc Annual Report 2024
Board of Directors
Appointed
Sir Bill was appointed to the
Board in December 2016
as Non-executive Director
and appointed Chairman
in May 2017.
Skills and experience
Sir Bill brings strong commercial
and management experience
to the Board. His extensive
international technology
experience, together with his
track record in leading major
change in large organisations,
provides valuable insight.
Sir Bill stepped down as a
Non-executive Director of
The Co-operative Bank in
October 2023 and was also
previously Senior Vice President
at Hewlett Packard and on the
executive committee of EDS
plc as Executive Vice President.
Until March 2022, Sir Bill was
Chairman of Clarkson PLC.
Other roles
Non-executive Director of
Node4, a private equity-owned
IT services firm.
Sir Bill was awarded a
knighthood in the New Year
Honours 2020.
Appointed
Eric was appointed to the
Board in May 2019 as Chief
Executive Officer.
Skills and experience
Most recently, Eric was on the
executive management team of
Amdocs reporting directly to the
CEO. In his capacity as Group
President, Services at Amdocs
Ltd he had global responsibility
for the entire managed services,
testing and SI businesses. This
business encompassed 10,000
employees and roughly $2
billion in revenue. Prior to that
role, Eric was Division President
for North America at Amdocs
where he managed a $1 billion
P&L and was responsible for the
relationship with North American
communications service
providers. Prior to his time at
Amdocs, he held executive roles
at Nokia Siemens Networks and
AT&T. Eric has a great track
record of success, has functional
expertise in every facet of the
business and has excelled in
multi-cultural global companies.
Eric has an MBA in Finance
and a Bachelor’s degree in
Electrical Engineering from
Cornell University.
Other roles
Since 2019, Non-executive
Director of Symend, Inc.
Appointed
Paula was appointed to the
Board in September 2016 as
Chief Financial Officer.
Skills and experience
Paula has extensive FTSE 100
and 250 PLC main board
experience both as an Executive
and Non-Executive Director,
and in particular working with
large-scale global technology,
engineering and industrial
businesses. Paula was previously
CFO at John Menzies Plc from
2013, a £2 billion revenue
business with 35,000 employees,
and CFO at Ricardo Plc from
2006 to 2013.
Paula has also held senior
leadership roles at BAA plc,
AWG plc and Rolls-Royce
Plc, with extensive breadth of
responsibility, including leading
business development, strategy,
significant M&A activity and
leading organisational change.
Paula is a Fellow of the Chartered
Institute of Management
Accountants and a Chartered
Global Management Accountant.
Other roles
Appointed as a Non-executive
Director at Keller Group plc in
September 2018, then Chair of
the Audit and Risk Committee
in January 2019. Appointed as
a Non-executive Director at
Persimmon Plc in September
2024, then Chair of the Audit and
Risk Committee in October 2024.
Paula was also previously with
Laird Plc from 2012 to 2018 as
Non-executive Director, Senior
Independent Director and Chair
of the Audit Committee.
Appointed
Jonathan was appointed
to the Board in June 2015
as Non-executive Director,
appointed Chair of the Audit
Committee in August 2015, and
appointed Senior Non-executive
Director in November 2016.
Skills and experience
Jonathan brings experience in
finance, risk, control, governance
and international business
expertise. He was Chief Financial
Officer at Laird plc until 2015,
having held a variety of roles in
his 30 years with the company.
Jonathan is a member of
the Chartered Accountants
of Scotland.
Other roles
Non-executive Director of Baillie
Gifford China Growth Trust plc;
Non-executive Director and
Chairman of Audit Committee
at Henderson High Income Trust
PLC; formerly Non-executive
Director and Chairman of Audit
Committee of East and North
Hertfordshire NHS Trust.
Sir Bill Thomas
Chairman
Eric Updyke
Chief Executive Officer
Paula Bell
Chief Financial &
Operations Officer
Jonathan Silver
Senior Independent
Non-executive Director
A
Audit Committee
N
Nomination Committee
R
Remuneration Committee
Committee Chairman
Committee key
A N RN
CORPORATE GOVERNANCE
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Spirent Communications plc Annual Report 2024
Appointed
Maggie was appointed
Non-executive Director
in April 2021.
Skills and experience
Prior to this role, Maggie was
SVP and Chief Business Officer
at SAP Customer Success
Services and before that,
General Manager and Global
Head of Innovation Services
and Solutions at SAP. She has
significant experience building
fast-growth digital businesses
and previously led Digital Sales,
Markets and Industries globally
at Capgemini and Global Cloud
Sales and Consulting for Fujitsu.
Maggie serves on the
International Committee of the
UK Chartered Management
Institute and also served on the
Board of Green Token by SAP,
winning the “Women in the City”
technology category award.
She is on the next-generation
committee at Leap, a charity that
helps young people manage
conflict. She advises scale-ups
in the sustainability, customer
experience and enterprise
AI segments.
Maggie holds both a Master
of Letters and a BBS Lang in
Business and French from Trinity
College, Dublin. She also holds
a degree from the Grande École
de Commerce de Rouen, France.
Other roles
Maggie is a technology industry
executive, adviser and speaker,
a Director of Sitecore and
formerly Chief Operating Officer
at Normative.
Appointed
Edgar was appointed to
the Board in January 2018
as Non-executive Director.
Skills and experience
Edgar brings to the Board
wide-ranging experience of
managing companies across
the technology sector with a
focus on driving investment and
profitability. Edgar is currently
CEO of Liqid, Inc, a leader in
the design and development of
GPU clustering solutions. Prior to
this, Edgar was Chief Executive
Officer of the Accton Group, a
global leader in the design and
manufacturing of networking
products. Prior to this, Edgar was
President and Chief Executive
Officer of Qualtre, Inc., a
US-based start-up acquired
by Panasonic Corporation
in December 2016. Prior to
this, Edgar was President and
CEO of 3Com Corporation, a
leading global data networking
company, bringing the company
to record revenue and gross
margins before it was taken into
private ownership.
Edgar holds a Diplôme
d’Ingénieur from École Centrale
de Paris, a Master of Science
degree in Electrical Engineering
from the University of California
at Berkeley, and a Master of
Business Administration with
distinction (Arjay Miller Scholar)
from Stanford University.
Other roles
Venture Partner at Sway
Ventures; Chairman of the
Board of Kollective Technology,
Inc, Board member at Ecrio, Inc.
Appointed
Gary was appointed to the
Board in December 2016
as Non-executive Director
and appointed Chair of
Remuneration Committee
in May 2017.
Skills and experience
Gary brings extensive experience
in senior management positions,
including sales and marketing
roles, at IBM and BT Group
plc and was a Non-executive
Director of Chloride Group plc.
Until 2012 he was President at
Logica UK and a member of
the Executive Committee of
Logica plc.
Other roles
Non-executive Chairman
of Gooch & Housego PLC;
Non-executive Chair of AFC
Energy PLC.
Appointed
Wendy was appointed to
the Board in January 2018
as Non-executive Director.
Skills and experience
Wendy is a seasoned leader in
the IT industry with 27 years of
experience driving growth in the
APAC region. She has a strong
background in partnership
strategy, relationship building,
go-to-market planning, and
sales and business development.
In her role as Vice President
Pathways, Alliance & Strategy
APAC at NetApp, Wendy led
APAC business partnerships
and drove business value by
helping partners generate
opportunities in the hybrid cloud
and supporting customers on
their digital transformation
journeys. At Juniper Networks,
Wendy served as Senior Vice
President Global GTM Strategy
and Business Development,
where she was responsible
for leading transformational
strategy and establishing
partnerships to increase the
value proposition for customers.
With a strong track record of
developing competitive and
high-performing businesses,
Wendy is an expert in driving
growth and delivering
outstanding service.
Wendy holds a Bachelor of
Engineering in Electrical and
Electronics from Nanyang
Technological University
and a Graduate Diploma
in Marketing Management
from the Singapore Institute
of Management.
Other roles
Executive Vice President/
Managing Director South East
Asia at Capgemini.
Maggie Buggie
Independent
Non-executive Director
Edgar Masri
Independent
Non-executive Director
Gary Bullard
Independent
Non-executive Director
Wendy Koh
Independent
Non-executive Director
A N R A N R A N R A N R
CORPORATE GOVERNANCE
65
Spirent Communications plc Annual Report 2024
Board statements
Board statements
Requirement Compliance statement
Where to find
further information
Strategic Report The Strategic Report was approved by the Board of Directors on 4 March 2025. Pages 1 to 61
NFSR statement The Company has complied with the Non-Financial Reporting Directive
contained in Sections 414CA and 414CB of the Companies Act 2006.
Page 61
Section 172 of the
Companies Act 2006
The Board of Directors, through the Strategic Report, provides information
for shareholders to help them assess how the Directors have performed
their duty, under Section 172, to promote the success of the Company and,
in doing so, had regard to the matters set out in that section. This includes
considering the interests of other stakeholders which will have an impact
on the long-term success of the Company.
Pages 24 to 27
Compliance with
the UK Corporate
Governance Code
In accordance with the Listing Rules of the UK Listing Authority, the Company
confirms that throughout the reporting period and at the date of this Annual
Report, it was in full compliance with all relevant provisions of the 2018 UK
Corporate Governance Code, except as regards two areas, both given the
ongoing Keysight offer, as follows: (i) not conducting an external Board
evaluation; and (ii) extension of the tenure of the Audit Committee Chair,
beyond the normal nine years.
Pages 62 to 113
Going concern After making appropriate enquiries and taking into account the matters set
out in this Annual Report, the Directors have a reasonable expectation that
the Group has adequate resources to continue in operational existence for
the foreseeable future and therefore continue to adopt the going concern
basis when preparing the financial statements.
Page 111
Viability Statement The Directors confirm that they have a reasonable expectation that the
Group will continue in operation and meet its liabilities as they fall due
over the three-year period under review.
Page 112
Robust assessment
of the principal and
emerging risks facing
the Group
The Directors confirm that they have carried out a robust assessment of the
principal and emerging risks facing the Group, including those that would
threaten its strategy, business model and future performance. The Directors
also assessed the Group’s risk appetite with regard to each risk and
considered how to manage and mitigate such risks.
Pages 55 to 60
Annual review of
the systems of risk
management and
internal control
During the period ended 31 December 2024, the Audit Committee
provided transparency on the Group’s systems of risk management and
internal control.
Pages 77 to 82
“Fair, balanced
and understandable”
statement
The Board agrees with the recommendation of the Audit Committee that
this Annual Report, taken as a whole, is fair, balanced and understandable.
Page 77
Report on Directors’
Remuneration
The Directors confirm that their report on remuneration for the period
ended 31 December 2024 complies with the requirements of the Listing
Rules of the UK Financial Conduct Authority, Schedule 8 of the Large and
Medium-sized Companies and Groups (Accounts and Reports) Regulations
2013 (as amended) and the provisions of the 2018 UK Corporate
Governance Code.
Pages 83 to 108
Competition and
Markets Authority
The Audit Committee considers that the Company complied with the
mandatory audit processes and Audit Committee responsibility provisions
of the Competition and Markets Authority Audit Order for the period
ended 31 December 2024.
Page 81
Modern Slavery Act
2015
The Directors confirm, for the financial year ended 31 December 2024, that
steps have been taken in relation to our responsibilities under Section 54
of the Modern Slavery Act 2015 and that the Board approved a statement
setting out the steps that have been taken to combat modern slavery in the
Group’s supply chain.
Page 39
Task Force on
Climate-related
Financial Disclosures
(TCFD)
The Directors confirm that the Company has complied with the
recommendations of the Task Force on Climate-related Financial
Disclosures as required by Listing Rules of the UK Financial
Conduct Authority.
Pages 35 to 37
CORPORATE GOVERNANCE
66
Spirent Communications plc Annual Report 2024
Directors’ statement on corporate governance
The Board
The Board of Directors is collectively responsible to the
Company’s shareholders for the direction and oversight
of the Company to ensure its long-term success.
The Board met regularly throughout the year to approve
the Group’s strategic objectives, to lead the Group within
a framework of effective controls which enable risk to
be assessed and managed, and to ensure that sufficient
resources are available to meet the objectives set.
There are a number of matters which are specifically
reserved for the Board’s approval. These are set out in a
clearly defined schedule which includes: matters relating to
the Group’s strategic plan; approving the annual business
strategy and objectives; the nature and extent of principal risks
to be taken to achieve the strategic objectives; changes relating
to structure and capital; approval of trading statements, half year
results, final results and Annual Report and Accounts; declaring
interim dividends and recommending final dividends; the
Group’s policies and systems of internal control and risk
management; approving capital projects, acquisitions and
disposals, within agreed financial parameters; and provision
of adequate succession planning.
The schedule of matters reserved for the Board is typically
reviewed annually.
Board composition
At the date of this Report, the Board comprises the
Non-executive Chairman, five independent Non-executive
Directors and two Executive Directors.
The Chairman and the Non-executive Directors contribute
entrepreneurial leadership and external expertise and
experience in areas of importance to the Company, such
as strategic investments, including specific knowledge,
understanding and experience of growth areas, corporate
finance, general finance and corporate governance. They also
contribute independent challenge and rigour to the Board’s
deliberations and assist in the development of the Company’s
strategy, scrutiny of the performance of management in
meeting agreed goals and targets and satisfying themselves
of the integrity of the Company’s internal controls and risk
management systems.
The Chairman holds regular discussions with the
Non-executive Directors, both individually and as a group,
without the Executive Directors present to ensure a free and
frank exchange of views on the effectiveness of the Executive
Directors and senior management.
Committees of the Board
Certain specific responsibilities are delegated to the Committees of
the Board, notably the Audit, Nomination and Remuneration
Committees, which operate within clearly defined terms of
reference and report regularly to the Board. Further details are set
out in the reports of each Committee that follow this statement.
A Disclosure Committee of the Board is also in place, to
ensure that adequate procedures, systems and controls
are maintained and operated to enable the Company to
fully comply with its obligations regarding the timely and
accurate identification and disclosure of all information to
meet the legal and regulatory obligations and requirements
arising from the Companies Act 2006, the FCA’s Listing Rules,
the Disclosure Guidance and Transparency Rules and the
EU Market Abuse Regulation, as it forms part of retained
EU law. The Board notes, however, that the existence of a
Disclosure Committee does not absolve it from its obligations
in this area. This Committee comprises the CEO, the CFO
and the Company Secretary, with the Chairman and the
Senior Independent Non-executive Director authorised to
act as alternates in the event that a quorum of two members
cannot be met. By its nature, the Disclosure Committee meets
on an ad hoc basis, when circumstances require.
Membership of each Committee of the Board is typically
reviewed annually, with minutes of Committee meetings
made available to all Directors on a timely basis. The written
terms of reference for the Audit, Disclosure, Nomination and
Remuneration Committees, all of which were reviewed,
updated where necessary and approved during the year, are
available on the Company’s website at corporate.spirent.com.
The Chairs of the Audit, Nomination and Remuneration
Committees intend to be available at the Annual General
Meeting to answer questions on the work of their
respective Committees.
Board governance framework
Audit
Committee
Executive
Directors
Disclosure
Committee
Nomination
Committee
Remuneration
Committee
Spirent Communications plc Board
Risk
Sub-Committee
ESG
Management
Committee
CORPORATE GOVERNANCE
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Spirent Communications plc Annual Report 2024
Directors’ statement on corporate governance continued
Committees of the Board continued
An Executive Director-led Management Committee has been
established to lead and monitor ESG matters and co-ordinate
the reporting of issues and updates to the Board. Further
information on the issues dealt with by this Committee are
set out in the Sustainability section of this Annual Report.
There is also a formal Risk Sub-Committee of the Audit
Committee to monitor risks and uncertainties at corporate
and business unit levels. Further details of this Sub-Committee
can be found in the Audit Committee Report.
Chairman and CEO
The roles of the Chairman and the CEO are separately held.
The division of their responsibilities is clearly established, set
out in writing, and agreed by the Board to ensure that no one
person has unfettered powers of decision. The Chairman is
responsible for the operation and leadership of the Board,
ensuring its effectiveness and setting its agenda. The CEO is
responsible for leading and managing the Group’s business
within a set of authorities delegated by the Board and the
implementation of Board strategy and policy.
Authority for the operational management of the Group’s
business has been delegated to the CEO for execution or
further delegation by him for the effective day-to-day running
and management of the Group.
Senior Independent Director
The role of Senior Independent Director is to act as
a sounding board for the Chairman and to serve as an
intermediary for other Directors as required. He is also
available to shareholders to convey concerns to the Board
which they have been unable to convey through the Chairman
or through the Executive Directors. During the year, led by
the Senior Independent Director, the Non-executive Directors
have met without the presence of the Chairman (including to
appraise the Chairman’s performance).
Non-executive Directors
In addition to their responsibilities for strategy and business
results, the Non-executive Directors play a key role in providing
a solid foundation for good corporate governance and
ensure that no individual or group dominates the Board’s
decision making. They each occupy, or have occupied, senior
positions in industry, bringing valuable external perspective
to the Board’s deliberations through their experience and
insight from other sectors which enables them to contribute
significantly to Board decision making. The formal letters of
appointment of the Non-executive Directors are available for
inspection at the Company’s registered office.
Company Secretary
The Company Secretary & General Counsel is responsible
for advising and supporting the Chairman and the Board
on corporate governance matters as well as ensuring that
there is a smooth flow of information to enable effective
decision making. All Directors have access to the advice and
services of the Company Secretary and can take independent
professional advice in respect of their duties, at the
Company’s expense.
Independence
The independence of each Non-executive Director is
reviewed on appointment and at least annually. The Board
determined that the current Non-executive Directors are
each independent in character and judgement, save for the
Chairman, who was deemed independent by the Board at
the date of his appointment, and Jonathan Silver, the Audit
Committee Chair, who’s tenure has now been extended
beyond the normal nine years, due to the ongoing Keysight
offer. None of the Directors have been employed by the
Company previously in any capacity or have any current
material business relationship with any Group company.
Non-executive Directors at Spirent receive no remuneration
from the Company other than their fees (detailed in the Report
on Directors’ Remuneration). Each Non-executive Director
has confirmed that they do not represent any significant
shareholder in the Company. No individual or group of
individuals dominates the Board’s decision making and
the Code requirement stating that at least half of the Board
(excluding the Chairman) should comprise independent
Non-executive Directors is satisfied.
Appointments to the Board
There is a formal, rigorous and transparent procedure for
the appointment of new Directors to the Board. Details are
available in the Nomination Committee Report, which also
provides details of the Committee’s role and activities.
Commitment
The letters of appointment for the Chairman and Non-executive
Directors set out the expected time commitment required
of them and are available for inspection at the Company’s
registered office and at the Annual General Meeting.
The Board is mindful of investors’ concerns on “overboarding”
and the particular attention given to the time commitment
and availability of Directors. The external commitments
of each Director are monitored to enable the Board to be
assured that all of the Directors devote sufficient time and
attention as is necessary in order to perform their duties.
The list of external appointments held by Directors can be
found in the Board of Directors section.
CORPORATE GOVERNANCE
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Spirent Communications plc Annual Report 2024
Board development
New Directors participate in an induction programme on the operations and activities of the Group, the role of the Board
and the matters reserved for its decision, the Group’s corporate governance practices and procedures and their duties,
responsibilities and obligations as directors of a listed public limited company. This programme is normally then supplemented
by visits to key locations and meetings with, and presentations by, senior executives.
Ongoing training for Directors is available as required and can be provided by means of external courses, internal
computer-based training, briefings from specific consultants or in-house presentations. In addition, the Board’s knowledge
and understanding of the legal and regulatory environment are updated through the provision of information by the Group’s
advisers and by means of regular updates from the Company Secretary.
New Directors are encouraged to take advantage of opportunities to meet with major shareholders and attend presentations
to analysts where possible.
Further details of the appointment and induction process are set out in the Nomination Committee Report.
Board meetings
The Board meets at regular intervals during the year, as well as for ad hoc matters, as required from time to time. Discussion
papers for Board and Committee meetings are provided to Directors in advance of each meeting. Should a Director be unable
to participate in a meeting either in person or remotely, the Chairman will, where appropriate, solicit their views in advance of
the relevant meeting, so that these can be shared at the meeting.
The attendance of the Directors at scheduled Board and Committee meetings during the year under review is shown in the table
below, which shows those meetings scheduled at the start of the year, where there was full attendance, although due to the
Keysight offer there were a number of additional ad hoc meetings scheduled, often at short notice.
Board
Audit
Committee
Nomination
Committee
Remuneration
Committee
Sir Bill Thomas 8/8 — 1/1 —
Paula Bell 8/8 — — —
Eric Updyke 8/8 — — —
Maggie Buggie 8/8 3/3 1/1 3/3
Gary Bullard 8/8 3/3 1/1 3/3
Wendy Koh 8/8 3/3 1/1 3/3
Edgar Masri 8/8 3/3 1/1 3/3
Jonathan Silver 8/8 3/3 1/1 3/3
Information flow
The Company Secretary manages the provision of information to the Board at appropriate times in consultation with the
Chairman and CEO. In addition to formal meetings, the Chairman and CEO maintain regular contact with all Directors. The
Chairman also holds informal meetings with Non-executive Directors, without any of the executives being present, to discuss
any issues affecting the Group, if this is thought necessary. Regular management updates are sent to Directors to keep the
Non-executive Directors informed of events and developments throughout the Group between Board meetings and to ensure
that they are kept fully advised of the latest issues affecting the Group.
Conflicts of interest procedures
The Company has procedures in place, which were reviewed and updated during the year, to deal with the situation where
a Director has a conflict of interest.
As part of this process, the Board:
• considers each potential conflict situation separately on its particular facts;
• considers the potential conflict situation in conjunction with the rest of the Directors’ duties under the Companies Act 2006;
• keeps records and Board minutes as to authorisations granted by Directors and the scope of any approvals given; and
• regularly reviews conflict authorisation.
At the start of each Board meeting, the Directors are reminded of their duties under the Companies Act to declare any interests
in the matters to be discussed and to withdraw from the meeting prior to any voting being held on any such issue. Any Director
having such an interest would not be considered to form part of the quorum for discussions on that specific matter.
CORPORATE GOVERNANCE
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Spirent Communications plc Annual Report 2024
Directors’ statement on corporate governance continued
Board activities during the year
At each Board meeting the CEO presents an update on performance, strategy and business issues such as M&A pipeline
developments across the Group and the CFO presents a detailed analysis of the financial performance of the business units.
Both the CEO and CFO updates may also include sections on key stakeholders, including employees, customers, suppliers,
investors, or others, as necessary. Senior executives below Board level attend relevant parts of Board meetings in order to
make presentations on their areas of responsibility; this gives the Board access to a broader group of executives and helps
the Directors make ongoing assessments of the Group’s succession plans.
Until the Keysight offer, the Board had a rolling programme of visits to business unit locations in order to deepen appreciation
of the different opportunities and challenges faced. The ongoing Keysight offer has also been a regular item at each Board
meeting during 2024, with external advisers presenting.
Key issues considered by the Board during 2024
Governance/compliance Finance Business/strategy
January
• CFO update
• Full year trading update review
• CEO update
March
• Full year compliance and Annual Report
review plus Modern Slavery
Statement review
• AGM Notice and Proxy Card approval
• Legal update
• CFO update
• Full year results review
• Dividend Policy review
• Budget/Capital Policy review
• Receive Audit Committee Report on
internal controls, risk management
and Viability Statement
• CEO update including sales
and customers
Late April
• Q1 Trading update review
May AGM
• AGM voting review • CFO update • CEO update
June
• CFO update • CEO update
• People update
• Strategy presentations
August
• H1 corporate governance
and compliance review
• Legal update
• Group insurance renewal
• CFO update
• Half year update
• CEO update
October
• CFO update • CEO update
November
• Director conflicts • CFO update
• Q3 results review
• CEO update
December
• Board matters reserved and
Committee TORs, Board and
Committee effectiveness results,
NED fees
• CFO update
• Preliminary budget review
• CEO update
The Keysight offer has required the Board and its Committees to prioritise the various additional activities involved, in order
to ensure delivery, on top of BAU, such activities having so far included:
• holding additional Board and Committee meetings up to March 2024, to review the initial Viavi and subsequent Keysight
offers, so as to agree key terms, as well as agreeing the terms of the Co-operation Agreement;
• convening the relevant Court and shareholder approval meetings, for May 2024 in respect of Viavi and May 2024 for
Keysight; and
• from May 2024 onwards, supporting the various ongoing project workstreams, including the regulatory reviews in the UK,
the USA and China, as well as facilitation of the carve-out process, working closely with the external advisers to help ensure
delivery of the proposed divestment by Keysight on completion of the acquisition.
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Board performance review
The effectiveness of the Board and its Committees is reviewed
at least annually and conducted according to the principles
of the Code and the supporting FRC Guidance on Board
Effectiveness. This year, due to the ongoing Keysight offer, we
again carried out an internally facilitated evaluation to assist
in the development of the Board, rather than an external
evaluation which is normally required every three years and
was last undertaken in 2021. As previously, this internal review
was conducted by the Chairman and Company Secretary.
Evaluation process
Following discussions between the Chairman and Company
Secretary, last year’s questionnaire, including previous
responses, was circulated for the Board and its Audit,
Nomination and Remuneration Committees. Directors
reviewed this online, with discussion at the Board.
Evaluation findings
The review concluded that, whilst there could be
improvements to the composition of the Board and
additional training provided, in the context of the ongoing
Keysight transaction and with the necessary focus of the
Board on driving this to completion, this was considered a
low priority. There continued, however, to be an appropriate
understanding of strategy and success factors, as well as
strengths, weaknesses, challenges and threats, with the
Company’s values, as defined to employees, continuing to
be fully aligned to strategy.
Board action plan
The Board’s primary focus in 2024 has been delivering
to shareholders the agreed value from the offer made by
Keysight which was approved by shareholders in May 2024.
That will continue to be the primary focus in 2025.
Election and re-election of Directors
All Non-executive Directors undertake a fixed term of three
years subject to annual re-election by shareholders. The fixed
term can be extended and, consistent with best practice,
would not normally go beyond nine years unless exceptional
circumstances were deemed to exist, such as the ongoing
Keysight offer in the case of the current Audit Committee Chair.
The Board confirms that each of the Directors standing
for re-election has been subject to a formal performance
evaluation by the Chairman in relation to their duty to
act in the long-term interests of the Company, while also
having regard to other stakeholders. The evaluation of the
Chairman’s performance was carried out by the Senior
Independent Non-executive Director.
Biographical details, including information on other roles
held, can be found in the Board of Directors section; an
assessment of skills held by Board members can be found
in the Nomination Committee Report.
Financial and business reporting
The Board recognises its responsibility to present a fair,
balanced and understandable assessment of Spirent in all
of its reporting obligations. This responsibility covers the
Annual Report and extends to the Half Year Report and
other regulatory announcements. The Directors consider this
Annual Report, taken as a whole, to be fair, balanced and
understandable, providing the information necessary for
shareholders to assess the Company’s performance, business
model and strategy. In arriving at this position, the Board
asked the Audit Committee to review and confirm a process
is in place to support this assessment. The Audit Committee
confirmed that a robust approach is in place to support the
fair, balanced and understandable assessment, details of
which can be found in the Audit Committee Report.
Business model
A description of the Company’s business model for sustainable
growth is set out in “Our Business Model”. This section provides
an explanation of the basis on which the Group generates
value and preserves it over the long term and its strategy for
delivering its objectives.
Going concern
After making enquiries, the Directors have a reasonable
expectation that the Company and the Group have adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, and consistent with the guidance contained
in the document titled “Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting” published
by the FRC, they continue to adopt the going concern basis in
preparing the annual financial statements.
Internal control and risk management
The Board acknowledges its responsibilities for the
Group’s system of internal control in order to facilitate the
identification, assessment and management of risk, the
protection of shareholders’ investments and the Group’s
assets. The Directors recognise that they are responsible for
providing a return to shareholders which is consistent with
the responsible assessment and mitigation of risks.
Effective controls ensure that the Group’s exposure to
avoidable risk is minimised, that adequate accounting records
are maintained, that the financial information used within
the business is reliable and that the consolidated accounts
preparation and financial reporting processes comply with all
relevant regulatory reporting requirements. The dynamics of
the Group and the environment within which it operates are
continually evolving, together with its exposure to risk.
Internal controls can only provide reasonable and not
absolute assurance against material misstatement or loss.
The Directors confirm that there is an ongoing, robust process
for identifying, evaluating and managing the principal risks
faced by the Group and the operational effectiveness of the
related controls; this has been in place for the year under
review and up to the date of approval of the Annual Report
and Accounts. They also confirm that they have regularly
reviewed the system of risk management and internal
controls utilising the review process set out below.
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Directors’ statement on corporate governance continued
Internal control and risk management continued
The Directors confirm that a robust assessment of the
principal and emerging risks facing the Company has been
carried out, including those risks that would threaten its
business model, future performance, solvency or liquidity.
Ongoing consideration is also given to potential emerging
risks and whether or not any of those identified have the
potential to become a principal risk to the business in the
medium to long term. More details are set out in the Principal
Risks and Uncertainties section.
Management and control of US subsidiary
Spirent Federal Systems Inc (“Spirent Federal”), which
contributed approximately $53.2 million to the Group’s
revenue in 2024 (2023 $45.7 million), operates under a Proxy
agreement, as detailed below, with the remainder of the US
business operating outside the Proxy regime and therefore
allowing the same reporting lines and processes as the
Group’s other, non-regulated businesses.
Spirent Federal and the Proxy arrangement
Spirent Federal Systems Inc is a wholly owned subsidiary of
Spirent in the United States. It has been placed under a Proxy
arrangement as it is required by the US National Industrial
Security Program to maintain facility security clearances
and to be mitigated of the risks of foreign ownership, control
or influence for the business it undertakes. Under the Proxy
agreement, Spirent Federal and the US Department of
Defense (DoD) are parties to a Proxy agreement that relates
to the management and operation of Spirent Federal.
In addition to their powers as Directors, the United
States government expects the Proxy holders to exercise
independently the prerogatives of share ownership of Spirent
Federal. The Proxy holders have a fiduciary duty, and agree,
to perform their interests in the best interests of Spirent as a
shareholder (including the legitimate economic interest), and
in a manner consistent with the national security interests of
the United States. Spirent may not remove the Proxy holders
other than for acts of gross negligence or wilful misconduct or
for breach of the Proxy agreement (and always only with the
consent of the US Defense Security Service).
In terms of the power to govern, the Proxy agreement
vests certain powers solely with the Proxy holders and
certain powers solely with Spirent. For example, the Proxy
holders cannot carry out any of the below without Spirent’s
express approval:
• sell or dispose of, in any manner, capital assets or the
business of Spirent Federal;
• pledge, mortgage or encumber assets of Spirent Federal
for purposes other than obtaining working capital or funds
for capital improvements;
• merge, consolidate, reorganise or dissolve Spirent
Federal; and
• file or make any petition under the federal bankruptcy laws
or similar law or statute of any state or any foreign country.
Spirent can require the above to be carried out and these are,
therefore, considered to be significant participative features.
Spirent maintains its involvement in Spirent Federal’s activities
through normal business interaction and liaison with the Chair
of the Proxy Board. Members of Spirent’s senior management
team attend meetings of the Proxy Board periodically.
Standards
Guidelines on the minimum Group-wide requirements for
health and safety and environmental standards are set
out in policy documents and procedures. There are also
guidelines on the minimum level of internal control that each
of the business units should exercise over specified processes.
Each business has developed and documented policies and
procedures to comply with the minimum control standards
established, including procedures for monitoring compliance
and taking corrective action.
High-level controls
All businesses prepare annual operating plans and budgets
which are supplemented by regular forecasts throughout
the year. Performance against budget is monitored both at
operational level and centrally, with variances being reported
promptly. The cash position at Group and operational level is
monitored constantly and variances from expected levels are
investigated thoroughly. Clearly defined guidelines have been
established for capital expenditure and investment decisions.
These include the preparation of budgets, appraisal and
review procedures, and delegated authority levels.
Financial reporting
Detailed management accounts are prepared every month,
being consolidated in a single system and reviewed by senior
management and the Board. They include a comprehensive
set of financial reports and key performance indicators
covering commercial and operational issues. Performance
against budgets and forecasts is discussed regularly at
Board meetings and at meetings between operational and
Group management. The adequacy and suitability of key
performance indicators is reviewed regularly.
Internal audit
All of the internal audit activities are co-ordinated by the
Head of Internal Audit & Risk who has direct access to the
Board Chairman and to the Audit Committee Chairman and
is accountable to the Audit Committee.
All Group businesses are required to comply with the Group’s
financial control framework that sets out minimum control
standards. A key function of the Group’s internal audit
resource is to undertake audits to ensure compliance with the
financial control framework and make recommendations for
improvement in controls where appropriate.
Senior members of the Group finance team meet with the
Chairman of the Audit Committee as appropriate but at least
annually, without the presence of executive management,
and have direct access to the Chairman.
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Spirent Communications plc Annual Report 2024
Remuneration
The Report on Directors’ Remuneration provides details of
our Remuneration Policy and how it has been implemented,
together with the activities of the Remuneration Committee.
Board relations with shareholders
The Board is committed to maintaining good communications
with shareholders. Until the Keysight offer, the Chairman, CEO
and CFO had regular one-to-one contact with individual
institutional shareholders in order to develop an understanding
of their views, which were then discussed with the Board. Not
surprisingly, the Keysight offer has been the main topic raised
by investors during 2024.
All Directors were offered the opportunity to develop a
dialogue with major shareholders to listen to their views, with
presentations made to analysts, investors and prospective
investors covering the full year and half year results. Executive
Directors receive regular reports prepared by an independent
capital markets advisory firm which provides comprehensive
information relating to the Company’s major shareholders.
The Company also maintains a dialogue with the various
bodies which monitor the Company’s governance policies
and procedures.
The Company is always keen to hear the views of its private
shareholders and we encourage them to access our website
at corporate.spirent.com for our Company reports and
business information. Detailed enquiries can be sent to our
shareholder mailbox at investor.relations@spirent.com.
Any concerns raised by shareholders or their representatives,
whether expressed directly or through voting patterns at
the Company’s AGM, are discussed by the Directors. An
appropriate response is given either specifically to the
concerned party or, if it is felt to be of wider benefit, made
available to all shareholders via the Company’s website
at corporate.spirent.com.
Board relations with workforce
Employee feedback during the year was gathered in
a number of ways including two employee engagement
surveys and virtual town hall meetings for all employees
and/or smaller sub-groups. During 2024, due to the Keysight
offer and in order to answer employee questions and address
concerns, additional town hall meetings and/or CEO
messaging videos were initiated.
The Board has appointed local Non-executive Directors
designated as the liaison point for employees in the three
geographical areas in which the Company operates:
• Americas – Edgar Masri;
• APAC – Wendy Koh; and
• EMEA – Gary Bullard.
Whilst meetings typically take place either in person or on
a virtual basis, with feedback being reported to the Board
at its regular meetings, in light of the additional townhall
meetings in relation to Keysight, the usual meetings did not
take place in 2024, although the mechanism remains in place.
Annual General Meeting (AGM)
The Board continues to view the AGM as a valuable
opportunity to communicate with private shareholders in
particular, for whom it provides the opportunity to ask questions
of the Chairman and, through him, the Chairs of the key
Committees and other Directors. The 2025 AGM is planned to
take place as an in-person meeting, although notifications of
any alternative arrangements that arise after the publication of
this Annual Report will be published on the Company’s website
at corporate.spirent.com/shareholder-information/agm and
by announcement via a Regulatory Information Service.
To ensure transparent representation of shareholder views,
resolutions are normally subject to poll voting. This gives
shareholders the ability to vote directly on the resolutions
either in person at the meeting, or by submitting their Proxy
instructions to the Company’s Registrar, in advance of
the meeting.
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Spirent Communications plc Annual Report 2024
Nomination Committee report
Sir Bill Thomas
Committee Chairman
Key duties
The terms of reference of the Nomination Committee
are typically reviewed annually and are available on the
Company’s website at corporate.spirent.com.
In accordance with its terms of reference, the Nomination
Committee’s key duties include:
• regularly reviewing the Board structure, size and
composition (including the skills, knowledge, independence,
experience and diversity) and making recommendations
to the Board about suitable candidates for the role of
Senior Independent Director, and membership of the Audit
and Remuneration Committees, in consultation with the
Chairmen of the relevant Committees;
• considering plans for orderly succession on the Board and
in the Company’s senior leadership with a view to ensuring
the continued ability of the organisation to compete in the
marketplace; and
• leading the search process and making recommendations
to the Board for the appointment of new Directors.
Board composition and succession
As part of the annual Board and Committee effectiveness
review, the Committee concluded that there was no significant
skills gap in the composition of the Board and it was well
equipped for its role of implementing the strategy of the
Company, in order to successfully deliver for stakeholders.
Given the ongoing Keysight offer process, which is hoped to
conclude during 2025, all previous Board and Committee
recruitment and succession plans have been placed on hold,
including the previously announced recruitment for a new
Audit Committee Chair. Accordingly, Jonathan Silver has
agreed to remain in place until the conclusion of the Keysight
offer process and will offer himself for re-election at the
upcoming AGM.
Time commitment
The Committee is mindful of investors’ concerns on
“overboarding” and the particular attention given to the
time commitment and availability of Directors. The external
commitments of each Director are monitored to enable the
Board to be assured that all of the Directors devote sufficient
time and attention as is necessary in order to perform their
duties. The Director biographies in the Board of Directors
section include a list of external appointments and also set
out skills and experience.
Performance review
The performance of the Committee was reviewed as part of
the annual Board effectiveness evaluation and the Committee
was found to be operating effectively.
Members
During the year under review and as at the date of this
Annual Report, the Nomination Committee comprised
as follows:
Sir Bill Thomas (Chairman)
Maggie Buggie
Gary Bullard
Wendy Koh
Edgar Masri
Jonathan Silver
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Spirent’s commitment to
a diverse and inclusive
work environment
At Spirent, we know that having a diverse and
inclusive workforce is essential if we are going to
deliver on our mission to be global leader and
trusted partner for innovative technology test and
assurance solutions. We know how critical diverse
and inclusive teams are to fuel our innovation and
genuinely connect with the communities in which
we live and work. We embrace a culture where
difference is valued and openness, mutual respect,
collaboration and fairness are fundamental.
Spirent does not tolerate discrimination or offensive
behaviour of any kind. We are committed to creating
workplaces that genuinely reflect the diversity of
the world we serve and provide an environment
where everyone feels empowered to bring their full,
authentic self to work.
We strive to enable:
• workforce representation that reflects the
talent market;
• equitable reward and advancement; and
• a culture of trust, fairness and respect.
Spirent’s commitment to
diversity in talent acquisition
The talent pools we recruit from determine our
diversity and we have made a concerted effort to
reach a wider audience when we recruit. We have
developed and maintain a network of university
partners and recruitment channels to help us
to both recruit from groups that are currently
under-represented, especially female engineers
and people of colour, and support students to
reach their full potential.
Re-election of Directors
All Non-executive Directors undertake a fixed term of three
years subject to annual re-election by shareholders. The fixed
term can be extended and, consistent with best practice,
would not normally go beyond nine years unless exceptional
circumstances were deemed to exist, such as in the case of the
current Audit Committee Chair, as referenced earlier, due to
the ongoing Keysight offer.
The Committee reviews the results of the annual Board
effectiveness evaluation that specifically relate to the
composition of the Board, and whether the time commitment
of those who fulfil the roles of Chairman, Senior Independent
Director and Non-executive Director was appropriate.
The Board confirms that each of the Directors standing for
re-election has been subject to a formal performance evaluation
by the Chairman in relation to their duty to act in the long-term
interests of the Company, while also having regard to other
stakeholders. The evaluation of the Chairman’s performance was
carried out by the Senior Independent Non-executive Director.
Succession planning for senior leadership
A key part of the Committee’s role is to maintain an ongoing
assessment of the senior leadership depth, whilst improving
the effectiveness of the internal talent pipeline continues to
be one of the Board’s top priorities.
In view of the ongoing Keysight offer, a formal leadership
development and internal succession pipeline review was not
undertaken during the year. However, the Board continued
to receive presentations from certain members of the
senior leadership team during the year and held frequent
discussions with CEO about the capabilities of the senior
leadership team. The Committee will continue to support
management, as necessary, in recognising that understanding
and deploying the Group’s talent is a critical and dynamic
business planning process that can help the organisation to
make huge strides in cross-functional collaboration and the
sharing of knowledge and experience.
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Spirent Communications plc Annual Report 2024
Nomination Committee report continued
Diversity and inclusion
The Committee, the Board of Directors and the Spirent
Group as a whole continue to pay full regard to the
benefits of diversity, including gender and ethnic
diversity, when searching for candidates for the Board,
its Committees (Remuneration, Audit and Nomination)
the senior management team and other appointments.
We believe that better business decisions can be made
by having representation from different genders and
cultural backgrounds with differing skill sets, experience
and knowledge, which reflect our customer base and the
wider population in our markets.
Diversity of Board members is important to provide the
necessary range of background experience, values and
diversity of thinking and perspectives to optimise the decision
making process. Gender and ethnicity are important aspects
of diversity which the Chairman and the Committee consider
when deciding upon the most appropriate composition of
the Board.
Spirent as a whole recognises the benefits of diversity
beyond that of gender, taking account of diversity of social
and ethnic backgrounds and cognitive and personal strengths
when considering appointments at all levels, whilst ensuring
appointments are made on merit and ability to enhance the
performance of the business.
At the year end, the Group’s performance against the diversity
targets set out under the FCA Listing Rules 9.8.6(9) and 14.3.33
is as set out below. All diversity data is collected in line with
the Department for Business and Trade’s (DBT) FTSE 350
Companies: Ethnic Diversity Voluntary Census.
Gender identity
Number
of Board
members
Percentage
of the Board
Number
of senior
positions
on the
Board
1
Number
in executive
management
2
Percentage
of executive
management
2
Men 5 62.5 3 4 66.6
Women 3 37.5 1 2 33.3
Not specified/prefer not to say — — — — —
Ethnic background
Number
of Board
members
Percentage
of the Board
Number
of senior
positions
on the
Board
1
Number
in executive
management
2
Percentage
of executive
management
2
White British or other White (including
minority White groups) 6 75.0 4 5 83.3
Mixed/multiple ethnic groups — — — — —
Asian/Asian British 1 12.5 — — —
Black/African/Caribbean/Black British — — — — —
Other ethnic group, including Arab 1 12.5 — 1 16.6
Not specified/prefer not to say — — — — —
Notes
1. Chairman, CEO, CFO and SID.
2. Excludes CEO, includes CFO and direct reports to the CEO only (excluding executive assistant and Chief of Staff).
The Committee notes that the Company has achieved each of the targets set out in the relevant Listing Rules with the exception
of the Board comprising at least 40 per cent women. Two of the four most recent appointments to the Board have been women,
and the Committee is committed to requiring a diverse candidate list for all future Board appointments in order to continue to
improve against this target, should further appointments be needed.
Sir Bill Thomas
Chair, Nomination Committee
4 March 2025
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Spirent Communications plc Annual Report 2024
Audit Committee report
Dear shareholder
On behalf of the Audit Committee, I am pleased to present
its report for the period ended 31 December 2024 and to
recommend to the Board that the Annual Report, taken as
a whole, is fair, balanced and understandable. In making
this recommendation, and in addition to the external audit
review, the Committee has applied robust governance
measures, with additional governance overlay in respect
of the Keysight offer.
Due to the ongoing Keysight offer, all Board succession and
recruitment plans have now been put on hold and, whilst
I was originally expected to step down from the Board in
2024, my tenure as both a Director and the Audit Committee
Chair have necessarily been extended beyond the normal
nine years, as I have agreed to continue my role until
completion of the Keysight offer. I will therefore be offering
myself for re-election at the forthcoming AGM, noting
that I will not necessarily be considered as independent
under the Code.
The Committee has also considered the disclosures relating
to the FRC minimum standard for Audit Committees and
acknowledges the most recent update of the Code that will
be applicable for future years, however, given the Keysight
offer, does not consider these to be an issue.
I look forward to meeting with shareholders at the AGM
to answer any questions on the work of the Committee.
Jonathan Silver
Chair, Audit Committee
4 March 2025
Jonathan Silver
Committee Chairman
Fair, balanced and
understandable
In making its recommendation to the Board that the
Annual Report, taken as a whole, is fair, balanced
and understandable, the Committee applied robust
governance arrangements, including:
• setting clear guidance and instruction of the
disclosure requirement provided to contributors;
• comprehensive Group and subsidiary accounts
processes, with written confirmations provided by
each business unit;
• management teams reporting on the health of the
financial control environment;
• a verification process applied to factual content
with the aim of providing the information
necessary to assess the Company’s performance,
business model and strategy;
• reviews of the Annual Report undertaken at
different levels of the Group and by the senior
management team that aim to ensure consistency
and overall balance;
• additional scrutiny by senior management
including focused review of risk registers;
• additional Committee reviews of the draft Annual
Report in advance of final sign-off;
• oversight of the external audit process; and
• appropriate overlay of the Keysight offer and
consideration of resourcing and process risks.
Final approval of the Annual Report is provided
by the Board, on the recommendation of
the Committee.
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Spirent Communications plc Annual Report 2024
Members
During the year and at the date of this report, Committee
members were:
Jonathan Silver (Committee Chair)
Maggie Buggie
Gary Bullard
Wendy Koh
Edgar Masri
As required, the Audit Committee is comprised of at least
three members, all of whom are independent Non-executive
Directors of the Company, with the necessary range
of financial and commercial expertise to challenge
management. Two members may constitute a quorum.
The Code also requires the inclusion of one financially
qualified member (as recognised by the Consultative
Committee of Accountancy Bodies) with recent and relevant
financial experience. Currently, the Committee Chair fulfils
this requirement.
Key duties
In accordance with its terms of reference, the Audit
Committee’s key duties include:
• monitoring the integrity of the Group’s financial statements
and any formal announcements relating to the Company’s
performance by reviewing significant financial reporting
judgements contained in them before their submission to
the Board for approval;
• reviewing and challenging on matters of financial reporting,
where necessary, the consistency of and any changes to
accounting and treasury policies, for example considering
whether the Group has followed appropriate accounting
policies and made appropriate estimates and judgements,
the clarity and completeness of disclosure, significant
adjustments resulting from the audit, and the going concern
assumption and compliance with auditing standards;
• at the request of the Board, reviewing the content of the
Annual Report and Accounts and advising the Board
on whether, taken as a whole, it is fair, balanced and
understandable and provides the information necessary
for shareholders to assess the Company’s position and
performance, business model and strategy;
• as requested by the Board, assisting in relation to the
Board’s assessment of the principal and emerging risks
facing the Company and the prospects of the Company for
the purposes of disclosures required in the Annual Report
and Accounts;
• reviewing the effectiveness of the Group’s internal financial
controls, including the policies and overall process for
assessing established systems of internal financial control
and timeliness and the effectiveness of corrective action
taken by management;
• reviewing the most appropriate fulfilment of the internal
audit function and agreeing and assessing the annual
internal audit plan and its effectiveness in the context of
the Company’s overall risk management system;
• overseeing the Group’s policies, procedures and controls for
preventing bribery and identifying money laundering, and
the Group’s arrangements for whistleblowing; and
• overseeing the relationship with the Group’s External
Auditor, reporting to the Board each year whether it
considers the audit contract should be put out to tender
taking into account any legal requirements for tendering or
rotation of the audit contract, reviewing and monitoring its
objectivity and independence including seeking information
from the External Auditor on an annual basis about its
policies and procedures for maintaining independence,
agreeing the scope of its work and fees paid to it for
audit, assessing the effectiveness of the audit process,
and agreeing the policy in relation to the provision of
non-audit services.
How the Committee operates
Committee members are expected to be financially literate
and to have an understanding of the following areas:
• the principles of, and developments in, financial reporting
including applicable accounting standards and statements
of recommended practice;
• key aspects of the Company’s operations including
corporate policies and the Group’s internal
control environment;
• matters which may influence the presentation of accounts
and key figures;
• the principles of, and developments in, company law,
sector-specific laws and other relevant corporate legislation;
• the role of internal and external auditing and risk
management; and
• the regulatory framework for the Group’s businesses.
The Committee invites the Chair, the CEO, the CFO, the
Head of Internal Audit & Risk and senior representatives of
the External Auditor to attend its meetings in full, although it
reserves the right to request any of these individuals to withdraw.
During the year, the Committee held or offered meetings with
Deloitte LLP and the Head of Internal Audit & Risk, without the
Executive Directors present.
The Committee has unrestricted access to Company
documents and information, as well as to employees of the
Company and the External Auditor.
The Committee’s effectiveness is reviewed on an annual basis
as part of the Board’s performance evaluation process and in
2024 the Committee was found to be operating effectively.
The terms of reference of the Audit Committee were reviewed
and approved during the year and can be viewed on the
Company’s website at corporate.spirent.com.
Meetings
The Audit Committee met at various times during the year,
with the Committee agenda typically linked to events in
the Group’s financial calendar, as set out in the Directors’
Statement on Corporate Governance.
Audit Committee report continued
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Activities during the year
As in prior years, the Audit Committee’s activities principally
related to financial reporting, internal control and risk
management, preparation of the Viability Statement and
scrutiny of the external audit. The Committee considered
all material controls, including financial, operational and
compliance controls, and their effectiveness and monitored
the internal audit plan as carried out by the Head of Internal
Audit & Risk. This work also typically encompasses other
related areas, such as the Group’s approach to IT controls,
site security and cybersecurity, as well as examining the
disclosures in this Annual Report based on the Task Force
on Climate-related Financial Disclosures. The Committee
was also kept abreast of new reporting and governance
requirements and preparations by management for
reporting on such.
Risk Sub-Committee
During the period under review, the Audit Committee had
oversight of a Sub-Committee dealing with the risks and
uncertainties being dealt with on a Group and business
unit level.
The Risk Sub-Committee met regularly throughout the year
to monitor the Group’s risk appetite and registers.
Financial reporting and significant issues
During the year, the Audit Committee:
• reviewed the full year and half year financial statements,
trading updates, key accounting policies and significant
financial reporting judgements contained therein (with
particular reference to the critical accounting assumptions
and judgements as set out in the notes of the consolidated
financial statements) and recommended the financial
statements to the Board for approval;
• reviewed whether the Annual Report, taken as a whole, is
fair, balanced and understandable and formed an opinion
thereon prior to recommending it to the Board;
• reviewed and monitored risk management processes and
the potential for risks to impact on the viability of the Group;
• reviewed and considered assumptions in relation to the
going concern basis for preparation of financial statements;
• reviewed, challenged and monitored the appropriateness
of alternative performance measures; and
• reviewed the External Auditor’s report on the interim review
and year end audit and management’s responses to the
issues raised.
The Committee Chair reports any significant findings or
identified weaknesses to the Board.
Significant financial issues considered and
addressed in relation to the financial statements
The Audit Committee gives careful consideration to those
aspects of the financial statements that required significant
accounting judgements or where there is estimation
uncertainty. These areas are set out in the notes to the
consolidated financial statements. For all of the significant
financial issues considered, the Committee concluded, after
appropriate review, that none had a material impact on
the financial statements. The Committee received detailed
reports from both the CFO and External Auditor on these
areas and on many other matters which they believed should
be drawn to the Committee’s attention and challenged the
treatment and assumptions where it was felt necessary to
ensure that the judgements were robust and supportable. The
External Auditor’s report on the financial statements was also
reviewed, with particular reference to those matters reported
as carrying risks of material misstatement.
Management override of controls
The Audit Committee is aware of the risk that management
overrides the control environment that is in place in order to
misrepresent performance by the business. The effectiveness
of internal controls is monitored and challenged by the
Committee both directly and through the continuing internal
audit work undertaken by the Head of Internal Audit & Risk.
The Committee is aware that International Standards on
Auditing require the External Auditor to presume risk of
fraud in respect of management override of controls and
that as part of its audit programme Deloitte considers the
higher areas of risk deriving from inappropriate posting of
journals, unintentional or intentional management bias in key
judgements used in material estimates and accounting for
transactions outside the ordinary course of business.
Revenue recognition
The Committee is mindful of the risk that continuing
pressure on management to meet certain targets and to
respond to specific customer requests may drive additional
deal complexity which could, in turn, lead to complex or
judgemental accounting, in particular due to the impact
of external factors on business sentiment. This may result
in inappropriate recognition of revenue and associated
balances. It is also aware of the heightened risk around the
high volume of orders fulfilled around the period end, which
is highlighted as an additional fraud risk as an area that could
be manipulated by management.
Management updates the Committee on significant contracts
in the year. The Committee also receives regular reports
on management’s oversight of areas where significant
judgement is exercised and challenges findings to ensure
compliance with accounting standards.
As part of its update to the Committee, Deloitte discussed
the procedures performed in relation to reviewing specific
large and judgemental transactions and revenue recognised
around the period end. Deloitte and the Committee also
discussed the procedures performed in relation to the
Group’s arrangements for sales through distributors or
with the assistance of agents.
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Adjusting items
• The Committee kept the definition and use of adjusting
items under review throughout the period, in particular
because of the potential impact upon the Group’s reported
profitability. The Committee has paid close attention to
the treatment of costs connected to these items, including
the restructuring in 2023 and Keysight offer associated
costs in 2024.
Pensions
• The Committee receives regular updates on the accounting
for the funded defined benefit pension plans. The Committee
monitors the approach and assumptions made by management
and advisers in relation to recognition of the current surplus
or deficit.
Tax accounting
• The Committee received regular updates from the VP
of Global Tax and Group Financial Controller on the
appropriateness of recognised tax provisions, recoverability
of deferred tax assets and the key tax judgements. The
Committee evaluated updates from management in
respect of uncertain tax positions, the tax provision and
the deferred tax position. The Committee was satisfied that
management’s approach to the accounting for taxation
was appropriate. The Committee also noted Deloitte’s
use of tax specialists and considered its view on the tax
accounting matters.
Goodwill impairment
• The Committee receives a report setting out the approach
and outcomes of the Group’s annual goodwill impairment
exercise which takes place each year, together with additional
reviews of the impact on the goodwill position of specific
events or changes to the assumptions made.
Misstatements
Management reported to the Committee that it was not
aware of any material or immaterial misstatements made
intentionally to achieve a particular outcome. The External
Auditor reported to the Committee misstatements it had
found in the course of its work. After due consideration the
Committee concurred with management that no adjustments
were required.
Internal control and risk management
During the year the Audit Committee:
• monitored and reviewed internal control and risk
management systems;
• reviewed and approved the internal audit programme
for the year; and
• reviewed regular reports on specialist areas, which could
include taxation, treasury operations, health and safety
and cybersecurity.
The Board is responsible for the effectiveness of the Group’s
system of internal control, which has been designed and
implemented to meet the particular requirements of the
Group and the risks to which it is exposed. Details can be
found below on the Group’s internal control environment,
how risk is managed and the Committee’s review of
the effectiveness of the risk management and internal
control systems.
Internal control environment
The primary aim of the Group’s internal controls is to operate
a system which is appropriate to the business and which
can support the Group in delivering its strategic objectives,
safeguard the Group’s assets and, over time, enhance shareholder
value. The system is designed to identify, evaluate and
manage the significant risks faced by the Group rather than
to eliminate the risk of failure to achieve business objectives
and can only provide reasonable and not absolute assurance
against material misstatement or loss. This is in accordance
with the latest Guidance on Risk Management, Internal Control
and Related Financial and Business Reporting issued by the FRC.
The CFO is responsible for internal financial control and for
ensuring that the finance department employs a level of
management and specialists appropriate for maintaining
financial records and processes that provide financial
information that is relevant and reliable, complies with
applicable laws and regulations, and is distributed both
internally and externally in a timely manner. A review of the
consolidation and financial statements is undertaken by senior
management to ensure that the financial position and results of
the Group are appropriately reflected. All financial information
published by the Group is subject to the approval of the Audit
Committee prior to it being approved by the Board.
The following key elements comprise the internal
control environment:
• an appropriate organisational structure with clear lines
of responsibility;
• an experienced and qualified finance function which
regularly assesses the possible financial impact of the
risks facing the Group;
• a comprehensive annual business planning process
and strategy review; systems of control procedures and
delegated authorities which operate within defined
guidelines, and approval limits for capital and operating
expenditure together with other key business transactions
and decisions;
• a robust financial control, budgeting and forecast system
which includes regular monitoring, variance analysis, key
performance indicator reviews and risk and opportunity
assessments at Board level;
• procedures by which the consolidated financial statements
are prepared, which are monitored and maintained
through the use of internal control frameworks addressing
key financial reporting risks arising from changes in the
business and accounting standards;
• established policies and procedures setting out expected
standards of integrity and ethical standards which reinforce
the need for all employees to adhere to all legal and
regulatory requirements;
• an annual internal controls compliance checklist; and
Audit Committee report continued
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• the Head of Internal Audit & Risk, who is supported by
a co-sourced internal audit resource. In 2017, the Group
adopted co-source arrangements and appointed PwC,
which continues to support the Head of Internal Audit & Risk
to formulate and execute the Group’s internal audit plan.
The plan for 2024 was approved to ensure that there was
appropriate coverage of the internal control environment,
strategic priorities and key risks identified by the Board.
At each Committee meeting the Head of Internal Audit &
Risk gives an update on the progress of the internal audit
plan, which is reviewed to ensure that it is in line with the
Committee’s expectations.
The Committee has continued to monitor the implementation
of recommendations to further enhance the Group’s financial
reporting systems and control environment.
During the year the internal audit plan is reviewed so that
additional areas can be added to the plan based on the
changes that give rise to any increased levels of risk. Any
changes to the agreed audit plan are then approved by
the Committee.
The Head of Internal Audit & Risk has direct access to the
Board Chair and to the Committee Chair and is accountable
to the Committee, meeting regularly with both the Committee
and its Chair, without the presence of management, to
consider the work of internal audit.
The effectiveness of the execution of the internal audit plan
is monitored at each Audit Committee meeting and typically
forms part of the Board’s annual evaluation process.
Subject to the IT control weaknesses being addressed, as
referenced above, the latest evaluation otherwise confirmed
that the Directors were satisfied with the arrangements and
approach currently in place.
Risk management
Members of the Executive Risk Committee meet to challenge
and debate the assessment of risk including emerging risks,
for the Group as a whole and within each business unit, which
have submitted local risk registers for analysis and ranking
together with Company-wide risks to form a robust corporate
risk register. This corporate risk register is presented to the
Audit Committee at least twice each year. Actions arising from
the Audit Committee’s review of the corporate risk register are
fed back to the business units for their management.
Committee oversight
Day-to-day responsibility for effective internal control and risk
management and monitoring rests with senior management
at business unit level. During the year, the CFO and Head of
Internal Audit & Risk attended all Audit Committee meetings to
report on internal control and risk management and notified
the Committee of any control weaknesses, control failings and
risks, their impact and the actions taken to deal with the issues.
Detailed updates on specific areas, such as cybersecurity or
business continuity, are provided at the Committee’s request.
Business Ethics Policy
A policy that sets standards of professionalism and integrity
for all employees and operations was relaunched in 2020
and is regularly refreshed. The Business Ethics Policy includes
sections relating to bribery and corruption to ensure that
all of Spirent’s systems, controls and training comply with
the anti-bribery and corruption legislation in the countries
in which we operate, and that a culture of prevention and
detection of all forms of bribery and corruption is in place.
Anti-bribery training is required to be taken by certain
employees periodically.
Acquisitions and divestments
Disciplined due diligence processes and post-acquisition
integration programmes are in place.
Fraud
The Board of Directors is aware that it bears the primary
responsibility for the detection and prevention of fraud. The
Directors are aware of the potential for fraud and this features
as an element of the Board’s risk assessment and corporate
governance procedures. The Audit Committee reviews these
procedures to ensure that they are in place and working
effectively. This oversight is supported by the work of the
Head of Internal Audit & Risk as part of the internal audit work.
The Group’s Business Ethics Policy, which has been
communicated to all employees, makes clear that employees
also have a responsibility for fraud prevention and detection
and any suspicion of fraud will be reported immediately and
investigated vigorously.
Raising concerns at work
The Committee aims to ensure that employees are able to raise
any concern in confidence about any possible improprieties in
business practices or other matters. A Group-wide Whistleblowing
Policy is in place and is regularly highlighted to employees
and an external third party reporting service is available to
employees for the reporting of any concerns.
Disclosures under this arrangement are investigated promptly
by the Company Secretary and the Head of Internal Audit
& Risk, and are escalated to the Executive Directors and the
Committee as appropriate, with follow-up action being taken
as soon as practicable thereafter.
The Committee is satisfied that the means for employees to
raise concerns at work are appropriate to the size and scale
of the Group.
External audit
The Committee is responsible for overseeing the Company’s
relations with the External Auditor.
The Committee places great importance on ensuring that high
standards of quality and effectiveness are maintained within the
external audit process. It considers a number of areas in relation
to the External Auditor: its performance in discharging the audit
and interim review of financial statements, its independence and
objectivity, its re-appointment and remuneration, with feedback
on these matters provided to the External Audit Partner.
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Auditor appointment
Each year the Committee assesses and reports to the Board
on the qualification, expertise, resources and effectiveness, as
well as the independence of the External Audit Partner and
their team.
The Committee notes and confirms compliance with the
Competition and Markets Authority Order 2014 (the “CMA Order”)
in respect of statutory audit services for large companies.
Following a thorough tender process in 2020, Deloitte LLP
was appointed by the Company at its Annual General Meeting
in April 2021 to audit the financial statements of the Company
for that and subsequent financial periods. Jane Makrakis
succeeded Robert Knight as audit partner during
the prior year.
There are no contractual obligations in existence that restrict
the Company’s choice of auditor.
Auditor effectiveness
The Committee assesses the effectiveness of the audit
process on an ongoing basis, with particular attention to the
mindset and culture, skills, character and knowledge, quality
control and judgement of the External Auditor in its handling
of key judgements, its responsiveness to the Committee
and its commentary where appropriate on the systems of
internal control.
The Committee holds regular private meetings with the
External Auditor to assist with its assessment, including
discussion of:
• how the External Auditor has identified and addressed
potential risks to audit quality;
• the controls in place within the external audit firm to identify
risks to audit quality, including the results of internal and
external inspections of the external audit team and firm;
• whether the External Auditor has met the agreed audit plan,
in particular how it has responded to any changes that
have been required during the process;
• feedback from the key people involved in the audit; and
• the content of the External Auditor’s management letter.
In addition, the Committee monitors the External Audit
Partner’s involvement in their team’s work to ensure sufficient
oversight and direction of work was evident, in particular
with regard to the audit of significant components
involving judgements.
The effectiveness of the External Auditor also forms part of
the Board’s annual evaluation process.
Auditor independence
The Committee assesses the independence and objectivity
of the External Auditor annually, taking into consideration
relevant UK law, regulation, the FRC Revised Ethical Standard
and other professional requirements. Deloitte has provided
a letter confirming its belief that it remained independent
throughout the period under review and has discussed
with the Committee the threats to its independence and
the safeguards applied to mitigate those threats.
As part of this review, the Committee examined in particular:
• a report from the External Auditor describing its
arrangements to identify, report and manage any conflicts
of interest; and
• the extent of non-audit services provided by the
External Auditor.
Policy on non-audit services
The Committee is responsible for pre-approving the
engagement of the External Auditor for any and all non-audit
services, with the objective of ensuring that the provision
of such services by the External Auditor does not impair its
independence or objectivity. Taking into account relevant
ethical guidance, the Committee’s policy precludes a number
of non-audit services, including those relating to the accounting
records and financial statements, internal audit, IT consulting,
legal and investment services and other services deemed
by regulators to be precluded, with only a limited number
of assurance related engagements permitted.
The Committee accepts that certain work of a non-audit
nature may be best undertaken by the External Auditor. The
policy is reviewed annually and financial limits for the provision
of non-audit services, including audit-related fees and other
fees, are set on the same annual basis (2024 $0.3 million
(2023 $0.3 million)). These were less than one-third of the
Group’s audit fee of $1.8 million (2023 $1.7 million). The
Committee can confirm that no non-audit services were
provided by Deloitte during the period under review other
than the interim review fee of nil (2023 $0.1 million).
Audit Committee report continued
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Report on Directors’ remuneration
Dear shareholder
I am pleased to present the Directors’ Remuneration Report
for the year, which sets out details of how our Remuneration
Policy was implemented for the year ended 31 December
2024 and how it will be applied for the year ending
31 December 2025.
The recommended takeover of Spirent by Keysight
Technologies, Inc. (“Keysight”) was approved by Spirent’s
shareholders in May 2024. The Committee’s activities during
the year have related to the ongoing implementation of
the Remuneration Policy, which will continue to apply until
the transaction closes and Spirent delists from the FTSE,
and the approach to remuneration upon completion of the
transaction, details of which are set out in the Co-operation
Agreement entered into between Spirent and Keysight dated
28 March 2024, made available on the company website.
The Committee considered the transaction at length including
in respect of the retention of critical talent and the impact on
“in-flight” incentive awards. In particular, as it became clear
that the need for regulatory approvals would mean the
transaction would not complete during 2024, the Committee
made decisions in respect of variable pay outcomes for 2024
and awards for 2025 under the existing approved Policy
and in accordance with the applicable incentive plan rules,
albeit mindful of the extraordinary circumstances resulting
from the transaction. Assuming the transaction completes
during the 2025 financial year, “in-flight” incentive awards
held by Executive Directors (including the deferred bonus
awards granted in respect of bonuses for the 2024 financial
year), and awards of other colleagues, will be treated in
Gary Bullard
Committee Chairman
Compliance statement
The Report on Directors’ Remuneration for the year
ended 31 December 2024 describes how the Board,
via the Remuneration Committee (the “Committee”),
has applied the principles and complied
with the provisions of the 2018 UK Corporate
Governance Code.
accordance with the applicable incentive plan rules, the
Co-operation Agreement and, where relevant, Directors’
Remuneration Policy.
Executive remuneration outcomes in 2024
The Annual Incentive for 2024 was based on the achievement
of targets for profitability, revenue and strategic and operational
priorities. Stretching targets were set at the beginning of the
year. Importantly, these were set prior to the receipt of the
Keysight offer and therefore did not make any assumptions
for the impact of the takeover on performance in the year.
Despite challenging market conditions, our leadership team has
continued to drive the strategy forwards in 2024. Spirent has
continued to protect our R&D investments in key technologies
which we expect to drive our long-term structural growth when
customer spending improves, and performance in the second
half of the year resulted in an uptick based on the same period
in 2023. However, over the course of the year it has become
clear that the takeover announcement has impacted Spirent’s
financial performance. A combination of the loss of business due
to customer hesitancy caused by the takeover announcement
and operational efficiencies which were paused pending the
completion of the transaction mean that the formulaic outcome
under the Annual Incentive does not reflect the underlying
performance of the business and of colleagues over the year.
The Committee has worked carefully to quantify this
impact and, in line with the discretion permitted within the
Remuneration Policy, has approved an adjustment to the
reported revenue and profitability outturns which results in
an Annual Incentive outcome of 82.0 per cent of maximum.
This ensures that our Annual Incentive participants are
remunerated in a manner which is consistent with what was
intended at the beginning of the period when the targets
were set for the level of underlying performance that has
been achieved. Full details of the specific financial and
non-financial targets set and the performance against those
targets can be found on pages 86 to 87. One-third of the
Annual Incentive achieved for 2024 will again be deferred
into shares, to be retained for a period of three years.
The Long-Term Incentive Plan (“LTIP”) awards granted to
the Executive Directors in 2022 were based on a stretching
Earnings Per Share performance condition. The Committee
also has discretion to override the formulaic out-turn of
the awards in line with the Directors’ Remuneration Policy
if appropriate to do so, to take into account the underlying
financial and operational performance of the Company.
As set out in the Co-Operation Agreement, all in-flight LTIP
awards granted before March 2024 will vest in full upon
completion of the takeover. This was determined by the
Committee in February 2024, as part of its considerations
in relation to the takeover, before the Co-Operation
Agreement was entered into. The Committee considered
it appropriate for all in-flight awards including the 2022
LTIP to vest in full based on its assessment of the underlying
financial performance of the Company and its strong
operational performance over the period. Whilst the 2022
LTIP will now vest prior to completion of the takeover, the
Committee considers that its rationale for full vesting based
on its assessment of the Company’s underlying financial
performance and strong operational performance remains
the same, and in particular, taking into account the external
market environment over the performance period as a
whole as well as the impact of the announcement of the
combination with Keysight in the last year.
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Executive remuneration outcomes in 2024 continued
The Committee also took into account the launch of new
products in a number of fast-growing markets and immediate
wins from data centre customers, continued investment in
solutions aligned to our strategy to support growth in our
markets and cost actions implemented to preserve our
efficient operating platform.
The incentive outcomes above have resulted in a total single
figure for the CEO of £1.9 million (2023 £1.4 million) and for
the CFO of £1.0 million (2023 £0.8 million). The Committee
carefully considered the decisions made on executive
remuneration in the context of the transaction and believes
that the 2024 outcomes are a fair reflection of company
and individual performance and align with the broader
shareholder experience.
Executive remuneration in 2025
The Co-operation Agreement permits the Committee to grant
LTIP awards in 2025 in accordance with its usual practice as
varied by our new LTIP rules and new Remuneration Policy
approved at the AGM in 2024.
At the 2024 AGM, shareholders approved our new
Remuneration Policy which permits the grant of performance
share awards (“PSAs”), restricted share awards (“RSAs”), or a
combination of the two, up to a target value of 200 per cent of
salary. For 2024, as we signalled to shareholders in advance,
no changes were made to the implementation of the LTIP for
current Executive Directors, who were granted a PSA of 200
per cent of salary for the CEO and 175 per cent of salary for
the CFO, in line with prior years.
The Committee is grateful to the shareholders who voted
in favour of the new Directors’ Remuneration Policy but
noted that some shareholders felt unable to support it. In
practice, given the substantial changes to the shareholder
register as a result of the proposed takeover by Keysight,
it proved impractical to consult with shareholders immediately
following the AGM to discuss further the reasons for the voting
outcome below 80 per cent, as many of the shareholders who
voted against the resolution no longer appeared on the share
register. However, we had engaged in extensive discussions
before the Policy vote. We also engaged with shareholders on
the current share register towards the end of 2024 and during
early 2025, to explain the changes to the implementation of
the LTIP for 2025, in line with the commitment made in last
year’s Directors’ Remuneration Report, as set out below.
Since the introduction of the new Policy in 2024, there have
been a number of significant developments for Spirent,
in particular the pending takeover of the Company by
Keysight. Having carefully reviewed these circumstances, the
Committee is replacing the grant of a PSA of 200 per cent of
salary for the CEO and 175 per cent of salary for the CFO,
with a RSA of the same face value for the 2025-2027 LTIP
awards. The Committee believes this approach to be in the
best interests of the Company for the following reasons:
1. In the current circumstances, it is impossible to set
meaningful long-term targets for a PSA The pending
regulatory approval of Keysight’s takeover creates
significant uncertainty over the outlook for the Company in
the medium term. Setting meaningful 3-year performance
targets for a PSA is very challenging in these circumstances.
Furthermore, setting targets based on a “business-as-usual”
scenario which ignores any impact of the proposed
takeover is difficult from a forecasting perspective and
also risks creating an incentive that is misaligned with
the best interests of the Company in the context of the
takeover. These factors could undermine the effectiveness
of the PSA as a motivational tool for our Executive Directors.
Granting RSAs avoids the challenge of setting these
performance targets and the risks associated with them.
2. A RSA results in the same outcome as a PSA under
the terms of Co-operation Agreement Under the
Co-operation Agreement, if the takeover becomes
effective before the vesting date of outstanding awards,
the awards are rolled over into Keysight awards with all
performance conditions disapplied, which effectively
results in a full vesting of the awards. By disapplying the
performance conditions, outstanding PSAs are equivalent
to outstanding RSAs. Granting RSAs to the Executive
Directors would therefore result in no higher payout
in the event that the transaction proceeds than if PSAs
are granted.
3. A RSA has more retention value than a PSA in the
event the transaction does not proceed Whilst the
Committee fully expects the takeover to complete,
in the event that for some reason it does not proceed,
it could result in a period of significant uncertainty for
Spirent. In this circumstance it would be beneficial from
a retention perspective for LTIP participants to have a
RSA rather than a PSA which is inherently less certain
due to the performance conditions (and would be even
less certain for Spirent in this circumstance due to the
challenge in setting performance conditions, as set
out in point 1 above).
For the 2025-2027 LTIP awards, the Committee therefore
proposes the following:
• CEO RSA: 200 per cent of salary face value.
• CFO RSA: 175 per cent of salary face value.
Neither Executive Director will receive a PSA component
in 2025. The 2025 RSA award will be assessed against an
underpin that requires the Committee to confirm that vesting
is appropriate in the context of the financial and operating
performance of the Group (giving greater weight to the
former); the Committee may lapse the award in whole or
part if it concludes that a minimum required standard of
performance is not achieved.
In 2025, Executive Director salaries will be increased by 4.5
per cent, aligned with the average increase across the wider
employee base. For the Annual Incentive, subject to the terms
of the Co-operation Agreement, the metrics of profitability,
revenue and strategic and operational priorities remain the
same. Targets will be disclosed retrospectively in next year’s
Directors’ Remuneration Report, as required. One-third of the
Annual Incentive achieved will be deferred into shares, to be
retained for a period of three years.
I hope you find this report clear and informative. I will be
available at the 2025 AGM to respond to any questions
that shareholders may have with respect to the work of
the Committee.
Gary Bullard
Chairman, Remuneration Committee
4 March 2025
Report on Directors’ remuneration continued
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CORPORATE GOVERNANCE
At a glance
Performance snapshot
Annual Incentive performance
Measure
Performance
opportunity (%)
Achievement
(% of max)CEO CFO
Adjusted OP 50.00 50.00 100.00
Revenue 30.00 30.00 40.00
Project Monarch 10.00 10.00 100.00
Customer base 10.00 10.00 100.00
Long-Term Incentive performance
Measure Performance (%)
Achievement
(% of max)
Earnings per share
1
50.00 —
Relative Total
Shareholder Return
2
50.00 —
Notes
1. Data shown relates to the EPS element of the LTIP award which
will vest in May 2025, based on performance to 31 December 2024.
2. Data shown relates to the TSR element of the LTIP award which
vested in May 2024.
Alignment of 2024 executive remuneration with Group strategy
Performance measure
Annual
Incentive LTIP Reason for selection
Adjusted operating profit A key performance indicator showing overall performance of the Group
Revenue A key performance indicator showing how successful Spirent has been in
expanding its markets and growing its customer base
Strategic and
operational priorities
A focus on specific factors aligned with Spirent’s short and medium-term
strategic objectives that promote long-term performance
Adjusted EPS A key measure of underlying profitability
Relative TSR A key measure of Spirent’s return to shareholders through the cycle
£’000
Salary
Benefits
Retirement benefits
Annual Incentive
Long-Term Incentive
Total CEO remuneration £000
2,000
1,500
1,000
500
0
2,000
1,500
1,000
500
0
2024 20242023 2023
Total CFO remuneration £000
Performance/vesting period
Deferral/retention period
Incentive timelines
Annual Incentive
Long-Term Incentive
0 1 2 3 4 5
Years
2
31
3
1,872.0
993.5
1,416.8
835.7
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Spirent Communications plc Annual Report 2024
Annual remuneration report
Single figure of total Executive Directors’ remuneration 2024 (audited)
The tables below set out the single figure of remuneration received by the Executive Directors during 2024. Details of
performance under the Annual Incentive and Long-Term Incentive Plans are set out on pages 86 to 87 and 89 respectively.
Paula Bell
£000
Eric Updyke
1
£000
2024 2023 2024 2023
Salary/fees
2
403.6 403.6 708.0 727.3
Benefits
3
17.8 15.0 28.0 15.7
Retirement benefits
4
56.5 56.5 32.7 43.5
Fixed remuneration 477.9 475.1 768.7 786.5
Annual Incentive
5
414.9 84.1 873.0 168.7
Long-Term Incentive
6
100.6 276.5 230.3 461.6
Variable remuneration 515.5 360.6 1,103.3 630.3
Total
7
993.4 835.7 1,872.0 1,416.8
Notes
1. 2024 data for Eric Updyke, who is US based and paid in US Dollars, has been converted using an exchange rate of $1.278 (2023 $1.244:£1).
2. Salary/fees: cash paid in respect of the year.
3. Benefits: taxable value of all benefits in respect of the year which comprise private healthcare, permanent health insurance, life insurance and car allowance.
4. Retirement benefits: cash value in lieu of pension for Paula Bell; Company contributions to 401(k) plan and to Deferred Compensation Plan for Eric Updyke.
5. Annual Incentive: cash incentive payable in respect of performance during 2024, one-third of the value of which will be deferred into shares.
6. Long-Term Incentive: value of elements of LTIP awards vesting based on performance during 2024.
7. The total single figure of remuneration for 2023 for each Executive Director has been restated to reflect the actual Long-Term Incentive figure using the share
price at the date of vesting of 176.5 pence.
Annual Incentive (audited)
During 2024, incentives were available to Executive Directors on an annual basis, with the following maximum total Annual
Incentive available:
2024
base salary
£000
On-target total
incentive available
Maximum total
incentive available
Per cent of
base salary £000
Per cent of
base salary £000
Paula Bell 403.6 75.0 302.7 125.0 504.5
Eric Updyke 708.0 90.0 637.2 150.0 1,062.0
The maximum Annual Incentive which could be earned was determined by reference to growth targets in the Company’s
adjusted operating profit and revenue, representing 50 per cent and 30 per cent of the incentive respectively, with performance
against an agreed set of strategic and operational priorities linked to improving Spirent’s performance representing the
remaining 20 per cent of the incentive.
Adjusted operating profit element (50 per cent of Annual Incentive)
Target
$ million
Achievement
$ million
Entry point (20 per cent) 45.0 —
On target (60 per cent) 50.0 —
Maximum (100 per cent) 59.0 64.0
Achievement 100 per cent
Report on Directors’ remuneration continued
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Spirent Communications plc Annual Report 2024
Revenue (30 per cent of Annual Incentive)
Target
$ million
Achievement
$ million
Entry point (20 per cent) 470.0 —
On target (60 per cent) 490.0 480.3
Maximum (100 per cent) 510.0 —
Achievement 40 per cent
Strategic and operational priorities (20 per cent of Annual Incentive)
Eric Updyke and Paula Bell were each set priorities at the start of 2024, with performance of each target to be equally weighted.
Project Monarch (CEO: Eric Updyke; CFO: Paula Bell)
Objective: Successful implementation of new operating model to drive synergies and improved engineering and design collaboration.
The redesign of an effective new operating model, to drive more efficient engineering design processes, reduce overhead costs,
and focus on new value streams to drive improved focus on routes to market, ensure optimal customer experience and drive
efficient delivery of product road maps to plans. This was successfully implemented during 2024.
Achievement
Achievement 100 per cent
Diversification of customer base (CEO: Eric Updyke; CFO: Paula Bell)
Objective: Further diversification of the customer base outside of telcos, to be measured by growth in bookings for
non-telco business.
Further diversification of the customer base outside of the telco business was achieved in FY 2024, with critical wins in Financial
Services in particular, as well as a very successful launch of AI resulting in immediate wins for CIP. Pivoting and focusing efforts
on AI workload emulation gave the ability to both tap into net-new markets as well as cross-sell into incumbent accounts
(neither of which are beholden to the cyclicality of speeds & feeds ups and downs), with some notable key account wins.
Achievement
Achievement 100 per cent
Summary of Annual Incentive target outcomes, before discretion
CFO
Paula Bell
CEO
Eric Updyke
Per cent of total
incentive
Achievement as per
cent of maximum
opportunity
Achievement as per
cent of maximum
opportunity
Adjusted operating profit 50.00 70.00 70.00
Revenue 30.00 — —
Strategic and operational priorities:
Project Monarch 10.00 100.00 100.00
Diversification of customer base 10.00 100.00 100.00
Total 100.0 55.0 55.0
The formulaic outturn for the adjusted operating profit measure and revenue measure were $46.2 million and $460.2 million
respectively. In assessing the performance for the 2024 Annual Incentive against the targets set at the beginning of the year, the
Committee reviewed the impact of a decline in business activity due to customer hesitancy as a result of the transaction and cost
saving initiatives which were not implemented in the year due to the delays in the completion of the takeover. The Committee
exercised discretion to adjust the outcomes under the adjusted operating profit and revenue metrics to ensure that Annual
Incentive participants are remunerated in a manner which is consistent with what was intended at the beginning of the period
when the targets were set for the level of underlying performance that has been achieved. These adjustments resulted in an
increase of adjusted operating profit figure of $64.0 million (100 per cent achievement) and revenue figure $480.3 million (40
per cent achievement) which in combination with the strategic outcomes results in an Annual Incentive outcome of 82.0 per cent
of maximum.
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Annual Incentive (audited) continued
Summary of Annual Incentive target outcomes, after discretion
2024 2023
Per cent of
maximum
Annual
Incentive
opportunity
Per cent of
annual base
salary £000
Per cent of
maximum
Annual
Incentive
opportunity
Per cent of
annual base
salary £000
Paula Bell 82.0 102.8 414.9 16.7 20.9 84.1
Eric Updyke 82.0 123.3 873.0 15.5 23.2 168.7
Deferred Bonus Plan (audited)
The Remuneration Policy approved by shareholders mandates the deferral of one-third of the incentive achieved under
the Annual Incentive into shares, to be retained for a period of three years. This applies to Executive Directors employed by
the Group at the date of the payment of the Annual Incentive. The deferral element of the 2024 Annual Incentive will therefore
be applied as follows:
Total value of Annual
Incentive achieved
£000
Value of Annual
Incentive payable
as cash
£000
Value of Annual
Incentive deferred
into shares
£000
Vesting date for
deferred shares
Paula Bell 414.9 276.6 138.3 March 2028
Eric Updyke 873.0 582.0 291.0 March 2028
Total retirement entitlements (audited)
During 2024, Paula Bell received a taxable cash allowance in lieu of pension of 14 per cent of base salary; the allowance paid
was £56,509 (2023 14 per cent of base salary, £56,509).
Eric Updyke is eligible to participate in the Spirent Communications, Inc 401(k) programme with a 4 per cent Company
match of his own contributions, subject to any applicable IRS cap. Mr Updyke enrolled in the programme on 1 January 2020,
receiving Company contributions for 2024 of £10,798 (2023 £10,390). Mr Updyke is also eligible to participate in the US
Deferred Compensation Plan, a scheme which allows individuals to elect to defer compensation from the Company until a
later date. A 4 per cent Company match was applied to compensation deferred in 2024, with Mr Updyke receiving £21,900
(2023 £33,061).
Retirement benefits were fully aligned with the wider employee base throughout the year and would typically remain so
going forwards.
Long-Term Incentive Plan outcomes (audited)
The operation of the LTIP in previous years has been such that the EPS and Absolute TSR performance measures run over
different performance periods. The 2022 award had EPS as its sole measure.
EPS Absolute TSR
The performance period for EPS performance conditions
starts at the beginning of the financial year in which the
award is granted and ends three financial years later.
The performance period for Absolute TSR performance conditions
starts shortly before the date of grant and ends three years later.
Report on Directors’ remuneration continued
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Spirent Communications plc Annual Report 2024
The LTIP value reported in the single total figure of remuneration relates to measures where the performance period completed
during the relevant year. Consequently, the EPS and Absolute TSR elements disclosed in the single total figure of remuneration
relate to different LTIP awards. This is set out in further detail as follows.
Award Performance metrics
Weighting
per cent Threshold Maximum Actual
Achievement
per cent
2021 LTIP EPS
(2023 single figure) 75.00 16.99 cents 20.62 7.55 —
Absolute TSR
(2024 single figure) 25.00
20.00
per cent
48.00
per cent
Below
threshold —
2022 LTIP EPS
(2024 single figure) 100.00 18.97 cents 23.03 cents 7.75 —
The Committee considered it appropriate to exercise discretion to override the formulaic out-turn of the 2022 LTIP in line with
the Remuneration Policy, such that the 2022 LTIP will now vest in full, taking into account the underlying financial performance
of the Company as well as the continued strong operational performance over the period. In particular, the Committee took into
account the external market environment over the performance period as a whole as well as the impact of the announcement
of the combination with Keysight in the last year. The Committee also took into account the launch of new products in a number
of fast-growing markets, immediate wins from data centre customers, continued investment in solutions aligned to our strategy
to support growth in our markets, and cost actions implemented to preserve our efficient operating platform. It considers the
adjusted outcome to be a fair reflection of Company and individual performance and aligns with the broader shareholder
experience.
2024 LTIP single figure reconciliation
Absolute TSR
(2021 LTIP
Award)
EPS
1
(2022 LTIP
Award)
2024 single
figure
Paula Bell Shares awarded 64,795 279,373 —
Achievement per cent — 100.00 —
Shares vesting — 279,373 —
Value of vested shares £000 — 485,466 485,466
Increase in value due to share price appreciation £000 — — —
Eric Updyke Shares awarded 109,088 500,011 —
Achievement per cent — 100.00 —
Shares vesting — 500,011 —
Value of vested shares £000 — 868,869 868,869
Increase in value due to share price appreciation £000 — — —
Note
1. As set out in the Chair’s letter, the Remuneration Committee applied discretion to the outcome of the 2022 LTIP award; the estimated value is based on the
three-month average price of a Spirent Ordinary Share to 31 December 2024 of 173.77 pence.
External appointments (audited)
Fees in respect of Paula Bell’s and Eric Updyke’s Non-executive Director roles are paid directly to and retained by them.
Payments to past Directors (audited)
No payments were made to past Directors during the year under review.
Payments for loss of office (audited)
There were no payments for loss of office during the year under review.
Payments of advances, credits or guarantees (audited)
There were no payments of advances, credits or guarantees to Directors during the year under review.
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Executive Directors’ interests in share awards (audited)
The table below sets out the Executive Directors’ interests in share awards. Details of the Executive Director shareholding
requirements and achievements against these are set out later.
Unvested
LTIP awards
1
Unvested
DBP awards
2
Paula Bell
3
At 1 January 2024 933,746 194,707
Granted at 1.7804 pence (face value LTIP £706,367; DBP £28,029) 396,746 15,743
Dividend equivalents — 5,313
Vested/released — 51,695
Lapsed 259,181 —
At 31 December 2024 1,071,311 153,442
Eric Updyke
3
At 1 January 2024 1,769,836 357,659
Granted at 1.7804 pence (face value LTIP £1,419,497; DBP £54,886) 797,291 30,828
Dividend equivalents — 9,642
Vested/released — 93,793
Lapsed 436,353 —
At 31 December 2024 2,130,774 285,052
Notes
1. Awards under the LTIP will only vest to the extent that relevant performance conditions are met.
2. No performance conditions apply to DBP awards.
3. Face value equals number of awards at the price granted.
Share incentive interests awarded during the year (audited)
In March 2024 the Committee approved awards to Ms Bell and Mr Updyke, as shown in the table, using an average closing
share price for the five days prior to the award date, as follows:
• Restricted stock units under the Deferred Bonus Plan representing one-third of the value of the Annual Incentive outcome
based on performance during 2023. These awards will vest in March 2027, with no further performance conditions to
be satisfied.
• Performance Shares under the Long-Term Incentive Plan equivalent to 175 per cent and 200 per cent of base salary
respectively. In 2023, the metrics and weightings for LTIP awards to Executive Directors were changed from those used
in previous years, in response to feedback from shareholders.
50 per cent of the award:
Earnings per share
The EPS performance period starts at the beginning of the financial year in which the award is made, in this case on
1 January 2024, and ends after three years, in this case on 31 December 2026. The adjusted EPS figure reported for the
financial period to 31 December 2024, which forms the baseline for this performance target, was 7.55 cents.
Target EPS (adjusted) Proportion of Performance Shares vesting (per cent)
Below 7.55 cents 0
7.55 cents 25
Above 7.55 cents and below 10.32 cents On a straight-line basis between 25 and 100
10.32 cents and higher 100
Report on Directors’ remuneration continued
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Spirent Communications plc Annual Report 2024
40 per cent of the award:
Relative TSR against the FTSE 250 Index (excluding financial services and investment trusts)
When determining Relative TSR growth for the Company, share prices are averaged over 90-day periods immediately prior to,
and at the end of, the performance period commencing 14 days prior to the date of award and ending three years later.
Relative TSR
1
– total growth Proportion of Performance Shares vesting (%)
Below median growth 0
Median growth 25
Above median but below upper quartile growth On a straight-line basis between 25 and 100
Upper quartile growth or higher 100
Note
1. Growth includes re-invested dividends.
10 per cent of the award:
ESG
Achievement over the 3-year period of the aggregate carbon emissions reduction targets necessary to meet the Science Based
Targets initiative to limit global warming to 1.5 degrees centigrade.
Awards made to Executive Directors under the Spirent Long-Term Incentive Plan are subject to a post-vesting holding period
of an additional two years.
Dilution (audited)
Overall shareholder dilution resulting from the Company’s discretionary share incentive plans (on a rolling ten-year basis)
as at 31 December 2024 was 0.2 per cent (2023 0.5 per cent). The overall number of such share incentives outstanding
at 31 December 2024 was 12.4 million (2023 11.1 million).
Table of CEO remuneration
1
Year CEO
CEO single figure of
total remuneration
£000
Annual bonus
payout against
maximum
opportunity
per cent
Long-Term Incentive
vesting rates against
maximum
opportunity
per cent
2024 Eric Updyke 1,872.0 82.0 100.0
2023 Eric Updyke 1,416.8 12.1 —
2022 Eric Updyke 2,878.1 61.0 100
2021 Eric Updyke 2,536.2 100.0 86
2020 Eric Updyke 1,867.6 83.2 100
2019 Eric Updyke
2
968.8 85.1 —
2019 Eric Hutchinson
3
1,548.6 85.1 89
2018 Eric Hutchinson 1,533.4 80.0 63
2017 Eric Hutchinson 1,292.6 86.8 —
2016 Eric Hutchinson 632.6 22.6 —
2015 Eric Hutchinson 497.1 — —
2014 Eric Hutchinson 521.6 — —
Notes
1. Data for Mr Updyke’s earnings are presented in Sterling based on an average exchange rate for 2024 of $1.278:£1. Prior year data in this table has been
recalculated from US Dollars to be presented in Sterling at the following average exchange rates: 2023 $1.2705:£1; 2022 $1.2360:£1; 2021 $1.3745:£1;
2020 $1.284:£1; 2019 $1.2779:£1; 2014 $1.65:£1; 2013 $1.56:£1. During the years 2018 to 2015, Mr Hutchinson’s salary was paid in Sterling, so no currency
calculation is required.
2. Eric Updyke took up the position of CEO on 1 April 2019.
3. Earnings disclosed are to 30 June 2019, when Eric Hutchinson retired from the Spirent Group.
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CEO pay ratio
For the purposes of this year’s disclosure, the gender pay gap data from our 5 April 2024 snapshot has been used to identify
the three appropriate employees for comparison with the CEO (Option B). Further detail on the methodology is set out below.
The table below compares the 2024 single figure of remuneration for the individual who fulfilled the role of CEO during the
period with that of the Group employees who are paid at the 25th percentile (lower quartile), 50th percentile (median) and
75th percentile (upper quartile) of its UK employee population.
Method
25th
percentile
pay ratio
Median
pay ratio
75th
percentile
pay ratio
2024 Option B 39:1 26:1 15:1
2023 Option B 36:1 23:1 13:1
2022 Option B 65:1 44:1 28:1
2021 Option B 54:1 38:1 22:1
2020 Option B 50:1 32:1 18:1
2019
1
Option B 72:0 53:1 24:1
Note
1. The data provided for 2019 is the aggregate 2019 single figure of remuneration for the two individuals who fulfilled the role of CEO during the period
which includes a three-month period where both individuals were receiving remuneration and Annual Incentive payments to both individuals.
The remuneration figures for all employees were determined at 31 December 2024.
Under Option B, the latest available gender pay gap data is used to identify the best equivalent for three Group employees in
the UK whose hourly rates of pay are at the 25th, 50th and 75th percentiles for the Group and their total pay and benefits figure
for 2024 is then calculated. The identified employees are considered to be reasonably representative since the structure of their
remuneration arrangements is in line with that of the majority of the UK workforce. The table below sets out the salary and total
pay and benefits for the three identified quartile point employees:
25th
percentile
(P25)
Median
(P50)
75th
percentile
(P75)
Salary (£) 39,266 62,100 84,739
Total pay and benefits (£) 47,977 72,546 126,595
Each employee’s pay and benefits were calculated using each employee’s remuneration, consistent with the CEO remuneration,
on a full-time equivalent basis. No adjustments were made and no components of pay have been omitted.
Base salaries of all employees, including our Executive Directors, are set with reference to a range of factors including market
practice, experience and performance in role. In reviewing the ratios the Committee also noted that the CEO’s remuneration
package is weighted more heavily towards variable remuneration (including the Annual Incentive and Long-Term Incentive Plan)
than the wider workforce due to the nature of the role. This means the ratio is likely to fluctuate depending on the performance
of the business and associated outcomes of incentive plans in each year.
The Committee notes that the 2019 ratio data covered a period during which there were two individuals in the role of CEO, one
of whom (Eric Hutchinson) received a significant vesting of an LTIP award during the period; although the 2020, 2021 and 2022
data includes the vesting of the tranches of Eric Updyke’s buyout award of restricted stock, this award was at a lower quantum.
The Committee continues to believe the median pay ratio is consistent with the pay, reward and progression policies for our UK
employees. The salary and total pay and benefits levels for the CEO and median representative employee are competitively
positioned within the relevant markets and reflect the operation of our remuneration structures. These are effective in
appropriately incentivising staff, while having regard to the Company’s risk framework and risk appetite and to rewarding
the approach as well as the outcome of performance.
Report on Directors’ remuneration continued
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Percentage change in remuneration of the Directors and average employee
The table below shows the movement in salary, benefits and Annual Incentive for each of the Directors between the current
and prior years compared to the remuneration of the average employee
1
:
Executive Directors Non-executive Directors
2
Average
Group
Employee
1
Eric
Updyke
3
Paula
Bell
Sir Bill
Thomas
Maggie
Buggie
3
Gary
Bullard
Wendy
Koh
Edgar
Masri
Jonathan
Silver
Base salary
2023–2024 1.69 — — — — — — — —
2022–2023 (3.3) 15.0 4.75 4.75 4.75 4.75 4.75 4.75 4.75
2021–2022 0.2 3.0 3.0 21.2 n/a 2.6 3.1 3.1 2.6
2020–2021 4.4 3.0 3.0 3.0 — 5.6 3.0 3.0 4.1
2019–2020 4.1 3.0 3.5 3.0 — 2.6 2.9 2.9 2.4
2018–2019 4.8 n/a 3.0 9.4 — 2.5 5.7 5.7 2.5
Benefits
4
2023–2024 (7.21) 78.3 18.6 — — — — — —
2022–2023 0.6 17.0 (22.9) — — — — — —
2021–2022 (0.7) 4.2 2.7 — — — — — —
2020–2021 10.3 46.7 2.4 — — — — — —
2019–2020 7.1 38.2 2.9 — — — — — —
2018–2019 (6.6) n/a 2.7 — — — — — —
Annual Incentive
5
2023–2024 (188.0) (17.1) (33.3) — — — — — —
2022–2023 (67.6) (78.0) (41.3) — — — — — —
2021–2022 (26.2) (37.2) (30.3) — — — — — —
2020–2021 14.8 25.8 27.1 — — — — — —
2019–2020 6.2 0.7 (3.4) — — — — — —
2018–2019 12.3 n/a 36.3 — — — — — —
Notes
1. Average Group employee data is based on the employee remuneration costs and average number of employees set out in the notes to the consolidated
financial statements with costs for the CEO, CFO and Non-executive Directors removed.
2. Non-executive Directors do not receive benefits or pension payments and are not eligible for variable remuneration.
3. Where the incumbent did not serve for the full year, the calculation has not been made as it is not representative. Eric Updyke joined the Board in April 2019;
Maggie Buggie joined the Board in April 2021.
4. Benefits include employer retirement benefit contributions and Company match payments, car allowance, health insurance and life assurance.
5. Total Annual Incentive includes all Annual Incentive payments and commission.
Relative importance of the spend on pay
The following table shows the total expenditure on pay for all of the Company’s employees compared to distributions
to shareholders by way of dividend. In order to provide context for these figures, adjusted operating profit is also shown.
2024
$ million
2023
$ million
Per cent
change
Employee remuneration costs
1
263.4 255.9 2.93
Distributions to shareholders
2
— 46.5 —
Adjusted operating profit
3
46.2 45.2 2.21
Notes
1. Remuneration, social security costs, pension and other related costs and expense of share-based payment (see note 8 to the consolidated financial statements).
2. Dividends declared and paid in the year (see note 12 to the consolidated financial statements).
3. Before acquired intangible assets, share-based payment and other adjusting items amounting to $35.9 million in total (2023 $26.8 million).
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Total Shareholder Return (TSR) performance
The graph below shows the TSR performance for the last ten financial years of Spirent Communications plc against the FTSE
250 Index and the FTSE TechMARK 100 Index, excluding those companies which were also constituents of the FTSE 100 Index
at the commencement of the period. These indices have been selected as the most relevant comparators for Spirent across
the time period reflected in the graph below due to Spirent’s business operations in the technology space and the Company’s
market capitalisation and size.
Ten-year TSR performance – Spirent vs FTSE TechMARK 100
and FTSE 250
600
500
400
300
200
100
0
Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 20 Dec 21 Dec 22 Dec 23 Dec 24
Spirent FTSE 250 FTSE TechMARK 100
1
Note
1. As of 1 January 2015, excluding FTSE 100 companies.
The middle market price of an Ordinary Share at the close of business on the first and last days the London Stock Exchange was
open for trading in 2024 was 122.5 pence and 177.0 pence, respectively, and during that period ranged between a high of
200.0 pence and a low of 104.5 pence.
Non-executive Director fees (audited)
Details of individual appointments are as follows:
Director
First appointed as
a Director
Current appointment
due to expire
Maggie Buggie 29 April 2021 2025 AGM
Gary Bullard 1 December 2016 2026 AGM
Wendy Koh 11 January 2018 2027 AGM
Edgar Masri 11 January 2018 2027 AGM
Jonathan Silver 25 June 2015 2025 AGM
Sir Bill Thomas 1 December 2016 2026 AGM
Single figure of total Non-executive Directors’ remuneration 2024 (audited)
Maggie Buggie Gary Bullard Wendy Koh Edgar Masri Jonathan Silver Sir Bill Thomas
£000 £000 £000 £000 £000 £000
2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023
Salary/fees 58.9 58.9 69.9 69.9 58.9 58.9 58.9 58.9 70.9 70.9 235.7 235.7
Benefits
1
— — — — — — — — — — — —
Retirement benefits
1
— — — — — — — — — — — —
Total 58.9 58.9 69.9 69.9 58.9 58.9 58.9 58.9 70.9 70.9 235.7 235.7
Notes
1. Non-executive Directors do not receive benefits or pension payments and are not eligible for variable remuneration.
Report on Directors’ remuneration continued
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Executive Director shareholdings as a percentage of 2024 base salary
1
Statement of Directors’ shareholdings and share interests (audited)
The beneficial interests of the Directors and their connected persons in the shares of the Company are set out below:
At 31 December 2023
or date of
appointment
Ordinary Shares
1
At 31 December 2024
Ordinary Shares
1
At 4 March 2025
Ordinary Shares
1
Executive Directors
Paula Bell
2
593,453 625,402 625,674
Eric Updyke 933,928 1,000,779 1,000,779
Non-executive Directors
Maggie Buggie 20,458 20,458 20,458
Gary Bullard 135,215 135,215 135,215
Wendy Koh — — —
Edgar Masri 20,000 20,000 20,000
Jonathan Silver 100,000 100,000 100,000
Sir Bill Thomas 94,873 94,873 94,873
Notes
1. Directors’ beneficial interests do not form part of the remuneration provided by the Company.
2. Since 31 December 2024, Paula Bell has acquired 136 “Partnership” Ordinary Shares and received 136 “Matching” Shares under the UK Employee Share
Purchase Plan at a price of 1.82 pence per share (138 shares) and 1.873 pence per share (134 shares), respectively.
Shareholding guidelines for Executive Directors (audited)
The Committee believes that to further align their interests with those of shareholders, Executive Directors should have a
significant shareholding in the Company. Under the current Remuneration Policy, the Committee requires Executive Directors
to build a holding of shares equivalent in value to 200 per cent of base salary.
Under the current Remuneration Policy, the Executive Directors are required to retain the lower of the respective in-role
shareholding guideline and the accrual shareholding immediately prior to departure for a period of two years.
The table below sets out the minimum shareholding requirements and the actual shareholdings for the individuals.
The percentages are a function of base salary, shareholdings and share incentives at 31 December 2024.
Beneficially owned shares (31 December 2024)
After tax value of Deferred Bonus award
Note
1. For the purpose of this table, the interests have been valued using the closing share price on the last dealing day in December 2024 of 177.0 pence
per share. Details of outstanding share incentive awards are set out earlier.
Paula Bell
Eric Updyke
0 50 100 150 200 250 300 350 400
Percentage
37%
35%274%
250%
309%
287%
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Statement of implementation of Remuneration Policy in 2025 (unaudited)
Information on how the Company intends to implement the Executive Directors’ Remuneration Policy in 2025 is set out below.
Base salary
2025 2024
Per cent
change
Paula Bell £421,802 £403,639 4.5
Eric Updyke
1
£739,860 £708,000 4.5
Note
1. The figures shown represent the annual base salaries for Eric Updyke at an exchange rate of $1.278:£1.
Benefits
• Life insurance cover of four times annual base salary
• Permanent health insurance
• Private healthcare cover for executive and family
• Car allowance
Retirement benefits
In line with the wider workforce where the Director provides services, Eric Updyke is eligible to participate in the Spirent
Communications, Inc 401(k) programme with a 4 per cent Company match of his own contributions, subject to any applicable
IRS cap. Mr Updyke is also eligible to participate in the US Deferred Compensation Plan, which has a 4 per cent Company
match of the participant’s contributions which are not made to the participant’s 401(k) account due to restrictions imposed
by the IRS.
Paula Bell will receive a taxable cash sum in lieu of pension at a rate of 14 per cent of base salary.
Annual Incentive
The Committee will set targets for 2025 in due course.
On-target and maximum Annual Incentive payments are normally as follows:
On-target
performance
per cent of
base salary
Maximum
performance
per cent of
base salary
Paula Bell 75 125
Eric Updyke 90 150
One-third of any incentive achieved through the Annual Incentive will be deferred into shares for an additional period of three
years. Details of these targets and their achievement will be disclosed in the Directors’ Annual Remuneration Report 2025,
if applicable.
Award under Spirent Long-Term Incentive Plan
It is anticipated that the following award will be made under the LTIP in 2025 in the form of an RSA:
Per cent of
base salary
Anticipated
value of award
Paula Bell 175 £738,154
Eric Updyke
1
200 £1,479,720
Note
1. The figure shown represents the annual base salary for Eric Updyke at an exchange rate of $1.278:£1.
The 2025 LTIP award to Executive Directors will be made as an RSA, with no performance criteria.
Awards made to Executive Directors under the Spirent Long-Term Incentive Plan are subject to a post-vesting holding period of
an additional two years.
Report on Directors’ remuneration continued
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Non-executive Director fees (audited)
The Board has reviewed the level of fees to be paid to Non-executive Directors from 1 January 2025, also taking into account
the wider employee base, to ensure alignment. To avoid any conflict of interest, the matter was considered by the Chairman and
Executive Directors in the absence of the Non-executive Directors affected.
Following due consideration, base fee increases were made in line with the wider employee population, whilst Committee Chair
and SID increases were above this, given that these roles had received no increase for several years, as follows:
2025 2024
Per cent
change
Non-executive Directors £61,600 £58,948 4.5
Audit Committee Chairman £13,000 £12,000 8.3
Remuneration Committee Chairman £12,000 £11,000 9.0
Senior Independent Non-executive Director
1
£11,000 £10,000 10.0
Note
1. The current Senior Independent Non-executive Director has chosen to continue to waive this additional fee for all periods.
The Remuneration Committee has reviewed the level of fees to be paid to the Non-executive Chairman from 1 January 2025.
To avoid any conflict of interest, the matter was considered by the Committee in the absence of the individual affected. After due
consideration, the following fee increase was made, in line with the wider employee population:
2025 2024
Per cent
change
Non-executive Chairman £246,306 £235,687 4.5
Share incentive interests vesting during 2025 (audited)
Deferred Bonus Plan: Restricted Stock (March 2025)
Both Ms Bell and Mr Updyke have awards of restricted stock under the DBP which are due to vest in March 2025 subject to an
EPS performance condition.
These awards are the result of the deferral of one-third of the value of the Annual Incentive achieved based on performance
in 2021. As such, no further performance conditions are applicable to the awards prior to vesting.
Long-Term Incentive Plan: Performance Shares (March 2025)
Both Ms Bell and Mr Updyke have awards of Performance Shares under the LTIP which are due to vest in March 2025, subject
to an EPS performance condition.
The EPS condition did not pass the growth threshold set at the outset. However, in light of the ongoing Keysight offer, the
Committee has used its discretion to fully vest the award, as described in the Chair’s introduction earlier.
No new shares were issued during the year, with all exercises of share incentives being satisfied by the transfer of shares held by
the Company’s Employee Share Ownership Trust (ESOT). At the date of this report, the ESOT holds 1.9 million Ordinary Shares
for the purpose of satisfying the exercises of current and future awards by employees and former employees of the Group.
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Remuneration Committee
Members
During the year and at the date of this report, Committee members were:
• Gary Bullard (Committee Chairman);
• Maggie Buggie;
• Wendy Koh;
• Edgar Masri; and
• Jonathan Silver.
Responsibilities
The Remuneration Committee is responsible to the Board for determining:
• Remuneration Policy for the Executive Directors and Chairman, taking into account remuneration trends across the Company;
• specific terms and conditions of employment of each individual Executive Director;
• overall policy for remuneration for the Executive Directors’ direct reports;
• design and monitoring of the operation of any Company share incentive plans;
• setting stretching incentive targets to encourage enhanced performance;
• an approach that rewards fairly and responsibly contribution to the Company’s long-term success; and
• other provisions of the Executive Directors’ service agreements, ensuring that contractual terms on termination and payments
made are fair to the individual and the Company and that failure is not rewarded and loss is mitigated.
The Committee’s remit is set out in detail in its terms of reference, which are reviewed and approved by the Board annually.
The Committee’s terms of reference are available on the Company’s website at corporate.spirent.com.
Composition of the Committee
At the date of this Report, the Remuneration Committee comprises five independent Non-executive Directors, one of whom
acts as Committee Chairman. The Company Secretary serves as Secretary to the Committee. All members are considered
independent within the meaning of the 2018 UK Corporate Governance Code.
Advisers to the Committee
During the period under review the Committee consulted with the Company’s Chairman, CEO, CFO and Company Secretary
& General Counsel but not on matters relating to their own remuneration.
Following a formal tender Aon was appointed by the Committee in August 2018 to undertake a market review of executive
remuneration practices and assist with the design and introduction of an updated Remuneration Policy that was put to
shareholders at the 2019 Annual General Meeting. In July 2020, following a restructure at Aon, the lead adviser to the
Committee transferred to work at PwC. The Committee has retained PwC in this role because it values the robust data and
advice provided and the continuity of provision from the advisers involved. The Committee remains satisfied that PwC is
independent, thoughtful and challenging. PwC is a member of the Remuneration Consultants Group and complies with its
voluntary Code of Conduct in respect of the provision of remuneration consulting services, details of which can be found
at www.remunerationconsultantsgroup.com.
The fees paid to PwC to carry out work for the Remuneration Committee during the period under review totalled £80,000
(2023 £80,000) plus VAT. Fees are based on a fixed retainer for certain services and time and materials otherwise. During the
year, PwC provided other tax and advisory services to the Company. PwC did not have any other connection with the Directors
of the Company.
Kepler Associates Limited, which was acquired in June 2015 by Mercer Limited, was appointed by the Committee some years
ago to provide the results of TSR testing to determine the vesting of share incentives. The Committee has retained Mercer
Limited in this role because it values the robust data provided and continuity of advice from the consultants involved. The
Committee remains satisfied that Mercer Limited is independent, thoughtful and challenging. Mercer Limited is a member of the
Remuneration Consultants Group and complies with its voluntary Code of Conduct in respect of the provision of remuneration
consulting services, details of which can be found at www.remunerationconsultantsgroup.com, and has no other connection to
the Company. During the year Mercer did not provide any other services to the Company and did not have any other connection
with the Directors of the Company.
The fees paid to Mercer Limited to carry out work for the Remuneration Committee during the period under review totalled
£2,675 (2023 £2,700) and were based on time and materials.
Report on Directors’ remuneration continued
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Statement of shareholder voting
At the May 2024 AGM, the advisory vote regarding the Report on Directors’ Remuneration for the year to 31 December 2023,
was as follows:
Votes for
1
Per cent Votes against Per cent Votes cast Votes withheld
2
322,326,471 93.30
23,140,897
6.70 345,467,368 833,182
The most recent binding vote for the Company’s Remuneration Policy was also at the May 2024 AGM, as follows:
Votes for
1
Per cent Votes against Per cent Votes cast Votes withheld
2
194,438,134
56.81
147,826,608 43.19 342,264,742 4,035,808
Notes
1. The “For” vote includes those giving the Company Chairman discretion.
2. A vote withheld is not a vote in law and is not counted in the calculation of the votes “For” and “Against” the resolution.
Votes “For” and “Against” are expressed as a percentage of total votes cast.
As announced immediately following the May 2024 AGM: ‘We are grateful to the 56.81 per cent of shareholders who voted in
favour of resolution 3 to approve our new Directors’ Remuneration Policy, and to the 59.06 per cent of shareholders who voted
in favour of resolution 14 to approve the adoption of the Spirent plc Long-Term Incentive Plan 2024. However, the Board notes
the significant level of dissent in respect of these resolutions.
The Committee consulted extensively with shareholders prior to proposing the new Policy and many of the shareholders to
whom we spoke understood the rationale for the proposed change. We were disappointed that, despite several conversations,
ISS’s recommendations appeared to be based almost exclusively on the location of our listing, with little account taken of where
we operate the competitive landscape in those markets. We are also aware that there has been significant change in our
shareholder base in recent weeks and therefore not all shareholders will have been involved in the full consultation which began
during 2023.
The Committee remains confident that the ability to use a hybrid long-term incentive is necessary for the Company in order to
align with market practice in the US, which represents the majority of Spirent’s operations and sales, and is the home location
of the majority of the Executive Committee, including our CEO. We have been clear that it does not currently intend to use the
additional headroom under the new Policy, nor the ability to use restricted share awards, for either of the two current Executive
Directors and would consult with shareholders if this position changes in the future. We will therefore continue to engage with
shareholders on this matter, in line with the above.
By Order of the Board
Gary Bullard
Chairman, Remuneration Committee
4 March 2025
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Directors’ Remuneration Policy (unaudited)
The Committee’s policy is to set remuneration levels which ensure that the Executive Directors are fairly and responsibly
rewarded in return for high levels of performance. The Remuneration Policy aims to promote value creation through transparent
alignment with the agreed corporate strategy, supporting performance and encouraging the underlying sustainable financial
health of the business while promoting sound risk management for the benefit of all stakeholders. The Committee believes that
the aims of the Policy are achieved by ensuring that a significant proportion of executive remuneration is tied to the achievement
of the agreed corporate strategy and long-term value creation. Whilst due consideration is given to wider employees as
part of the Policy review, there is no formal employee consultation, although conflicts of interest are avoided by extensive
shareholder consultation.
The Company’s current Remuneration Policy was subject to a binding vote at the 2024 AGM, only after an extensive
shareholder consultation.
Considerations of UK Corporate Governance Code principles
When determining the Remuneration Policy, the Committee was mindful of its obligations under the Corporate Governance
Code in order to ensure that the Policy and other remuneration practices were clear, simple, predictable, proportional and
aligned to the culture of the Company and accounted for reputational and other risks linked to excessive reward. Set out
below are examples of how the Committee addressed these factors:
Clarity
Remuneration arrangements should be transparent and promote
effective engagement with shareholders and the workforce.
The Committee consulted with its shareholders on the proposed changes
within the Policy and received positive feedback.
The Committee believes that the remuneration arrangements are transparent
and align to market and best practice.
Simplicity
Remuneration structures should avoid complexity and their
rationale and operation should be easy to understand.
The Committee is not proposing any significant structural changes to the
incentive plans. Spirent operates two incentive plans, which it believes are
easy to communicate and for stakeholders to understand and the structure
of which is aligned to market practice. The performance measures provide
a clear link to business performance and business strategy.
Risk
Remuneration arrangements should ensure reputational
and other risks from excessive rewards, and behavioural risks
that can arise from target-based incentive plans, are identified
and mitigated.
The Committee is mindful of mitigating risks in relation to excessive reward
through the application of discretion, as well as through malus and clawback
provisions in respect of incentive awards.
Predictability
The range of possible values of rewards to individual Directors
and any other limits or discretions should be identified and
explained at the time of approving the Policy.
The range of possible rewards for Executive Directors is considered and as
set out earlier.
The Committee has the ability to apply discretion in relation to the variable
pay elements of the awards, for new joiners and for leavers, which were
revisited as part of the review of the Remuneration Policy.
Proportionality
The link between individual awards, the delivery of strategy and
the long-term performance of the Company should be clear.
Outcomes should not reward poor performance.
The Committee strongly believes that the awards implemented
ensure continued delivery of the short and long-term goals and the
business strategy.
The Committee also has discretion to adjust incentive outcomes to ensure
that they reflect the Company’s performance over the relevant period.
Alignment to culture
Incentive schemes should drive behaviours consistent with
Company purpose, values and strategy.
The Committee believes that the incentive schemes detailed in the
Remuneration Policy are consistent with Company purpose, values
and strategy.
Report on Directors’ remuneration continued
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Policy table
This section of the Report describes the key components of each element of the remuneration arrangements for the Executive Directors.
Component and link to strategy Operation Maximum opportunity Framework to assess performance
Fixed remuneration
Base salary
To provide fixed remuneration
for each role which reflects the
size and scope of the Executive
Directors’ responsibilities, their
individual skills and experience,
and the market in which they
provide services.
Base salaries are normally
reviewed annually.
Set at levels to recruit and retain
the high-calibre talent needed
to deliver the Group’s strategy
without paying more than is
considered necessary.
Salaries are typically set after
considering various factors
including the salary levels in
companies of a similar size and
complexity, the responsibilities
of each individual role, internal
relativities, progression within
the role, individual performance
and an individual’s experience
and with regard to market salary
levels in the country in which the
executive provides services. Our
overall policy, having had due
regard to the factors noted, is
normally to target salaries at the
median market level.
While there is no defined
maximum salary, any increase
in salary will ordinarily be (in
percentage terms) in line with
those of the wider workforce,
having regard to the increases
in the country in which the
individual provides services.
Although the Company does
not ordinarily engage with the
workforce in implementing
such policy.
Increases beyond those
granted to the wider workforce
(in percentage terms) may
be awarded in certain
circumstances, for example
where there is a change in
responsibility, progression in the
role, experience or a significant
increase in the scale of the
role and/or size, value and/or
complexity of the Group.
Details of current salary levels
are set out in the Annual
Remuneration Report.
Not applicable.
Benefits
To provide market levels of benefits
on a cost-effective basis.
May include private health cover
for the Executive Director and
their family, life insurance cover,
permanent health insurance and
a car allowance.
Executive Directors may
participate in any all-employee
share plans which may be
operated by the Company on the
same terms as other employees.
Relocation support and any
associated costs or benefits may
also be provided if considered by
the Committee to be appropriate
and reasonable to meet the
requirements of the business.
Other benefits may be offered
from time to time, for example to
align with local market practice in
the country in which the Executive
Director provides services.
Reasonable business-related
expenses may be reimbursed
(including tax thereon, if deemed
to be a taxable benefit).
The overall value of benefits
will depend on the individual’s
circumstances and therefore
there is no formal maximum.
Participation in all-employee
share plans will be in line with
relevant statutory limits.
It is intended that the maximum
value of benefits offered will
remain broadly in line with
market practice in the country
in which the Executive Director
provides services.
Not applicable.
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Component and link to strategy Operation Maximum opportunity Framework to assess performance
Fixed remuneration continued
Retirement benefits
To provide cost-effective and
competitive post-retirement benefits.
Defined contribution scheme or
cash allowance in lieu of Company
pension contributions or a
combination of both.
Other post-retirement benefits
may be offered from time to time
broadly in line with local market
practice in the country in which the
Executive Director is employed.
The maximum Company
contribution is set at 14 per cent
of base salary (combined cash
supplement and/or defined
contribution plan).
For Executive Directors, the
retirement benefits are set in line
with the general rates applicable
to employees in the country in
which the Executive Director
is employed.
Pension arrangements for
current Executive Directors
are set out in the Annual
Remuneration Report.
Not applicable.
Variable remuneration
Annual Incentive
To reward and incentivise the
achievement of annual financial
and strategic goals which are
selected to align with the strategy
of the business and support
enhancement of shareholder value.
Two-thirds of any bonus earned
is payable in cash with the
remaining one-third normally
deferred into shares.
The deferred bonus shares
ordinarily vest after three years.
Dividend equivalents may be paid
on vested shares in respect of
dividends arising over the period
between the grant date and the
vesting date.
Both the cash and deferred share
elements of the annual bonus
are subject to clawback and
malus provisions.
Maximum opportunity is capped
at 150 per cent of base salary.
The Annual Incentive starts
accruing from threshold
levels of performance, which
results in 20 per cent of the
maximum payout.
Current maximum potential
for each Executive Director
is set out in the Annual
Remuneration Report.
Annual Incentives may be based
on a mix of financial, individual and
business objectives with at least
50 per cent of the weighting being
given to financial metrics.
The payment of any bonus is
at the absolute discretion of the
Committee and the Committee
may exercise its discretion to
override the formulaic outcome.
Policy table continued
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Component and link to strategy Operation Maximum opportunity Framework to assess performance
Hybrid Long-Term Incentive
To incentivise executives to
achieve the Company’s long-term
strategy and enhance sustainable
shareholder value.
Awards may be granted annually
as one or a combination of
Performance Share Awards (PSAs)
and Restricted Share Awards
(RSAs) in the form of conditional
shares or nil-cost options.
Awards will ordinarily vest, subject
to any performance conditions or
underpin, on the third anniversary
of grant and will ordinarily be
subject to an additional two-year
holding period post-vesting,
during which time awarded
shares may not ordinarily be
sold (other than to settle tax
liabilities incurred by the vesting
of the award).
Dividend equivalents may be
paid on vested shares in respect
of dividends arising over the
period between the grant date
and the vesting date (or, where
an award is structured as a
nil-cost option and subject to a
holding period, to the expiry of
the holding period or the date of
exercise (if earlier)).
Malus and clawback provisions
will apply to all awards made
under the Spirent Long-Term
Incentive Plan.
Executive Directors may be
granted annual LTIP awards
over a target number of
conditional shares or nil-cost
options with a value up to 200
per cent of salary.
The maximum number of
conditional shares or nil-cost
options that may vest under
an RSA is equal to the
target number.
The maximum number of
conditional shares or nil-cost
options that may vest under a
PSA is equal to two times the
target number.
The mix of the PSA and RSA
will be determined by the
Remuneration Committee
each year. The Remuneration
Committee will normally
consult with shareholders if it
intends to change the mix for
Executive Directors.
No more than 25 per cent of
the relevant part of a PSA will
vest for achieving threshold
performance, increasing to full
vesting for the achievement of
maximum performance. Details
of proposed award levels
will be set out in the Annual
Remuneration Report.
Award levels, performance
conditions and underpins are
reviewed before each award cycle
to ensure they remain appropriate.
PSAs are currently subject to
challenging earnings per share,
Total Shareholder Return and
ESG targets. However, different
measures may be applied for future
award cycles as appropriate to
reflect the business strategy.
RSAs will be subject to an underpin.
The majority of performance
conditions and underpins will
be weighted towards financial
metrics. A full description of the
performance conditions applicable
to any PSAs and the underpins
applying to any RSAs will be set out
in the Annual Remuneration Report.
The Remuneration Committee
has the discretion to override the
formulaic out-turn of PSAs and
RSAs if appropriate to do so to
take into account the underlying
financial and operational
performance of the Company.
Notes to the Policy table
Performance conditions applicable to the Annual Incentive
The Annual Incentive is designed to drive and reward excellent short-term financial and operational performance. The
Committee reviews the Annual Incentive Plan measures each year in order to ensure that they are aligned with the Group’s
strategy. The Committee may alter the choice and weighting of the metrics for future Annual Incentive cycles to reflect the
changing needs of the business. The Committee also retains the discretion to retrospectively amend the measures, weightings,
targets and/or method of assessment for the in-year Annual Incentive to take into account changes in the business strategy,
significant acquisitions or disposals, changes in accounting treatment or other exceptional events to ensure that the scheme
is able to fulfil its original purpose. The payment of any Annual Incentive is at the sole discretion of the Committee.
The choice of measures may change for future Annual Incentives but is currently based on:
• adjusted operating profit – a key driver of shareholder return and a key measure of business success;
• revenue – reflecting Spirent’s strategic priority of delivering top-line growth; and
• other strategic and operational priorities – these account for a minority of the Annual Incentive and ensure a rounded
assessment of performance.
Performance conditions applicable to awards under the Spirent Long-Term Incentive Plan (LTIP)
Performance Share Awards (PSA)
Hybrid Long-Term Incentive awards will be granted in accordance with the rules of the LTIP and the discretions contained
therein. The Committee reviews the appropriateness of performance parameters for each award under PSAs and will set
stretching performance conditions in light of the Company’s current and expected performance over the performance cycle.
The performance conditions for PSA awards to Executive Directors are (ordinarily) measured over a period of three years and
are set using a sliding scale of targets and no more than 25 per cent of the award (under each measure) will vest for achieving
the threshold performance hurdle. The choice of measures may change for future award cycles, but is currently based on:
• Relative Total Shareholder Return – generates a strong alignment of interest between executives and shareholders;
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Performance conditions applicable to awards under the Spirent Long-Term Incentive Plan (LTIP) continued
Performance Share Awards (PSA) continued
• Adjusted earnings per share – this provides an assessment of the profitability of the revenues delivered and aligns with the
interests of shareholders. Challenging targets for earnings per share are set based on internal and external forecasts; and
• ESG – ensures that executives are aligned with Spirent’s broader sustainability commitments.
The Committee would consult with shareholders in advance of a significant change in the choice or weighting of the
performance measures to be applied under the PSA grants for future award cycles. Under the rules of the LTIP, the Committee
has the discretion to amend or substitute the performance conditions for in-flight awards in exceptional circumstances,
providing the new targets are no less challenging than originally envisaged.
Restricted Share Awards (RSA)
Restricted Share Awards would be subject to an underpin which will be assessed by the Remuneration Committee.
Should a grant be made under the RSA, details would be disclosed in the relevant Directors’ Remuneration Report.
Malus and clawback
The rules of the LTIP and the Company’s Annual Incentive (including any element deferred into shares) include provisions for
malus and clawback to apply if the Committee concludes that:
• the relevant individual has committed misconduct;
• there has been a restatement of any member of the Group’s financial results, due to inaccurate or misleading data;
• the extent to which an award was granted or has vested was based on inaccuracy or error;
• the Group (or a business unit within the Group) suffered a material financial loss as a result of circumstances that could
reasonably have been risk managed;
• the Company has suffered an instance of corporate failure resulting in the appointment of a liquidator or administrator;
• a material failure of risk management and/or regulatory non-compliance resulting in damage to the Company’s business
or reputation; or
• any other circumstances that the Board considers to have a similar nature or effect.
Clawback may be applied for up to two years following cash payment of an Annual Incentive and vesting under the LTIP, and malus up
to three years following the granting of awards under the Company’s deferred bonus arrangements and unvested LTIP awards.
Shareholding requirements
The Executive Directors are required to build and maintain a shareholding in the Company and are expected to retain shares
vesting under the deferred annual bonus and LTIP (net of tax) until such time as the guideline shareholding has been achieved.
The current such requirement is 200 per cent of salary.
New Executive Directors are required to maintain a post-cessation share ownership requirement to hold the lower of the
respective in-role shareholding guideline and the actual shareholding immediately prior to departure for a period of two years.
The Company’s policy in respect of vested and unvested share awards post-cessation of employment is set out below in the
section on Exit Payment Policy.
Discretions retained by the Committee in operating the LTIP and other variable pay schemes
The Committee operates the Group’s various incentive plans according to their respective rules and (where applicable) in
accordance with relevant legislation and HMRC guidance. In order to ensure efficient administration of these plans, certain
operational discretions are reserved to the Committee. These include:
• determining who may participate in the plans;
• determining the timing of grants of awards and/or payments under the plans;
• determining the quantum of any awards and/or payments (within the limits set out in the Policy table above);
• in exceptional circumstances, determining that a share-based award (or any dividend equivalent) shall be settled (in full or in
part) in cash;
• determining any performance measures, targets and underpins applicable to an award (in accordance with the statements
made in the Policy table above);
• where a participant ceases to be employed by the Company, determining whether “good leaver” status shall apply;
• determining the extent of vesting of an award based on assessment of any performance conditions or underpins, including
discretion as to the basis on which performance is to be measured if an award vests in advance of the normal timetable
(on cessation of employment as a “good leaver” or on the occurrence of corporate events);
• whether, and to what extent, pro-ration shall apply in the event of cessation of employment as a “good leaver” or on the
occurrence of corporate events;
• whether malus and/or clawback shall be applied to any award and, if so, the extent to which they shall apply; and
Report on Directors’ remuneration continued
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• making appropriate adjustments to awards on account of certain events, such as major changes in the Company’s capital structure.
Approach to recruitment remuneration
In the event that the Company recruits a new Executive Director (either from within the organisation or externally), when
determining the appropriate remuneration arrangements, the Committee will take into consideration all relevant factors,
(including but not limited to quantum, the type of remuneration being offered and the jurisdiction from which the candidate was
recruited and in which they will provide services to the Company) to ensure that arrangements are in the best interests of both
shareholders and the Company without paying more than is necessary to recruit an executive of the required calibre.
Element Recruitment Policy
Base salary The Committee will take into consideration a number of factors, including internal relativities,
external market forces, skills and current level of pay.
Salary may (but need not necessarily) be set below the normal market rate, with a series
of planned increases implemented over the following few years to bring it to the desired
positioning, subject to individual performance.
Benefits Benefits provision would be in line with normal Policy.
The Committee may agree that the Company will meet appropriate relocation costs.
Retirement benefits In line with normal Policy.
Annual Incentive Eligible to take part in the Annual Incentive, with a maximum bonus of up to 150 per cent
of salary in line with Policy.
Depending on the timing of the appointment, the Committee may deem it appropriate to set
Annual Incentive performance metrics that are different from those that apply to the current
Executive Directors for the first performance year in which the appointment falls.
Hybrid Long-Term Incentive A normal award of conditional shares or nil-cost options with a target value up to 200 per cent
of salary, in line with Policy.
Buyout awards In exceptional circumstances, the Committee may offer additional cash or share incentive
awards (using Listing Rule 9.4.2, if necessary) to compensate an individual for remuneration
forfeited on leaving a previous employer.
The awards would not normally exceed what is felt to be a fair estimate of the remuneration
forfeited and would reflect (as far as possible) the nature and time horizons attached to that
remuneration and the impact of any performance conditions. The Company would normally
aim to replace any forfeited cash awards with shares.
Shareholders will be informed of any such payments at the time of appointment.
For an internal appointment, any remuneration terms awarded in respect of the previous role may either continue on its original
terms or be adjusted to reflect the new appointment.
When recruiting Non-executive Directors, the remuneration arrangements offered would normally be in line with those paid
to existing Non-executive Directors, details of which are set out in the Annual Remuneration Report.
Service contracts
Executive Directors
In normal circumstances, it is the Company’s policy that service contracts for Executive Directors have no fixed term and are
capable of termination on no more than 12 months’ notice from either the Company or the Executive Director. It is intended that
this Policy would also apply to new appointments of Executive Directors.
Eric Updyke currently has a service agreement with Spirent Communications, Inc, and, being a US resident, his contract is in line
with US employment practice and is governed by the laws of the state of New Jersey. Mr Updyke’s service agreement, dated
1 April 2019, may be terminated on 12 months’ notice from the Company and six months’ notice from Mr Updyke.
Paula Bell currently has a service agreement with Spirent Communications plc, and, being a UK resident, her contract is in line with
UK employment practice and is governed by the laws of England and Wales. Ms Bell’s service agreement, dated 12 April 2016,
may be terminated on 12 months’ notice from the Company and six months’ notice from Ms Bell.
The Company recognises that its Executive Directors may, from time to time, be invited to become non-executive directors of
other companies and that such appointments can broaden their knowledge and experience, to the benefit of the Company.
Details of any such appointments are set out in the Annual Remuneration Report.
The service agreements of Executive Directors are available for inspection at the Company’s registered office on request and will
be available for inspection at all General Meetings of the Company.
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Service contracts continued
Exit Payment Policy
The Committee is committed to ensuring that it does not pay more than is necessary when Executive Directors leave Spirent and
its policy on exit payments is and will continue to be in line with market practice in the country in which the Executive Director
provides services. The current Exit Payment Policy is:
• service contracts contain provisions for the removal of the Executive Director without compensation for not performing their
duties to the standard required by the Board or material misconduct;
• payment in lieu of notice may be paid under service contracts if the relevant notice period is not given to the Executive Director
or if, having received notice from the Executive Director, the employer does not wish them to serve it. Any payment in lieu of
notice shall ordinarily be paid in monthly instalments, in respect of annual base salary and pension contributions only;
• unless provided for in the service contract, the Company would seek to apply practical mitigation measures to any payment
of compensation on termination, for example by reducing payments to reflect payments received in respect of alternative
employment, taking into account all relevant circumstances;
• service contracts do not contain provision for additional compensation on termination following a change of control
(as detailed in the Change of Control provisions set out in the Directors’ Report);
• service contracts do not contain provision for liquidated damages of any kind; and
• service contracts contain appropriate provisions to protect the legitimate interests of the Company with respect to preventing
any terminated Executive Director from working in a business which competes against the Company.
Element Termination Policy
Salary, benefits
and pension
Payment will be made up to the termination date in line with relevant contractual notice periods and will
not exceed contractual entitlements.
Annual Incentive Unless otherwise provided in the service contract to be consistent with market practice in the country
in which the Executive Director provides services, Executive Directors are not entitled to accrued cash
incentives payable following termination unless the individual is determined by the Committee to be
a good leaver (defined as an individual leaving employment due to redundancy, ill health, injury or
disability, retirement, death, the individual’s employing company ceasing to be under the control of the
Group, or a transfer of the undertaking in which the individual works (“Good Leaver”)).
Deferred Share
Bonus Plan
Awards will ordinarily continue to vest on the normal vesting date, unless the Committee determines that
early vesting should apply. The Committee reserves the discretion to scale the awards down (including to
nil) in the event of misconduct by the individual or to reflect individual performance.
Long-Term
Incentive Plan
Unvested awards will generally lapse at the time of exit.
For individuals determined by the Committee to be a Good Leaver (see below), the Committee will
ordinarily assess any performance conditions at the end of the applicable performance period and
unvested awards will ordinarily vest on the normal timetable.
Exceptionally, and always in the case of death, the Committee may assess any performance conditions
and underpins at the point of cessation by testing the performance conditions and underpins up to (or
as close as reasonably practicable to) the date of cessation. Awards will then vest following such early
assessment of performance.
Except in the case of death, any shares which vest would normally be pro-rated to reflect the proportion
of the vesting period actually served by the individual.
For the purposes of the LTIP, a Good Leaver is any individual who leaves due to death, ill health, injury,
disability, agreed retirement, redundancy, a transfer of the business for which the individual works
out of the Group or for any other reason at the Committee’s discretion (except where the individual is
summarily dismissed).
Any post-vesting holding period would normally continue to apply to a leaver’s vested and
unvested awards.
Legacy
arrangements:
Employee Incentive
Plan (EIP)
Unvested awards generally lapse at the time of exit. For individuals determined by the Committee to
be a Good Leaver, performance conditions are assessed by the Committee at the point of exit by testing
the performance conditions up to the date of exit for TSR performance and to the end of the most recent
financial period for EPS performance. Vesting is then pro-rated for the proportion of the performance
period actually served and the individual has 12 months following the date of termination of employment
in which to exercise them.
Report on Directors’ remuneration continued
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For all leavers, the Committee may also determine to make a payment in reimbursement of a reasonable level of outplacement
and legal fees in connection with a settlement agreement. The Company may pay any statutory entitlements, to which an
Executive Director is entitled, or settle or compromise any claims made in connection with the termination of employment or
appointment of an Executive Director where the Committee considers such claims to have a reasonable prospect of success
and that it is in the best interests of the Company to do so. Where appropriate, private health cover may continue for a suitable
period post-cessation of employment.
The Committee has now introduced a formal Policy in respect of post-cessation shareholdings for new Executive Directors.
Following the approval of this Policy and in respect of the incentive awards granted to newly appointed Executive Directors
thereafter, the following will ordinarily apply:
• unvested shares under the Deferred Bonus Plan will continue to vest on the normal vesting date (i.e. up to four
years post-cessation);
• unvested shares under the LTIP will, subject to the participant being a Good Leaver, continue to vest on the normal vesting
date and be subject to a post-vesting holding period;
• be subject to a post-vesting holding period;
• vested shares under the LTIP will remain subject to the holding period; and
• other beneficially owned shares may be sold as long as the individual continues to maintain a shareholding at least equal
to the minimum shareholding guidelines which applied during their employment.
Current Executive Directors will also be subject to this Policy, with the exception of its application to other beneficially owned
shares, over which there will be no sale restrictions.
The above will ensure that the Executive Directors continue to have an interest in the Company after having left employment,
promoting a culture of sustainable long-term performance. Furthermore, additional safeguards are in place through the malus
and clawback provisions which can continue to be invoked irrespective of employment status.
In the event of change in control of the Company, in accordance with rules of the respective plans, any outstanding share
awards will ordinarily vest on the date of such an event. For awards under the LTIP, vesting will be subject to an assessment of
achievement against any applicable performance conditions and, unless the Board determines otherwise, a reduction to reflect
the curtailed vesting period.
Non-executive Directors Policy
Our policy is to set fees that are competitive with companies of an equivalent size and complexity. Fees are reviewed annually,
with no Non-executive Director voting on their own remuneration. All Non-executive Directors have a letter of appointment with
the Company for a period of not more than three years, subject to the Company’s Articles of Association. However, since 2011
and in accordance with the Code, all Directors who are not stepping down from the Board automatically stand for re-election
at each AGM.
The letters of appointment of Non-executive Directors are available for inspection on request and will be available for inspection
at all General Meetings of the Company. An example of a letter of appointment for a Non-executive Director is available on the
Company’s website at corporate.spirent.com. Details of the remuneration for Non-executive Directors are set out in the Annual
Report on Remuneration.
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Consideration of employee remuneration arrangements elsewhere in the Group
When setting the Policy for Directors’ remuneration, the Committee has regard to the pay and employment conditions
elsewhere within the Group, particularly in the jurisdictions in which the Executive Directors provide services. The Committee
is kept informed on a regular basis of salary increases for the general employee population and takes these into account when
determining salary increases for Executive Directors and the executive management team.
Where relevant, the Committee seeks to align the Remuneration Policy for Executive Directors with that for other senior
managers. Selected employees are able to share in the success of the Group through participation in the Management
Incentive Plan.
Executive Directors, other members of the executive management team and key employees are also eligible for participation
in the Long-Term Incentive Plan.
The Committee is aware of the 2018 UK Corporate Governance Code and its requirements for increasing engagement with
stakeholders including employees and details of the workforce engagement programme can be found in the Stakeholder
Engagement section of this Annual Report.
Consideration of the views of shareholders in setting Remuneration Policy
The Committee is mindful of the views of shareholders in determining appropriate levels of remuneration and in ensuring
that shareholder and Director interests are aligned. The Committee is committed to an ongoing dialogue with shareholders
and seeks shareholder views when any significant changes are proposed to remuneration arrangements. Over the past few
years, the Committee consulted with major shareholders and shareholder representatives, including over the development
of this policy.
Legacy matters
For the avoidance of doubt, in approving this Remuneration Policy, authority is given to the Company to make payments
and honour any commitments entered into with current or former Directors (such as the payment of pension or the unwinding
of legacy share schemes) where the terms were agreed either prior to 24 April 2014 (the effective date of the first Directors’
Remuneration Policy) or at a time when a previous Remuneration Policy was in force, or at a time when the relevant individual
was not a Director of the Company and, in the opinion of the Committee, the payment was not in consideration for the individual
becoming a Director. Details of any payments will be set out in the Annual Remuneration Report as they arise.
Dilution
The Committee is strongly committed to continuing to manage shareholder dilution in a responsible manner. Details of the
Company’s dilution are set out in the Annual Remuneration Report.
Report on Directors’ remuneration continued
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The Directors’ Report for the year ended 31 December 2024 comprises pages 109 to 112 of this Annual Report, together with
the sections of the Annual Report incorporated by reference. The Corporate Governance Report sections set out on pages 62 to
113 is incorporated by reference into this Directors’ Report and, accordingly, should be read as part of this Directors’ Report. As
permitted by legislation, some of the matters required to be included in the Directors’ Report have instead been included in the
Strategic Report on pages 1 to 61, as the Board considers them to be of strategic importance.
Specifically, these are:
• the Strategic Report, which provides detailed information relating to the Group, its business model and strategy, operation
of its businesses, future developments and the results and financial position for the year ended 31 December 2024;
• future business developments (throughout the Strategic Report);
• details of the Group’s policy on addressing the principal risks and uncertainties facing the Group, which are set out in the
Strategic Report;
• information on the Group’s greenhouse gas (GHG) emissions for the year ended 31 December 2024, along with our report
on the Task Force on Climate-related Financial Disclosures (TCFD);
• how we have engaged with our workforce and stakeholders as set out in the Section 172 Statement;
• business relationships (throughout the Strategic Report); and
• the Section 172 Statement.
The Strategic Report and the Directors’ Report together form the Management Report for the purposes of the Disclosure
Guidance and Transparency Rules (DTR) 4.1.8R.
Disclosures required under UKLR 6.6.4
The information required to be disclosed in accordance with UKLR 6.6.4 of the Financial Conduct Authority’s Listing Rules in
respect of Long-Term Incentive Plans, can be located on pages 83 to 108 of this Annual Report.
Research and development
The Company has chosen, in accordance with the Companies Act 2006 Section 414C(II), to include the disclosure of research
and development in the Strategic Report.
Results and dividends
Due to the ongoing Keysight offer no interim dividend was paid during the year and the Directors are not recommending
a final dividend.
Directors
Biographies of the Directors currently serving on the Board are set out in the Board of Directors section.
As set out in the Notice of Meeting, all Directors will retire at the upcoming AGM and submit themselves for election or
re-election by shareholders. All Directors have been subject to a formal and rigorous performance evaluation during the
period under review, further details of which can be found in the Directors’ Statement on Corporate Governance.
The powers of Directors are described in the Company’s Articles of Association, which can be found on the Company’s website
at corporate.spirent.com.
Dates of appointment under the Executive Directors’ service contracts and Non-executive Directors’ letters of appointment are
set out in the Report on Directors’ Remuneration, along with the interests of the Directors in the shares of the Company.
The Board has a documented process in place in response to conflicts, details of which are set out in the Directors’ Statement
on Corporate Governance.
Insurance and indemnities
In accordance with its Articles of Association, the Company has granted a qualifying third party indemnity, to the extent
permitted by law, to each Director. The Company also maintains Directors’ and officers’ liability insurance.
These provisions are qualifying third party indemnity provisions as defined in Section 234 of the Companies Act 2006. Neither
the Company’s indemnity nor the insurance provides cover in the event that a Director is proven to have acted dishonestly
or fraudulently.
Stakeholder engagement
Information on how the Directors have had regard to the need to foster the Company’s business relationships with suppliers,
customers and other stakeholders, and the effect of that regard, is contained in the Stakeholder Engagement section.
Directors’ report
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Employees
The average number of employees within the Group is shown in the notes to the Group’s consolidated financial statements.
At Spirent, we know that having a diverse and inclusive workforce is essential if we are to deliver on our mission to be the global
leader and trusted partner for innovative technology test and assurance solutions. Diverse and inclusive teams are critical to fuel
our innovation and genuinely connect with the communities in which we live and work. We embrace a culture where difference
is valued and openness, mutual respect, collaboration and fairness are fundamental. Spirent does not tolerate discrimination
or offensive behaviour of any kind. We are committed to creating workplaces that genuinely reflect the diversity of the world
we serve and provide an environment where everyone feels empowered to bring their full, authentic self to work.
We strive to enable:
• workforce representation that reflects the talent market;
• equitable reward and advancement; and
• a culture of trust, fairness and respect.
We are committed to doing as much as we possibly can in this regard and have previously completed a detailed review of
our diversity and inclusion practices to inform and set clear priorities and objectives. You will also find more information on the
actions we are taking in our Sustainability Report, available at corporate.spirent.com.
Change of control provisions
The Co-operation Agreement entered into between the Company and Keysight Technologies, Inc relating to the takeover
offer for the entire issued and to be issued share capital of the Company includes provisions which apply in connection with the
implementation of the acquisition in respect of the Company’s share plans and certain employee-related matters. The Company
does not otherwise have any agreements with any Director or employee that would provide compensation for loss of office or
employment resulting from a takeover.
The Company is not aware of any significant agreements to which it is party that take effect, alter or terminate upon a change
of control of the Company following a takeover.
Share capital
The Company has a single class of share which is divided into Ordinary Shares of 3 & 1/3 pence each. Each Ordinary Share
carries one vote and all of the Ordinary Shares rank pari passu. There are no special control rights relating to any of the
Ordinary Shares. At the date of this report, 578,646,363 Ordinary Shares of 3 & 1/3 pence each had been issued which are
fully paid up and are listed on the London Stock Exchange. The Company also operates a Level 1 American Depositary Receipt
(ADR) programme with each ADR representing four Ordinary Shares. The ADRs trade on the US over-the-counter market and
BNY Mellon is the authorised depositary bank for the programme. Further details on share capital are set out in the notes to
the consolidated financial statements and the notes to the parent Company financial statements. The rights, including those
relating to voting, obligations and any restrictions on transfer relating to the Company’s Ordinary Shares, as well as the powers
of the Company’s Directors, are set out in the Company’s Articles of Association, a copy of which can be found on our website
at corporate.spirent.com or can be obtained from Companies House or by writing to the Company Secretary.
The Company’s Articles of Association may only be amended by a special resolution at a general meeting of shareholders.
The most recent changes to the Articles of Association were approved at the AGM in 2021.
The Company has established two employee benefit trusts in connection with the operation of the Company’s share incentive
plans: the Spirent Employee Share Ownership Trust (ESOT) and the Spirent Sharesave Trust (SST). The Trustees of both trusts
have waived their right to receive dividends on any Ordinary Shares held by them except for a nominal amount of 1 pence other
than for those Ordinary Shares held in the ESOT which are the beneficial property of an employee/shareholder.
For further details on the employee benefit trusts see “Investment in own Ordinary Shares” in the notes to the consolidated
financial statements and the notes to the parent Company financial statements. The Trustees of both trusts do not vote
their Ordinary Shares, except for those Ordinary Shares held in the ESOT that are the beneficial property of an employee/
shareholder, which the Trustees will vote in accordance with the instructions received from the beneficial owner.
Restrictions on share transfers
There are no restrictions on the transfer of Ordinary Shares in the capital of the Company other than certain restrictions which
may from time to time be imposed by law, for example insider trading law or as required under the Company’s Remuneration
Policy for Executive Directors. In accordance with the Market Abuse Regulation, certain employees are required to seek the
approval of the Company prior to dealing in its securities.
The Company is not aware of any agreements between shareholders that may result in restrictions on the transfer of securities
or on voting rights. The Company is also not aware of any contract of significance between itself or any subsidiary undertaking
and a controlling shareholder.
Powers for issue of new shares
During the year to 31 December 2024 and to the date of this report, no new Ordinary Shares have been allotted as a result of
the exercise of options and rights pursuant to the Company’s share incentive plans.
Directors’ report continued
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At each AGM the Directors normally seek authority to allot shares for cash and to disapply pre-emption rights within normally
prescribed limits. Accordingly, at the upcoming AGM authority will be sought to allot new Ordinary Shares up to a nominal value
of approximately 33.3 per cent of the Company’s issued share capital.
Return of capital
No returns of capital were made during the year to 31 December 2024. During the prior year, the Company completed an
authorised share buyback programme of £56 million in August 2023, following the purchase and cancellation of 33,095,525
Ordinary Shares.
The Company will routinely seek renewal of the authority to repurchase up to 9.99 per cent of its issued Ordinary Shares, within
certain limits, as permitted by the Company’s Articles of Association, such authority typically remaining valid for a maximum of
15 months following each AGM.
Substantial shareholdings
In accordance with Listing Rule 9.8.6(2), the Company has been notified of the following significant interests in its Ordinary
Shares, pursuant to Disclosure Guidance and Transparency Rule 5, including interests notified up to the date of this report, with
the percentage of voting rights being calculated at the time each relevant disclosure was made:
Total holding
Per cent of Company’s
total voting rights
Barclays PLC 87,147,236 15.06%
The Goldman Sachs Group, Inc. 70,699,563 12.21%
Morgan Stanley & Co. International plc 37,962,923 6.56%
Aviva plc 34,126,371 5.90%
JPMorgan Asset Management Holdings Inc 33,405,287 5.77%
Standard Life Investments Ltd 32,370,026 5.59%
Brandes Investment Partners LP (various clients) 30,537,440 5.28%
AXA Investment Managers SA 30,515,747 5.27%
Prudential plc 30,472,411 5.27%
Aberforth Partners 30,368,910 5.25%
BlackRock, Inc 30,107,975 5.20%
Neptune Investment Management Limited 29,775,214 5.15%
Pentwater Capital Management LP 29,730,000 5.14%
Artemis Investment Management Limited 29,195,146 5.05%
Qube Research & Technologies Limited 28,863,735 4.99%
Martin Currie Investment Management Limited aka Franklin Templeton
Fund Management Limited 28,701,012 4.96%
Ameriprise Financial, Inc 27,083,673 4.68%
Schroders plc 26,986,598 4.66%
PrimeStone Capital LLP 26,434,581 4.57%
Teleios Capital Partners LLC 24,639,977 4.26%
Sun Life Assurance Company of Canada (UK) Ltd 23,382,347 4.04%
Kames Capital (fka Global AEGON Asset Management Group) 18,507,514 3.20%
Norges Bank 18,068,435 3.12%
Political donations
In accordance with the Group’s Business Ethics Policy, no political donations were made during the year (2023 nil).
Going concern
After making appropriate enquiries and taking into account the matters set out in the Principal Risks and Uncertainties section of this
Annual Report, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence
for the foreseeable future. For this reason, they continue to adopt the going concern basis when preparing the financial statements.
As noted earlier, in March 2024, the Boards of Keysight and Spirent announced that they had reached agreement on the terms
of a recommended cash offer for the entire issued ordinary share capital of Spirent.
As a consequence of the above ongoing transaction, two scenarios have been provided on the viability of the Group:
• no acquisition by Keysight assumes the deal does not complete and that there is no divestment of the HSE business (note that
due to the backstop agreement in place, the Board does not consider this scenario likely); and
• completion of the acquisition by Keysight.
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Viability Statement
In accordance with provision 31 of the 2018 UK Corporate
Governance Code, the Directors have assessed the viability
of the Group and concluded whether they have a reasonable
expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due over the
period of assessment.
Under the unlikely scenario that there is no acquisition by
Keysight, the Board has concluded that the most appropriate
period for this assessment should be three years, which is
consistent with the period used in other forward-looking areas
of the financial statements.
This period was selected for the following reasons:
• the Group’s strategic planning cycle covers a three-year period;
• the Board reviews a three-year financial corporate plan;
• it reflects the period over which the principal risks would be
realised; and
• when considering a major investment in product development,
three years is considered by the Board to be a reasonable time
horizon in which the product should achieve meaningful sales.
The Board’s assessment has been made with reference to the
Group’s current financial position and prospects, the Group’s
long-term strategy, the Board’s risk appetite and the Group’s
principal risks and uncertainties as set out within that section
of this Annual Report.
The plans and cash flow projections used as the basis for the
assessment were the three-year strategic plan. They were
drawn up on the basis that the Group ends 2024 with a cash
balance of $141.8 million and maintains a cash balance
sufficient to fund normal operations, and that there will be
no material changes to the business structure throughout the
review period.
The Board has reviewed plausible and severe stress
tests based on the occurrence of a combination of the
principal risks to which the Group is exposed, considering
the potential impact of these risks on the business model,
future performance, solvency and liquidity over the period.
The analysis also included a reverse stress test scenario to
illustrate the revenue reduction in the 12 months following
approval of the financial statements that would lead to the
Group ceasing to be a going concern. Further detail on the
scenarios modelled and the principal risks considered is
disclosed within the Principal Risks and Uncertainties section.
In each of the scenarios over the three-year period, the Group
was able to continue operating and generating free cash flow.
The reverse stress test required such an extreme reduction in
revenue that the likelihood of occurrence is considered to be
remote and therefore does not represent a realistic threat to the
viability of the Group. In reaching this conclusion the Directors
considered the three-year plan, the uncertainties arising from
the macroeconomic backdrop and inflationary pressures,
the magnitude of the revenue reduction and the ability of the
Group to take realistic and successful mitigating actions, which
are not factored into the reverse stress test scenario.
On the assumption that the acquisition of Spirent completes
during the going concern period, which is highly likely based
on the backstop agreement that is in place, noting the analysis
above regarding the Group’s forward orderbook and stable
nature of the business, the following has also been considered:
• Spirent Group will become a 100 per cent owned
subsidiary of Keysight.
• As of 31 October 2023, Keysight had $2,472 million of cash
and cash equivalent reported on its balance sheet with
$500 million of unsecured loan notes that extend beyond
the long-term viability assessment period.
• In the Section 2.7 filing Keysight confirmed that, “With similar
cultures valuing customer-centricity and high-performance,
we believe that Keysight will be an excellent home for
Spirent to thrive and deliver sustainable, long-term
growth. Our superior offer recognises the value of Spirent’s
achievements to date and the exciting prospects of the
combination of our complementary product portfolios to
provide end-to-end solutions for customers across their
lifecycle needs”. This confirms that Keysight’s intentions are
to continue to support Spirent products and customers.
Based on this assessment and the expected successful impact of
mitigating actions, the Directors have a reasonable expectation
that in the unlikely event that the acquisition by Keysight does not
complete, the Group will be able to continue in operation and
meet its liabilities as they fall due over the three-year period.
Disclosure of information to auditor
Each of the Directors of the Company at the date of this
Report confirms that:
• so far as the Director is aware, there is no information needed
by the Company’s auditor in connection with preparing its
report of which the Company’s auditor is unaware; and
• he/she has taken all the steps that he/she ought to have
taken as a Director in order to make himself/herself aware
of any information needed by the Company’s auditor in
connection with preparing its report and to establish that
the Company’s auditor is aware of that information.
Independent External Auditor
As described in more detail in the Audit Committee Report, an
audit tender process was completed during 2020, following
which, at the AGM in April 2021, shareholders approved the
appointment of Deloitte as auditor.
Having carried out a review of auditor effectiveness, the
Audit Committee has recommended to the Board the
re-appointment of Deloitte LLP, which has also indicated
its willingness to continue as auditor. Accordingly, this
re-appointment will be proposed at the upcoming AGM,
with the Audit Committee responsible for determining the
audit fee on behalf of the Board.
Annual General Meeting (AGM)
The Company’s next AGM will be held in London in June 2025.
Full details will be set out in the AGM Notice.
By Order of the Board
Angus Iveson
Company Secretary
4 March 2025
Spirent Communications plc
Company number 470893
Directors’ report continued
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Directors’ responsibilities statement
The Directors are responsible for preparing the Annual Report,
the Report on Directors’ Remuneration, the consolidated
financial statements of the Group and the financial statements
of the parent Company in accordance with applicable United
Kingdom law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law they have
elected to prepare the consolidated financial statements of
the Group in accordance with the United Kingdom-adopted
International Accounting Standards. The Directors have
elected to prepare the parent Company financial statements
in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards
and applicable law) including FRS 101 “Reduced Disclosure
Framework”. Under company law the Directors must not approve
the financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Company and
of the profit or loss of the Company for that period.
The consolidated financial statements of the Group are
required by law and International Accounting Standards
to present fairly for each financial period the financial
position and performance of the Group; the Companies
Act 2006 provides, in relation to such financial statements,
that references in the relevant part of that Act to financial
statements giving a true and fair view are references to their
achieving a fair presentation.
Under the Financial Conduct Authority’s Disclosure Guidance
and Transparency Rules, consolidated financial statements
are required to be prepared in accordance with UK-adopted
International Accounting Standards.
In preparing each of the consolidated financial statements
of the Group and parent Company financial statements, the
Directors are required to:
• select suitable accounting policies in accordance with IAS 8
“Accounting Policies, Changes in Accounting Estimates and
Errors” and apply them consistently;
• make judgements and estimates that are reasonable
and prudent;
• in respect of the consolidated financial statements of the
Group, state whether international accounting standards in
conformity with the requirements of the Companies Act 2006
and UK-adopted International Accounting Standards have
been followed, subject to any material departures disclosed
and explained in the consolidated financial statements;
• in respect of the parent Company financial statements,
state whether applicable UK Accounting Standards,
including FRS 101, have been followed, subject to any
material departures disclosed and explained in the parent
Company financial statements;
• prepare the financial statements on a going concern basis
unless it is inappropriate to presume the Group and the
parent Company will continue in operational business for
the foreseeable future;
• properly select and apply accounting policies;
• present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
• provide additional disclosures when compliance with the
specific requirements in International Accounting Standards,
and in respect of the parent Company financial statements,
FRS 101, is insufficient to enable users to understand
the impact of particular transactions, other events and
conditions on the Group and parent Company financial
position and financial performance; and
• make an assessment of the Company’s ability to continue
as a going concern.
The Directors confirm that they have complied with the above
requirements in preparing the financial statements.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
and Group’s transactions and disclose with reasonable accuracy
at any time the financial position of the Group and the parent
Company and enable them to ensure that parent Company
and Group financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets
of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, a Directors’
Report, a Directors’ Remuneration Report and a Statement on
Corporate Governance that comply with the law and those
regulations. They are also responsible for the maintenance
and integrity of the corporate and financial information
included on the Company’s website at corporate.spirent.com.
Legislation in the UK governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
This Annual Report complies with the Disclosure Guidance and
Transparency Rules (DTR) of the Financial Conduct Authority in
respect of the requirement to produce an annual financial report.
The Annual Report and consolidated financial statements are
the responsibility of, and have been approved by, the Directors.
Each of the Directors confirms that, to the best of their knowledge:
• the consolidated financial statements of the Group
and parent Company financial statements, prepared
in accordance with the applicable set of accounting
standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole;
• the Annual Report, including the Strategic Report, includes
a fair review of the development and performance of
the business and the position of the Company and the
undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and
uncertainties that they face; and
• the Annual Report and financial statements, taken as a
whole, are fair, balanced and understandable and provide
the information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy.
By Order of the Board
Paula Bell
Chief Financial & Operations Officer
4 March 2025
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Report on the audit of the financial statements
1. Opinion
In our opinion:
• the financial statements of Spirent Communications plc (the ‘parent Company’) and its subsidiaries (the ‘Group’) give a
true and fair view of the state of the Group’s and of the parent Company’s affairs as at 31 December 2024 and of the
Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with United Kingdom adopted international
accounting standards;
• the parent Company financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice, including Financial Reporting Standard 101 “Reduced Disclosure Framework”; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
• the consolidated income statement;
• the consolidated statement of comprehensive income;
• the consolidated and parent Company balance sheets;
• the consolidated and parent Company statements of changes in equity;
• the consolidated cash flow statement; and
• the related notes 1 to 34 of consolidated financial statements and notes 1 to 18 of the parent Company financial statements.
The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law
and United Kingdom adopted international accounting standards. The financial reporting framework that has been applied in
the preparation of the parent Company financial statements is applicable law and United Kingdom Accounting Standards,
including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial
statements section of our report.
We are independent of the Group and the parent Company in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to
listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The
non-audit services provided to the Group and parent Company for the year are disclosed in note 4 to the financial statements.
We confirm that we have not provided any non-audit services prohibited by the FRC’s Ethical Standard to the Group or the
parent Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independent auditor’s report to the members
of Spirent Communications plc
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3. Summary of our audit approach
Key audit matters The key audit matters that we identified in the current year were:
appropriateness of revenue recognition; and
classification of adjusting items.
Materiality The materiality that we used for the Group financial statements was $3.4 million which was
determined based on a number of metrics used by investors and other readers of the financial
statements, which included:
• adjusted profit before tax;
• profit before tax;
• net assets; and
• revenue.
Scoping We selected 12 components to perform testing of one or more account balances, classes of transaction
and disclosure.
These components contribute 92 per cent of revenue, 85 per cent of profit before tax and 97 per cent of
net assets.
Significant changes
in our approach
We have refined our risk relating to the classification of adjusting items to include the acquisition related
costs as a result of the proposed acquisition of Spirent Communications plc by Keysight Technologies, Inc.
as disclosed in the key audit matter.
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group’s and parent Company’s ability to continue to adopt the going concern
basis of accounting included:
• obtaining an understanding of management’s process in performing the going concern assessment;
• evaluating the cash-flow forecasts and the scenario analysis prepared by management and evaluating the Group’s ability
to operate without accessing external funding;
• evaluating the Directors’ assessment of the Group’s ability to continue as a going concern, including evaluating the underlying
data and key assumptions used to make the assessment, and evaluating the Directors’ plans for future actions. This included
evaluating the impact of the proposed acquisition of Spirent Communications plc by Keysight Technologies, Inc. We assessed
both scenarios set out by management in note 2; the acquisition completing or the Group continuing to trade on a stand-
alone basis;
• assessing the extent of available headroom and Management’s sensitivity analysis to cash flows including the impact of
macroeconomic conditions on the business, the recent downturn in the markets in which the Group operates and assessing
whether management’s forecasts were in line with the trading updates issued to the market;
• assessing the mathematical accuracy of the forecasts produced and the historical accuracy of managements forecasts;
• evaluating analyst reports, industry data and other external financial information to determine if it provided corroborative
evidence in relation to Management’s assumptions; and
• evaluating the Group’s disclosures on going concern against the requirements of IAS 1.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s and parent Company’s ability to continue as a going
concern for a period of at least twelve months from when the financial statements are authorised for issue.
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Report on the audit of the financial statements continued
4. Conclusions relating to going concern continued
In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
of this report.
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
5.1. Appropriateness of revenue recognition
Key audit matter
description
The Group has recognised revenue of $460.2 million in 2024 (2023 $474.3 million).
The Group’s principal activity is the sale of hardware, software, support and services for the testing and
assurance of networks. In general, the performance obligations align with the types of products sold with
hardware and software recognised at a point in time when the customer has obtained control of the
products sold, support recognised over the life of the support contract and services recognised over the
period in which the sale is performed or on a milestone basis. The Group also experiences significant
seasonality, predominantly due to the timing of the budgetary cycles of the Group’s principal customers
and markets, giving rise to cut-off risk.
Given the nature of the Group’s products and services there is judgement involved in the allocation of
revenue between the different performance obligations which impacts the timing of revenue recognition.
The timing of revenue recognition can also be complicated by management’s use of distributors or
intermediary selling agents in jurisdictions where the Group has no physical presence or are otherwise
required to use an intermediary third party. This extends the cut-off risk due to the necessity of assessing
whether the fulfilment of the Group’s performance obligations is determinant on delivery by the
intermediary to the end customer.
The transaction price in the contract is allocated across these performance obligations based on the
standalone selling prices identified by management. This identification of standalone selling prices
involves judgement and has a direct impact on the timing and amount of revenue recognised.
Where sales are only partially delivered, management judgement is required to be exercised in the
application of IFRS 15 Revenue Recognition as to whether the delivered elements qualify for recognition
prior to all contractual deliverables being shipped.
We assessed revenue recognition, in particular cut-off risk, as a potential risk of fraud as revenue is one
of the Key Performance Indicators for both external communications and management incentives.
Refer to page 79 (Audit Committee Report) and Notes 2 (Accounting Policies) and 3 (Operating Segments).
Independent auditor’s report to the members
of Spirent Communications plc continued
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How the scope of
our audit responded
to the key audit
matter
Gaining understanding of relevant controls
We obtained an understanding of relevant controls over management’s revenue recognition process.
We also obtained an understanding of relevant controls including those over key IT systems and tools
used in the revenue recognition process and financial reporting. This included both the applications and
infrastructure supporting these systems.
Evaluating key judgements in the revenue recognition process
In order to test the timing of revenue recognition, including for partial shipments, we tested all material
orders placed around the period end and a sample of the other orders to assess whether the activity
required for revenue recognition had occurred within the period under audit. This included:
• re-calculation of revenue based on orders listing and deferred revenue based upon the global data;
• testing management’s price list to confirm that standalone selling prices had been calculated based
upon reasonable and supportable methods and data; and
• evaluating material distributor arrangements to assess any indication of the distributor not acting as
a principal.
Specifically to address the risk of inappropriate revenue recognition due to cut-off, we have completed
the following procedures:
• obtaining shipping records for physical items and evaluating whether the dates of shipment and receipt
supported recognition of revenue in the appropriate period;
• assessing available evidence for the completion of service activities to support revenue recognition;
• considering the nature of the items delivered on partially completed orders and assessing whether the
performance obligations were sufficiently distinct to have independent value without the full order
having been delivered;
• obtaining third party purchase orders to evidence incoterms and evaluating third party shipping
records and customer confirmations to assess whether Spirent’s obligations have been fulfilled at the
point of recognising revenue; and
• assessing the shipping terms to third party agreements and obtaining third party shipping records to
assess whether the shipping terms have been fulfilled.
Key observations
Based on the work performed we concluded that the revenue recognition is appropriate.
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Report on the audit of the financial statements continued
5. Key audit matters continued
5.2. Classification of adjusting items
Key audit matter
description
In addition to the reported results, the Group continues to present adjusted profit measures which are
before the impact of adjusting items. Judgements made by management regarding the classification of
adjusting costs and income therefore have a significant impact on the presentation of the Group’s results.
In total, adjustments of $35.9 million have been made to the reported profit before tax of $13.8 million
to derive adjusted profit before tax of $49.7 million. We have refined our risk relating to the classification
of adjusting items to include the acquisition related costs as a result of the proposed acquisition of
Spirent Communications plc by Keysight Technologies, Inc. Adjusting items include:
• acquisition related transactions totalling to $26.3 million that include amortisation of acquired
intangibles and strategic evaluation costs; and
• share-based payment $9.6 million.
We identified a key audit matter in respect of the classification of items recorded as adjusting. While the
key measure used by management to monitor performance is adjusted operating profit, adjusted profit
before tax is also a key measure used in communication with shareholders. Judgement is exercised by
management in determining whether the classification of such items is in accordance with guidance
issued by the FRC and ESMA. There is a risk that costs or income may be classified as adjusting which
are underlying or recurring items, and therefore distort the reported adjusted profit, whether due to
manipulation or error. Consistency in the identification and presentation of the adjusted costs or income
is important for the comparability of year-on-year reporting.
Explanations of each adjustment are set out in note 5 to the Group financial statements, and also in note 2
to the Group financial statements in relation to the critical judgements involved in determining adjusting
items. Refer also to page 80 of the Audit Committee report.
How the scope of
our audit responded
to the key audit
matter
We obtained an understanding of the relevant controls over the classification of adjusting items in the
financial statements.
We evaluated the appropriateness of the inclusion of items, both individually and in aggregate, within
adjusted results, completing the following procedures:
• assessed the consistency of items included year-on-year, the content and application of management’s
accounting policy, challenging the nature of these items by reference to FRC and ESMA guidance, and
challenging in particular the inclusion of those items that recur annually;
• tested a sample of adjusting items by agreeing to source documentation and evaluating their nature in
order to assess whether they are disclosed in accordance with the Group’s accounting policy, and also
to assess consistency of adjusting items between periods in the Group financial statements;
• agreed the amounts recorded through to underlying financial records and other audit support to test
that the amounts disclosed were complete and accurate;
• focused our assessment on the appropriateness of costs classified as related to the acquisition within
adjusting items where this was subject to management judgement, and there was an increased risk of
fraud and error;
• considered the impact of adjusting items on Directors’ remuneration targets to determine if any
increased fraud risk factor existed based on actual results for the period; and
• assessed whether the disclosures within the Group financial statements provided sufficient detail for the
reader to understand the nature of these items and how adjusted results reconcile to statutory results.
Key observations
The value of adjusting items results in a material difference between the statutory and adjusted results.
Whilst we note that some adjusting items, such as share-based payments and acquired intangible asset
amortisation recur from period to period, their classification and presentation is consistent with the
Group’s policy and we consider that they are appropriately disclosed.
Independent auditor’s report to the members
of Spirent Communications plc continued
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6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the
scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements Parent Company financial statements
Materiality $3.4 million (2023 $3.4 million) $1.3 million (2023 $1.2 million)
Basis for determining
materiality
We considered the following metrics:
• Adjusted Profit Before Tax
• Profit Before Tax
• Net Assets
• Revenue
We considered the materiality for parent Company
on the same basis as the Group however capped at
60 per cent of Group materiality to address the risk
of aggregation when combined with other
businesses (2023 50 per cent).
Rationale for the
benchmark applied
Given the instability of profit before tax metric
due to the challenging trading environment and
high level of one-off adjusting items, we have
used a blended materiality considering an array
of benchmarks, this is consistent with our
approach in the prior year. In doing so we have
selected metrics which are considered key
performance indicators by management and
users of the financial statements, and that
provide a more consistent indicator of the overall
level of trading activity within the business.
Materiality for the current year represents:
• 0.74 per cent of Revenue (2023 0.7 per cent)
• 6.8 per cent of Adjusted Profit Before Tax
(2023 6.8 per cent)
• 9.1 per cent of Profit Before Tax (2023 14.7 per
cent)
• 0.96 per cent of Net Assets (2023 1.0 per cent)
Amortisation of acquired intangible assets,
share-based payment and other adjusting items
are recorded in arriving at profit before tax. We
have considered adjusting items through our key
audit matter above.
The parent Company includes both the UK trading
entities of the Group and the Head Office. The
value of the standalone parent Company financial
statement to users is in relation to the assets and
equity of the business and as such net assets has
been used as the principal benchmark.
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected
and undetected misstatements exceed the materiality for the financial statements as a whole.
Group financial statements Parent Company financial statements
Performance
materiality
65 per cent of Group materiality
(2023 70 per cent)
65 per cent of parent Company materiality
(2023 70 per cent)
Basis and rationale
for determining
performance
materiality
In determining performance materiality, we have considered a number of factors including the quality
of the control environment, the extent of our ability to rely on controls and the level of corrected and
uncorrected misstatements identified in previous audits.
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Report on the audit of the financial statements continued
6. Our application of materiality continued
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of $170,000
(2023 $168,250), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.
We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation
of the financial statements.
7. An overview of the scope of our audit
7.1. Identification and scoping of components
We performed our scoping of the Group audit on the basis of our understanding of the Group and its environment, including
Group-wide controls, and assessing the audit risks. This exercise has considered the relative size of each reporting unit’s
contribution to revenue, profit before tax, net assets and adjusted profit before tax.
During the second half of 2023 the Group migrated its accounting hub in the US, previously located in California, to the UK
and as such retains two principal locations UK and Hong Kong, where the local finance teams are responsible for the recording
and reporting of the Group’s financial performance. The UK-based finance team are responsible for the US, Europe, Middle East
and Africa region and the Hong Kong team are responsible for the Asia Pacific region. The relative size of these geographies is
set out in note 3 (Operating Segments).
We performed our audit of in scope components based upon a component performance materiality range of $1.1 million -
$1.3 million (2023 $1.2 million to $1.65 million) for account balances determined as required for testing.
We assessed the qualitative and quantitative characteristics of each financial statement line item and considered the relative
contribution of each component to these line items in determining which components would be subject to audit procedures.
Our scoping consisted of two scoping levels at an account balance level. Based on the 2024 actual results, we have outlined
our final scoping for 2024.
The Group engagement team performed all audit work in respect of the consolidation, share-based payments, goodwill
impairment, UK defined benefit pension schemes and all audit work over the parent Company entity including the Group’s UK
trading activities. In addition, the Group engagement team reviewed the performance of all components to ensure that there
were no indications of additional risks of material misstatement within the residual balances.
As each of the components maintains separate financial records, we have engaged component auditors from the Deloitte
member firm in Hong Kong to perform procedures under our direction and supervision. In the prior year we engaged
component auditors in the US, however in response to the change in management’s accounting structure the Group audit team,
located in the UK, have also taken over the responsibility for completion of the audit of the US components.
Direct procedures 92%
Analytical review 8%
Direct procedures 85%
Analytical review 15%
Direct procedures 97%
Analytical review 3%
Revenue
Profit
before tax
Net assets
Independent auditor’s report to the members
of Spirent Communications plc continued
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7.2. Our consideration of the control environment
We tested general IT controls over IT systems that were key to the Group’s revenue recognition process. These included
principally the global instances of the Group’s Enterprise Resource Planning, the system that contains the Group’s general ledger,
but also extended to certain tools the Group uses as complementary to those systems. We also tested relevant controls over the
supporting infrastructure of those systems including databases and operating systems.
We performed detailed walkthroughs of all relevant processes and obtained an understanding of relevant controls over revenue,
adjusting items and financial reporting cycles which addressed a significant risk of material misstatement. We have also
obtained an understanding of controls for further relevant account balances, including inventory.
Where control deficiencies and improvements were identified in relation to IT systems and segregation of duties, these were
reported to management and the Audit and Risk Committee as appropriate. The Group continues to invest time in responding
to, and addressing, our observations.
Based on our testing and understanding obtained, we have adopted a fully substantive approach.
7.3. Our consideration of climate-related risks
In planning our audit, we have considered the potential impact of climate change on the Group’s business and its financial
statements. Our risk assessment procedures included an understanding of management’s process for identifying and
considering climate-related risks and assessing whether the risks were consistent with our understanding of the entity.
The Group continues to focus on its assessment of the potential impacts of environmental, social and governance (“ESG”) related
risks, including climate change, as outlined on page 35. The risks identified by management include the potential for energy
costs increases in the short term and in the medium term, the potential for physical site damage, increased insurance costs
and capital expenditure and the potential for supplier disruption.
With the involvement of our ESG specialist, we have:
• obtained an understanding of management’s climate-related risk assessment and evaluated the key assumptions;
• held discussions with management to understand their governance process, the process of identifying climate-related risks,
the determination of mitigating actions and the impact on the Group’s financial statements;
• read the disclosures in the Strategic report to whether they are materially consistent with the financial statements and our
knowledge obtained in the audit; and
• we have also evaluated the appropriateness of disclosures included in the financial statements.
Management has developed two climate change scenarios and determined that there is no material impact arising from
climate change on the judgements and estimates made in the financial statements, as disclosed on page 36 and in note 2.
7.4. Working with other auditors
In order to direct and supervise the component auditors we held regular formal video calls with all teams to ensure that we
gained a common understanding of the entity. We issued detailed referral instructions to the component auditors, reviewed
and supervised their work and held frequent remote communication and also discussed the appropriateness of the procedures
being performed by the component team. We performed a site visit in order to oversee the work of the Hong Kong component
audit team. We also attended key Group briefings on both regional and segment performance.
8. Other information
The other information comprises the information included in the Annual Report, other than the financial statements and
our auditor’s report thereon. The Directors are responsible for the other information contained within the Annual Report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements, or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives
rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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Report on the audit of the financial statements continued
9. Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the parent Company’s ability
to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or the parent Company or to cease operations, or have no
realistic alternative but to do so.
10. Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
11. Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with
laws and regulations, we considered the following:
• the nature of the industry and sector, control environment and business performance including the design of the Group’s
remuneration policies, key drivers for Directors’ remuneration, bonus levels and performance targets;
• results of our enquiries of management, internal audit and the Audit Committee about their own identification and assessment
of the risks of irregularities including those that are specific to the Group’s sector;
• any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures relating to:
– identifying, evaluating and complying with laws and regulations and whether they were aware of any instances
of non-compliance;
– detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; and
– the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and
• the matters discussed among the audit engagement team, including significant component audit teams, and relevant internal
specialists, including tax, valuations, pensions and IT specialists regarding how and where fraud might occur in the financial
statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud
and identified the greatest potential for fraud in the appropriateness of revenue recognition, in particular cut-off risk, and
classification of adjusting items. In common with all audits under ISAs (UK), we are also required to perform specific procedures
to respond to the risk of management override.
Independent auditor’s report to the members
of Spirent Communications plc continued
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We also obtained an understanding of the legal and regulatory framework that the Group operates in, focusing on provisions of
those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial
statements. The key laws and regulations we considered in this context included the UK Companies Act 2006, the relevant tax
compliance regulations in the jurisdictions in which the Group operates, the Listing Rules and pensions legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements
but compliance with which may be fundamental to the Group’s ability to operate or to avoid a material penalty. These included,
in particular, considering the effect of the US’s restrictions on trading with China and the necessity of licenses for various of the
Group’s products.
11.2. Audit response to risks identified
As a result of performing the above, we identified the appropriateness of revenue recognition and classification of adjusting
items as key audit matters related to the potential risk of fraud. The key audit matters section of our report explains the matters in
more detail and also describes the specific procedures we performed in response to those key audit matters.
In addition to the above, our procedures to respond to risks identified included the following:
• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions
of relevant laws and regulations described as having a direct effect on the financial statements;
• enquiring of management, the Audit Committee and in-house and external legal counsel concerning actual and potential
litigation and claims;
• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud;
• reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing
correspondence with relevant tax authorities;
• in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and
other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias;
and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members
including internal specialists and component audit teams and remained alert to any indications of fraud or non-compliance with
laws and regulations throughout the audit.
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Report on other legal and regulatory requirements
12. Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance
with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
• the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and their environment obtained in
the course of the audit, we have not identified any material misstatements in the Strategic Report or the Directors’ Report.
13. Corporate Governance Statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of
the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance
Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the financial statements and our knowledge obtained
during the audit:
• the Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and
any material uncertainties identified set out on page 111;
• the Directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the
period is appropriate set out on page 112;
• the Directors’ statement on fair, balanced and understandable set out on page 113;
• the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 55;
• the section of the Annual Report that describes the review of effectiveness of risk management and internal control
systems set out on page 80; and
• the section describing the work of the Audit Committee set out on page 77.
14. Matters on which we are required to report by exception
14.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the parent Company financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of Directors’ remuneration
have not been made or the part of the Directors’ Remuneration Report to be audited is not in agreement with the accounting
records and returns.
We have nothing to report in respect of these matters.
Independent auditor’s report to the members
of Spirent Communications plc continued
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15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the Audit Committee, we were appointed by the Board of Directors on 28 April 2021 to
audit the financial statements for the year ending 31 December 2021 and subsequent financial periods. The period of total
uninterrupted engagement including previous renewals and re-appointments of the firm is four years, covering the years
ending 31 December 2021 to 31 December 2024.
15.2. Consistency of the audit report with the additional report to the Audit Committee
Our audit opinion is consistent with the additional report to the Audit Committee we are required to provide in accordance
with ISAs (UK).
16. Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or
for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR)4.1.15R – DTR 4.1.18R,
these financial statements will form part of the Electronic Format Annual Financial Report filed on the National Storage
Mechanism of the FCA in accordance with DTR 4.1.15R – DTR 4.1.18R. This auditor’s report provides no assurance over whether
the Electronic Format Annual Financial Report has been prepared in compliance with DTR 4.1.15R – DTR 4.1.18R.
Jane Makrakis FCA
For and on behalf of Deloitte LLP
Statutory Auditor
Reading
4 March 2025
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Consolidated income statement
Year to 31 December 2024
Year ended 31 December 2024 | Year ended 31 December 2023 | ||||||
| Adjusting | Adjusting | ||||||
| Adjusted | items 1 | Reported | Adjusted | items 1 | Reported | ||
| Notes | $ million | $ million | $ million | $ million | $ million | $ million | |
Revenue | 3 | ||||||
Cost of sales | ( | ( | ( | ( | |||
Gross profit | |||||||
Product development | 3 | ( | ( | ( | ( | ||
Selling and marketing | ( | ( | ( | ( | |||
Administration | ( | ( | ( | ( | ( | ( | |
Operating profit | ( | ( | |||||
| Adjusting items: | |||||||
Acquired intangible asset amortisation | ( | ( | ( | ( | |||
Share-based payment | 31 | ( | ( | ( | ( | ||
Other adjusting items | 5 | ( | ( | ( | ( | ||
( | ( | ( | ( | ||||
Finance income | 6 | ||||||
Finance costs | 7 | ( | ( | ( | ( | ||
Profit before tax | 4 | ( | ( | ||||
Tax (charge) /credit | 10 | ( | ( | ( | |||
Profit for the year attributable to owners of the parent Company | ( | ( | |||||
Earnings per share (cents) | 11 | ||||||
Basic | |||||||
Diluted |
Note
1. Adjusting items comprise amortisation of acquired intangible assets, share-based payment, other adjusting items, tax on adjusting items and any over/under
provision in respect of prior year tax.
The performance of the Group is assessed using a variety of non-GAAP alternative performance measures which are presented
to provide additional financial information that is regularly reviewed by management. Adjusting items are identified and
excluded by virtue of their size, nature or incidence as they do not reflect management’s evaluation of the underlying trading
performance of the Group. The alternative performance measures are presented on pages 195 to 196. The reported GAAP
measures give the complete measure of financial performance.
The notes on pages 131 to 170 and pages 191 to 192 form part of these financial statements.
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| 2024 | 2023 | ||
| Notes | $ million | $ million | |
Profit for the year attributable to owners of the parent Company | |||
| Other comprehensive (loss)/income | |||
| Items that may subsequently be reclassified to profit or loss: | |||
– Exchange differences on retranslation of foreign operations | ( | ||
| Items that will not subsequently be reclassified to profit or loss: | |||
– Re-measurement of the net defined benefit pension asset | 9 | ( | ( |
– Income tax effect of re-measurement of the net defined benefit pension asset | 10 | ( | ( |
– Re-measurement of the deferred compensation liability | 9 | ( | |
( | ( | ||
Other comprehensive loss | ( | ( | |
Total comprehensive income for the year attributable to owners of the parent Company |
The notes on pages 131 to 170 and pages 191 to 192 form part of these financial statements.
Consolidated statement of comprehensive income
Year to 31 December 2024
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Spirent Communications plc Annual Report 2024
Consolidated balance sheet
At 31 December 2024
| 2024 | 2023 | ||
| Notes | $ million | $ million | |
| Assets | |||
| Non-current assets | |||
Intangible assets | 13 | ||
Property, plant and equipment | 14 | ||
Right-of-use assets | 15 | ||
Trade and other receivables | 19 | ||
Assets recognised from costs to obtain a contract | 20 | ||
Defined benefit pension plan surplus | 9 | ||
Deferred tax asset | 26 | ||
| Current assets | |||
Inventories | 18 | ||
Trade and other receivables | 19 | ||
Assets recognised from costs to obtain a contract | 20 | ||
Current tax asset | |||
Cash and cash equivalents | 21 | ||
Total assets | |||
| Liabilities | |||
| Current liabilities | |||
Trade and other payables | 22 | ( | ( |
Contract liabilities | 24 | ( | ( |
Lease liabilities | 25 | ( | ( |
Other financial liabilities | 22 | ( | |
Current tax liability | ( | ( | |
Provisions | 27 | ( | ( |
( | ( | ||
| Non-current liabilities | |||
Trade and other payables | 22 | ( | ( |
Contract liabilities | 24 | ( | ( |
Lease liabilities | 25 | ( | ( |
Defined benefit pension plan deficit | 9 | ( | ( |
Provisions | 27 | ( | ( |
( | ( | ||
Total liabilities | ( | ( | |
Net assets | |||
Capital and reserves | 29 | ||
Share capital | |||
Share premium account | |||
Capital redemption reserve | |||
Other reserves | |||
Translation reserve | |||
Retained earnings | |||
Total equity attributable to owners of the parent Company |
The notes on pages 131 to 170 and pages 191 to 192 form part of these financial statements.
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Spirent Communications plc Annual Report 2024
| Attributable to the equity holders of the parent Company | ||||||||
| $ million | ||||||||
| Share | Capital | |||||||
| Share | premium | redemption | Other | Translation | Retained | Total | ||
| Notes | capital | account | reserve | reserves | reserve | earnings | equity | |
At 1 January 2023 | ||||||||
Profit for the year | ||||||||
Other comprehensive income/(loss) 1 | ( | ( | ||||||
Total comprehensive income | ||||||||
Share-based payment | 31 | |||||||
Tax charge on share incentives | 10 | ( | ( | |||||
Equity dividends | 12 | ( | ( | |||||
Share repurchase | 29 | ( | ( | ( | ||||
Exchange adjustment | ( | |||||||
At 1 January 2024 | ||||||||
Profit for the year | ||||||||
Other comprehensive loss 2 | ( | ( | ( | |||||
Total comprehensive income/(loss) | ( | |||||||
Share-based payment | 31 | |||||||
Tax credit on share incentives | 10 | |||||||
Equity dividends | 12 | |||||||
Exchange adjustment | ( | ( | ( | |||||
At 31 December 2024 |
Notes
1. The amount included in other comprehensive income/(loss) for 2023 of $4.8 million represents re-measurement losses on the net defined benefit pension asset
of $4.1 million, a tax charge of $0.1 million and remeasurement losses on the deferred compensation liability of $0.6 million. The amount included in the
translation reserve of $2.8 million represents other comprehensive gain related to the translation of foreign operations.
2. The amount included in other comprehensive loss for 2024 of $5.1 million represents re-measurement losses on the net defined benefit pension asset of $4.5
million, and a tax charge of $0.6 million. The amount included in the translation reserve of $2.7 million represents other comprehensive loss related to the
translation of foreign operations.
The notes on pages 131 to 170 and pages 191 to 192 form part of these financial statements.
Consolidated statement of changes in equity
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Spirent Communications plc Annual Report 2024
Consolidated cash flow statement
Year to 31 December 2024
| 2024 | 2023 | ||
| Notes | $ million | $ million | |
| Cash flows from operating activities | |||
Cash flow from operations | 32 | ||
Tax paid | ( | ( | |
Net cash inflow from operating activities | |||
| Cash flows from investing activities | |||
Interest received | |||
Capitalised development costs | ( | ||
Purchase of property, plant and equipment | 14 | ( | ( |
Proceeds from the sale of property, plant and equipment | |||
Lease payments received from finance leases | 15 | ||
Acquisition of business | 33 | ( | |
Net cash used in investing activities | ( | ( | |
| Cash flows from financing activities | |||
Lease liability principal repayments | 25 | ( | ( |
Lease liability interest paid | 25 | ( | ( |
Dividend paid | 12 | ( | |
Share purchase into Employee Share Ownership Trust | 29 | ||
Share repurchase | 29 | ( | |
Net cash used in financing activities | ( | ( | |
Net increase/(decrease) in cash and cash equivalents | ( | ||
Cash and cash equivalents at the beginning of the year | |||
Effect of foreign exchange rate changes | ( | ||
Cash and cash equivalents at the end of the year | 21 |
The notes on pages 131 to 170 and pages 191 to 192 form part of these financial statements.
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130
Spirent Communications plc Annual Report 2024
1. Corporate information
The Group’s consolidated financial statements for the year ended 31 December 2024 were authorised for issue by the Board of
Directors on 4 March 2025. Spirent Communications plc is a public limited company incorporated and domiciled in England
The Company’s Ordinary Shares are traded on the London Stock Exchange.
The Company has elected to prepare the Company financial statements in accordance with United Kingdom Generally
Accepted Accounting Practice including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (FRS 101) and the
Companies Act 2006. These are presented on pages 171 to 172 and the accounting policies in respect of the Company are set
out on pages 173 to 190.
2. Material accounting policies
Notes to the consolidated financial statements
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131
Spirent Communications plc Annual Report 2024
Notes to the consolidated financial statements continued
2. Material accounting policies continued
Basis of consolidation continued
| Useful life | |
Customer lists | 2 to 7 years |
Current technology | 5 to 7 years |
Brand names | 3 years |
Licences | 3 to 5 years |
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Spirent Communications plc Annual Report 2024
2. Material accounting policies continued
Freehold buildings | 50 years |
Plant and machinery | 3 to 8 years |
| Fixtures, fittings and equipment: | |
- Building installations | 20 years or lease period if lower |
- Fittings and equipment | 3 to 8 years |
- Motor vehicles | 3 to 5 years |
- Business systems software | 4 years |
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Spirent Communications plc Annual Report 2024
Notes to the consolidated financial statements continued
2. Material accounting policies continued
Leases continued
The Group as a lessee continued
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2. Material accounting policies continued
FINANCIAL STATEMENTS
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Spirent Communications plc Annual Report 2024
Notes to the consolidated financial statements continued
2. Material accounting policies continued
FINANCIAL STATEMENTS
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Spirent Communications plc Annual Report 2024
2. Material accounting policies continued
Revenue continued
FINANCIAL STATEMENTS
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Spirent Communications plc Annual Report 2024
Notes to the consolidated financial statements continued
2. Material accounting policies continued
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Spirent Communications plc Annual Report 2024
2. Material accounting policies continued
Adjusting items continued
FINANCIAL STATEMENTS
139
Spirent Communications plc Annual Report 2024
Notes to the consolidated financial statements continued
2. Material accounting policies continued
Critical accounting judgements and key sources of estimation uncertainty continued
Judgements continued
| Effective for annual periods | ||
| International Accounting Standards (IAS/IFRS) | beginning on or after | |
SASB | Amendments to the SASB standards to enhance their international applicability | 1 January 2025 |
IAS 21 | Lack of exchangeability | 1 January 2025 |
IFRS 9/IFRS 7 | Amendments to the Classification and Measurement of Financial Instruments | 1 January 2026 |
IFRS | Annual Improvements to IFRS Accounting Standards — Volume 11 | 1 January 2026 |
IFRS 18 | Presentation and Disclosures in Financial Statements | 1 January 2027 |
IFRS 19 | Subsidiaries without Public Accountability: Disclosures | 1 January 2027 |
FINANCIAL STATEMENTS
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Spirent Communications plc Annual Report 2024
| 2024 | |||||
| $ million | |||||
| Lifecycle | |||||
| Service | Networks & | ||||
| Notes | Assurance | Security | Corporate | Total | |
| Revenue | |||||
| Nature of products and services | |||||
Sale of hardware and software | 78.0 | 205.9 | — | 283.9 | |
Maintenance and support services | 103.0 | 73.3 | — | 176.3 | |
181.0 | 279.2 | — | 460.2 | ||
| Primary geographical markets | |||||
Americas | 127.6 | 145.7 | — | 273.3 | |
Asia Pacific | 33.8 | 92.5 | — | 126.3 | |
Europe, Middle East and Africa | 19.6 | 41.0 | — | 60.6 | |
181.0 | 279.2 | — | 460.2 | ||
| Inter-segment revenue is eliminated. | |||||
| Profit before tax | |||||
Adjusted operating profit | 14.6 | 44.9 | (13.3) | 46.2 | |
Other adjusting items | 5 | (1.2) | (1.3) | (18.6) | (21.1) |
Total reportable segment profit | 13.4 | 43.6 | (31.9) | 25.1 | |
| Unallocated amounts: | |||||
– Acquired intangible asset amortisation | (5.2) | ||||
– Share-based payment | 31 | (9.6) | |||
Operating profit | 10.3 | ||||
Finance income | 6 | 4.5 | |||
Finance costs | 7 | (1.0) | |||
Profit before tax | 13.8 | ||||
| Other information | |||||
Product development | 46.5 | 52.5 | — | 99.0 | |
Intangible asset amortisation – other | — | — | — | — | |
Depreciation of property, plant and equipment | 14 | 3.2 | 5.2 | 0.1 | 8.5 |
Depreciation of right-of-use assets | 15 | 2.5 | 3.9 | 0.3 | 6.7 |
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Notes to the consolidated financial statements continued
3. Operating segments continued
| 2023 | |||||
| $ million | |||||
| Lifecycle | |||||
| Service | Networks & | ||||
| Notes | Assurance | Security | Corporate | Total | |
| Revenue | |||||
| Nature of products and services | |||||
Sale of hardware and software | 86.7 | 203.6 | — | 290.3 | |
Maintenance and support services | 112.4 | 71.6 | — | 184.0 | |
199.1 | 275.2 | — | 474.3 | ||
| Primary geographical markets | |||||
Americas | 133.1 | 135.0 | — | 268.1 | |
Asia Pacific | 49.3 | 104.6 | — | 153.9 | |
Europe, Middle East and Africa | 16.7 | 35.6 | — | 52.3 | |
199.1 | 275.2 | — | 474.3 | ||
| Inter-segment revenue is eliminated. | |||||
| Profit before tax | |||||
Adjusted operating profit | 16.9 | 39.0 | (10.7) | 45.2 | |
Other adjusting items | 5 | (6.1) | (7.3) | (0.8) | (14.2) |
Total reportable segment profit | 10.8 | 31.7 | (11.5) | 31.0 | |
| Unallocated amounts: | |||||
– Acquired intangible asset amortisation | (5.0) | ||||
– Share-based payment | 31 | (7.6) | |||
Operating profit | 18.4 | ||||
Finance income | 6 | 5.4 | |||
Finance costs | 7 | (0.9) | |||
Profit before tax | 22.9 | ||||
| Other information | |||||
Product development | 52.0 | 50.4 | — | 102.4 | |
Intangible asset amortisation – other | 0.1 | — | — | 0.1 | |
Depreciation of property, plant and equipment | 14 | 4.4 | 6.0 | 0.1 | 10.5 |
Depreciation of right-of-use assets | 15 | 3.2 | 3.4 | 0.3 | 6.9 |
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Spirent Communications plc Annual Report 2024
3. Operating segments continued
2024 | 2023 | |
$ million | $ million | |
Non-current assets 1 | ||
Americas | 224.7 | 225.1 |
Asia Pacific | 7.3 | 6.8 |
Europe, Middle East and Africa | 3.7 | 7.4 |
235.7 | 239.3 |
2024 | 2023 | ||
Notes | $ million | $ million | |
Employee benefit costs | 8 | 263.4 | 255.9 |
Costs of inventories recognised as an expense | 77.9 | 65.9 | |
(Reversals)/write-down of inventories to net realisable value | 18 | (0.8) | 2.9 |
Amortisation of intangible assets | 13 | 5.2 | 5.1 |
Depreciation of property, plant and equipment | 14 | 8.5 | 10.5 |
Depreciation of right-of-use assets | 15 | 6.7 | 6.9 |
Amortisation of assets recognised from costs to obtain a contract | 20 | 0.4 | 0.5 |
Expenses relating to short-term leases and leases of low-value assets | 25 | 0.6 | 0.6 |
Product development costs | 99.0 | 102.4 | |
Net foreign exchange loss | 0.5 | 0.9 |
2024 | 2023 | |
$ million | $ million | |
| Audit services | ||
Parent Company | 1.1 | 1.0 |
Subsidiaries | 0.7 | 0.7 |
1.8 | 1.7 | |
| Non-audit fees | ||
Interim review | — | 0.1 |
Total fees | 1.8 | 1.8 |
5. Other adjusting items
2024 | 2023 | |
$ million | $ million | |
Restructuring | 2.5 | 13.5 |
Acquisition related transactions | 18.6 | 0.7 |
21.1 | 14.2 |
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Notes to the consolidated financial statements continued
5. Other adjusting items continued
Restructuring
2024 | 2023 | |
$ million | $ million | |
R&D engineering plan | — | 0.7 |
Finance transformation | 1.2 | 1.1 |
Organisational restructure | 0.8 | 8.8 |
Facilities downsize | 0.5 | 2.9 |
2.5 | 13.5 |
We concluded our R&D engineering site plan to relocate activities from North America to lower-cost regions for our High-Speed
Ethernet business in 2023. No further significant costs are expected in relation to this project.
In 2023, to embed standardised global finance processes, we moved certain accounting activities from North America to the UK,
incurring $1.1 million of costs including $0.5 million of consultancy costs. In 2024, we moved into the next phase of the initiative,
incorporating the review of key global process and/or control enhancements, incurring further consultancy costs of $0.9 million.
Strategic actions were taken to review the cost base and facility footprint in the second half of 2023 and we exited and
downsized three of our North American facilities which gave rise to a non-cash $2.9 million impairment of assets in 2023.
The 2024 amounts relate to moving, relocating and downsizing costs directly attributable to this project.
Acquisition related costs
In March 2024, Keysight announced its intention to purchase Spirent. Therefore, the costs of $18.2 million recognised in 2024
relates mainly to professional advisory charges due to this acquisition. We expect further deal related charges, the majority
of which are expected to be incurred when the deal is closed.
On 8 September 2023, the Group completed the asset purchase of a small Test Lab Automation business carve-out from
NetScout Inc. Retention costs of $0.4 million were incurred during 2024 (2023 $0.7 million).
The tax effect of other adjusting items is a credit of $0.8 million (2023 $2.5 million).
The total cash outflow in respect of other adjusting items is reported within cash flows from operating activities in the
consolidated cash flow statement.
2024 | 2023 | ||
| Note | $ million | $ million | |
Bank interest receivable | 4.1 | 4.8 | |
Net defined benefit pension plan interest | 9 | 0.4 | 0.6 |
4.5 | 5.4 |
2024 | 2023 | ||
| Note | $ million | $ million | |
Lease liability interest | 25 | 1.0 | 0.9 |
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8. Employees
The average number of people employed by the Group during the year was:
2024 | 2023 | |
Number | Number | |
Assembly | 353 | 388 |
Product development | 500 | 500 |
Selling and marketing | 468 | 513 |
Administration | 207 | 220 |
1,528 | 1,621 |
Employee benefit costs, including Executive Directors, were:
2024 | 2023 | ||
Note | $ million | $ million | |
Remuneration | 223.9 | 219.3 | |
Social security costs | 18.9 | 18.7 | |
Pension and other related costs | 10.5 | 10.2 | |
Expense of share–based payment | 31 | 10.1 | 7.7 |
263.4 | 255.9 |
Please refer to the Report on Directors’ Remuneration on pages 83 to 108 and note 34 for disclosures relating to the
emoluments, share incentives and pensions of the Directors.
9. Pensions
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Notes to the consolidated financial statements continued
9. Pensions continued
Defined benefit plans continued
i) Characteristics and risks associated with the Plans continued
2024 | 2023 | |
$ million | $ million | |
| Schemes in net asset position | ||
UK defined benefit pension plan – Staff Plan | — | 12.9 |
UK defined benefit pension plan – Cash Plan | 0.5 | — |
Withholding tax payable | — | (4.5) |
0.5 | 8.4 | |
| Schemes in net liability position | ||
UK defined benefit pension plan – Cash Plan | — | (1.7) |
UK unfunded plan | (0.5) | (0.5) |
US deferred compensation plan | (10.5) | (9.2) |
(11.0) | (11.4) | |
Net pension plan deficit on the balance sheet | (10.5) | (3.0) |
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9. Pensions continued
Defined benefit plans continued
ii) Amounts in the financial statements continued
2024 | 2023 | |
$ million | $ million | |
| Staff Plan | ||
| Unquoted: | ||
- Insured annuities | 1.4 | 1.5 |
- Cash and other | 10.6 | 17.8 |
Insurance policy with PIC | 155.5 | 167.9 |
Fair value of plan assets | 167.5 | 187.2 |
Present value of defined benefit pension plan obligations | (158.1) | (174.3) |
Surplus in the plan | 9.4 | 12.9 |
Impact of asset ceiling | (9.4) | — |
Withholding tax payable | — | (4.5) |
Surplus in the plan on the balance sheet | — | 8.4 |
| Cash Plan | ||
| Quoted: | ||
– Equities | 6.7 | 6.0 |
- Government bonds | 1.5 | 1.9 |
| Unquoted: | ||
– Cash and other | 2.0 | 1.9 |
Fair value of plan assets | 10.2 | 9.8 |
Present value of defined benefit pension plan obligations | (9.7) | (11.5) |
Surplus/(deficit) in the plan | 0.5 | (1.7) |
Total net surplus recognised | 0.5 | 6.7 |
| Unfunded plan | ||
Present value of unfunded obligations | (0.5) | (0.5) |
| Deferred compensation plan | ||
Present value of deferred compensation obligations | (10.5) | (9.2) |
Net pension plan deficit on the balance sheet | (10.5) | (3.0) |
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Notes to the consolidated financial statements continued
9. Pensions continued
Defined benefit plans continued
ii) Amounts in the financial statements continued
2024 | 2023 | |
$ million | $ million | |
Non-investment Plan administration expenses | 1.3 | — |
Current service cost | — | — |
Amount charged to operating costs | 1.3 | — |
Net interest on the net defined benefit pension surplus | (0.4) | (0.6) |
Net charge/(credit) to the income statement | 0.9 | (0.6) |
2024 | 2023 | |
$ million | $ million | |
Re-measurement loss on plans’ assets | (10.7) | (0.3) |
Costs of managing plan assets paid by Company | 0.7 | (1.4) |
Actuarial loss arising from experience | (4.0) | (1.7) |
Actuarial gain arising from the demographic assumptions | (0.1) | 3.2 |
Actuarial (loss)/gain arising from changes in financial assumptions | 14.5 | (4.6) |
Impact of asset ceiling | (9.4) | — |
Withholding tax payable | 4.5 | 0.7 |
Re-measurement of the net defined benefit pension surplus | (4.5) | (4.1) |
2024 | 2023 | |
$ million | $ million | |
At 1 January | 185.8 | 176.8 |
Current service cost | — | — |
Interest cost | 8.0 | 8.6 |
Benefit payments | (12.9) | (11.9) |
Actuarial loss arising from experience | 4.0 | 1.7 |
Actuarial loss/(gain) arising from the demographic assumptions | 0.1 | (3.2) |
Actuarial (gain)/loss arising from changes in financial assumptions | (14.5) | 4.6 |
Exchange adjustment | (2.7) | 9.2 |
Present value of funded defined benefit pension plans’ obligations | 167.8 | 185.8 |
2024 | 2023 | |
$ million | $ million | |
At 1 January | 197.0 | 190.0 |
Interest income on plans’ assets | 8.5 | 9.3 |
Employer contributions | — | — |
Benefit payments | (12.9) | (11.9) |
Non-investment Plan administration expenses | (1.3) | — |
Re-measurement loss on plans’ assets | (10.7) | (0.3) |
Exchange adjustment | (2.9) | 9.9 |
Fair value of plans’ assets | 177.7 | 197.0 |
Withholding tax payable | — | (4.5) |
Fair value of plans’ assets less irrecoverable element of pension plan surplus | 177.7 | 192.5 |
FINANCIAL STATEMENTS
148
Spirent Communications plc Annual Report 2024
9. Pensions continued
Defined benefit plans continued
ii) Amounts in the financial statements continued
2024 | 2023 | |
% | % | |
Inflation – RPI | 3.2 | 3.1 |
Inflation – CPI (pre-2030) | RPI less 1.0% pa | RPI less 1.0% pa |
Inflation – CPI (post-2030) | RPI less 0.1% pa | RPI less 0.1% pa |
Rate of increase in pensionable salaries | CPI | CPI |
Rate of increase for pensions in payment pre-2001 service | 3.7 | 3.6 |
Rate of increase for pensions in payment 2001 to 5 April 2005 service | 3.1 | 3.0 |
Rate of increase for pensions post-5 April 2005 service | 2.1 | 2.1 |
Rate of increase in deferred pensions | CPI | CPI |
Rate used to discount plan liabilities | 5.4 | 4.5 |
2024 | 2023 | |
Weighted average duration of the defined benefit obligation (years) | 10 | 11 |
| Maturity analysis of benefit payments (non-discounted amounts) ($ million) | ||
Maturity ≤ 1 year | 11.0 | 11.0 |
Maturity > 1 ≤ 5 years | 45.6 | 46.2 |
Maturity > 5 ≤ 10 years | 56.0 | 57.7 |
Maturity > 10 ≤ 20 years | 93.7 | 98.4 |
Maturity > 20 ≤ 30 years | 60.2 | 64.7 |
Maturity > 30 years | 35.0 | 39.6 |
Deferred compensation plan
At 31 December 2024, the deferred compensation plan deficit amounted to $10.5 million (2023 $9.2 million).
During the year, a remeasurement loss of $0.7 million was charged to the income statement (2023 $0.6 million) and $0.6 million
recognised directly in the statement of other comprehensive income (2023 $0.6 million). The key financial assumptions include a
discount rate used to discount plan liabilities of 3.4 per cent (2023 3.2 per cent) and an expected investment yield of 6.6 per cent
(2023 5.0 per cent). There is no material impact in 2024 or 2023 of changing each of the key assumptions by 0.1 per cent, in
isolation.
FINANCIAL STATEMENTS
149
Spirent Communications plc Annual Report 2024
Notes to the consolidated financial statements continued
9. Pensions continued
10. Tax
2024 | 2023 | |
$ million | $ million | |
| Tax charge in the income statement | ||
| Current income tax | ||
UK tax | 2.4 | 3.9 |
Foreign tax | 8.7 | 6.4 |
Amounts underprovided/(overprovided) in prior years | 0.7 | (0.8) |
Total current income tax charge | 11.8 | 9.5 |
| Deferred tax | ||
Recognition of deferred tax assets | — | (0.2) |
Reversal of temporary differences | (10.1) | (10.8) |
Adjustments in respect of prior years | (0.8) | (0.8) |
Total deferred tax credit | (10.9) | (11.8) |
Tax charge/(credit) in the income statement | 0.9 | (2.3) |
The tax charge for the year ended 31 December 2024 was $0.9 million (2023 $2.3 million tax credit). This was after a prior year
tax credit of $0.1 million and a tax credit on the adjusting items of $4.2 million (2023 prior year credit of $1.6 million and tax
credit on adjusting items of $6.1 million). Excluding the prior year and tax charge on adjusting items, the effective tax rate was
10.7 per cent (2023 10.8 per cent).
Tax relating to items (credited)/charged to other comprehensive income or equity:
2024 | 2023 | |
$ million | $ million | |
Deferred tax on share incentives | (1.3) | 1.7 |
Current tax on share incentives | — | — |
Tax (credit)/charge on share incentives | (1.3) | 1.7 |
Deferred tax charge/(credit) on defined benefit pension plan | 0.6 | 0.1 |
Deferred tax credit on deferred compensation plan | — | (0.1) |
FINANCIAL STATEMENTS
150
Spirent Communications plc Annual Report 2024
10. Tax continued
Reconciliation of the total tax charge
The tax charge in the income statement for the year is lower than the standard rate of corporation tax in the UK of 25 per cent
(2023 23.5 per cent). The differences are reconciled below:
| Year ended 31 December 2024 | |||
Adjusted | Adjusting | Reported | |
$ million | $ million | $ million | |
Accounting profit before tax | 49.7 | (35.9) | 13.8 |
Accounting profit multiplied by the UK standard rate of corporation tax of 25 per cent | 12.4 | (9.0) | 3.4 |
Differences in overseas rates | (0.7) | 0.2 | (0.5) |
Non-taxable income (offshore income in Hong Kong entity) | (1.1) | (0.1) | (1.2) |
Net state tax credits generated in current year | (0.1) | — | (0.1) |
Utilisation of temporary differences not previously recognised | (0.6) | — | (0.6) |
US Research and Experimental tax credit | (2.0) | — | (2.0) |
Withholding tax | 0.9 | — | 0.9 |
Hong Kong income tax credit | — | — | — |
Permanent differences | (3.5) | 4.6 | 1.1 |
Tax underprovided in prior years | (0.1) | — | (0.1) |
Total tax charge reported in the income statement | 5.2 | (4.3) | 0.9 |
| Year ended 31 December 2023 | |||
Adjusted | Adjusting | Reported | |
$ million | $ million | $ million | |
Accounting profit before tax | 49.7 | (26.8) | 22.9 |
Accounting profit multiplied by the UK standard rate of corporation tax of 23.5 per cent | 11.7 | (6.3) | 5.4 |
Differences in overseas rates | 0.5 | — | 0.5 |
Non-taxable income (offshore income in Hong Kong entity) | (0.9) | — | (0.9) |
Net state tax credits generated in current year | (0.2) | — | (0.2) |
Utilisation of temporary differences not previously recognised | (0.6) | — | (0.6) |
US Research and Experimental tax credit | (2.3) | — | (2.3) |
Withholding tax | 0.4 | (1.0) | (0.6) |
Hong Kong income tax credit | — | — | — |
Permanent differences | (3.2) | 0.2 | (3.0) |
Tax underprovided in prior years | — | (0.6) | (0.6) |
Total tax credit reported in the income statement | 5.4 | (7.7) | (2.3) |
The Group’s tax rate is sensitive to the geographic mix of profits and reflects a combination of higher statutory tax rates in certain
jurisdictions, and other regions with significantly lower statutory tax rates. Regional statutory tax rates range from a high of 35 per
cent to a low of 10 per cent. The UK Patent Box deduction benefit of $2.8 million (2023 $3.2 million), US Foreign-Derived
intangible income deduction of $1.1 million (2023 $0.8 million), and Research and Experimental credits of $2.0 million (2023
$2.3 million) bring down the rate but items such as state taxes and withholding tax increase the tax rate.
FINANCIAL STATEMENTS
151
Spirent Communications plc Annual Report 2024
Notes to the consolidated financial statements continued
11. Earnings per share
Basic
Earnings per share is calculated by dividing the profit for the year attributable to owners of the parent Company by the weighted
average number of Ordinary Shares outstanding during the year.
Diluted
Diluted earnings per share is calculated by dividing the profit for the year attributable to owners of the parent Company by
the weighted average number of Ordinary Shares outstanding during the year plus the weighted average number of Ordinary
Shares that would be issued on the conversion of all dilutive potential Ordinary Shares into Ordinary Shares.
2024 | 2023 | |
$ million | $ million | |
Profit for the year attributable to owners of the parent Company | 12.9 | 25.2 |
| Number | Number | |
| million | million | |
Weighted average number of Ordinary Shares in issue – basic | 574.6 | 586.7 |
Dilutive potential of employee share incentives | 5.0 | 4.1 |
Weighted average number of Ordinary Shares in issue – diluted | 579.6 | 590.8 |
Cents | Cents | |
| Earnings per share | ||
Basic | 2.25 | 4.30 |
Diluted | 2.22 | 4.26 |
Adjusted
The Group is disclosing adjusted earnings per share attributable to owners of the parent Company in order to provide a
measure to enable period-on-period comparisons to be made of its performance. The following items are excluded from
adjusted earnings:
• acquired intangible asset amortisation;
• share-based payment;
• other adjusting items;
• tax effect on the above items; and
• prior year tax (adjustments made to provisions in respect of prior years).
A reconciliation is provided below:
2024 | 2023 | ||||
Notes | $ million | EPS (cents) | $ million | EPS (cents) | |
Profit for the year attributable to owners of the parent Company | 12.9 | 2.25 | 25.2 | 4.30 | |
Acquired intangible asset amortisation | 5.2 | 5.0 | |||
Share-based payment | 31 | 9.6 | 7.6 | ||
Other adjusting items | 5 | 21.1 | 14.2 | ||
Tax effect on the above items | 10 | (4.2) | (6.1) | ||
Prior year tax (credit)/charge | 10 | (0.1) | (1.6) | ||
Adjusted basic | 44.5 | 7.75 | 44.3 | 7.55 | |
Adjusted diluted | 7.67 | 7.50 |
There were no Ordinary Share transactions that occurred after 31 December that would have significantly changed the number
of Ordinary Shares or potential Ordinary Shares outstanding at the period end if those transactions had occurred before the end
of the reporting period in either year.
FINANCIAL STATEMENTS
152
Spirent Communications plc Annual Report 2024
12. Dividends paid
2024 | 2023 | |
$ million | $ million | |
| Declared and paid in the year | ||
| Equity dividend on Ordinary Shares | ||
Final dividend 2022 of 4.94 cents (4.12 pence) per Ordinary Share (2021 4.37 cents (3.34 pence)) | — | 31.1 |
Interim dividend 2023 of 2.76 cents (2.14 pence) per Ordinary Share (2022 2.63 cents (2.16 pence)) | — | 15.4 |
| 46.5 |
Dividends are determined in US Dollars and paid in Pound Sterling.
| $ million | ||||||||
| Customer | Current | Brand | ||||||
Note | Goodwill | lists | technology | names | Other 1 | Licences | Total | |
| Cost, net of accumulated | ||||||||
amortisation and impairment losses | ||||||||
At 1 January 2023 | 183.1 | 4.7 | 14.0 | 0.1 | — | 0.1 | 202.0 | |
Additions in the year | 3.9 | 2.0 | 2.3 | — | 1.2 | — | 9.4 | |
Amortisation for the year | 4 | — | (1.3) | (3.7) | — | — | (0.1) | (5.1) |
Exchange adjustment | 0.3 | — | 0.1 | (0.1) | — | — | 0.3 | |
At 1 January 2024 | 187.3 | 5.4 | 12.7 | — | 1.2 | — | 206.6 | |
Additions in the year | — | — | — | — | 3.3 | — | 3.3 | |
Amortisation for the year | 4 | — | (1.5) | (3.7) | — | — | — | (5.2) |
Exchange adjustment | (1.2) | — | — | — | — | — | (1.2) | |
At 31 December 2024 | 186.1 | 3.9 | 9.0 | — | 4.5 | — | 203.5 | |
| At 31 December 2023 | ||||||||
Cost (gross carrying amount) | 625.1 | 25.7 | 59.2 | 2.6 | 4.8 | — | 717.4 | |
| Amortisation and accumulated | ||||||||
impairment losses | (437.8) | (20.3) | (46.5) | (2.6) | (3.6) | — | (510.8) | |
Net carrying amount | 187.3 | 5.4 | 12.7 | — | 1.2 | — | 206.6 | |
| At 31 December 2024 | ||||||||
Cost (gross carrying amount) | 600.1 | 25.7 | 59.2 | 2.6 | 4.5 | — | 692.1 | |
| Amortisation and accumulated | ||||||||
impairment losses | (414.0) | (21.8) | (50.2) | (2.6) | — | — | (488.6) | |
Net carrying amount | 186.1 | 3.9 | 9.0 | — | 4.5 | — | 203.5 |
2024 | 2023 | |
$ million | $ million | |
Lifecycle Service Assurance | 114.1 | 114.3 |
Networks & Security | 72.0 | 73.0 |
186.1 | 187.3 |
FINANCIAL STATEMENTS
153
Spirent Communications plc Annual Report 2024
Notes to the consolidated financial statements continued
13. Intangible assets continued
2024 | 2023 | |
% | % | |
Lifecycle Service Assurance | 14.9 | 13.1 |
Networks & Security | 14.4 | 12.7 |
FINANCIAL STATEMENTS
154
Spirent Communications plc Annual Report 2024
13. Intangible assets continued
14. Property, plant and equipment
| $ million | |||||
| Fixtures, | |||||
| Land and | Plant and | fittings and | |||
| Note | buildings | machinery | equipment | Total | |
Cost, net of accumulated depreciation and accumulated impairment | |||||
At 1 January 2023 | 3.8 | 12.4 | 4.4 | 20.6 | |
Additions | — | 5.3 | 1.2 | 6.5 | |
Disposals | (0.1) | (0.1) | (0.2) | (0.4) | |
Impairment 1 | — | (0.3) | (0.1) | (0.4) | |
Inter-class transfers | — | 0.1 | (0.1) | — | |
Depreciation charge for the year | (1.6) | (7.0) | (1.9) | (10.5) | |
At 1 January 2024 | 2.1 | 10.4 | 3.3 | 15.8 | |
Additions | 1.1 | 4.3 | 1.9 | 7.3 | |
Depreciation charge for the year | 4 | (1.0) | (5.7) | (1.8) | (8.5) |
At 31 December 2024 | 2.2 | 9.1 | 3.4 | 14.7 | |
| At 31 December 2023 | |||||
Cost | 22.8 | 87.0 | 40.0 | 149.8 | |
Accumulated depreciation and accumulated impairment | (20.7) | (76.6) | (36.7) | (134.0) | |
Net carrying amount | 2.1 | 10.4 | 3.3 | 15.8 | |
| At 31 December 2024 | |||||
Cost | 23.8 | 87.4 | 40.7 | 151.9 | |
Accumulated depreciation and accumulated impairment | (21.6) | (78.3) | (37.3) | (137.2) | |
Net carrying amount | 2.2 | 9.1 | 3.4 | 14.7 |
Note
1. Impairment of $0.4 million is included in adjusting items (see note 5).
FINANCIAL STATEMENTS
155Spirent Communications plc Annual Report 2024
Notes to the consolidated financial statements continued
| $ million | ||||
| Land and | Motor | |||
| Note | buildings | vehicles | Total | |
| Cost, net of accumulated depreciation and accumulated impairment | ||||
At 1 January 2023 | 19.3 | 0.2 | 19.5 | |
Additions | 4.9 | 0.2 | 5.1 | |
Re-measurement | 2.1 | — | 2.1 | |
Impairment 1 | (2.5) | — | (2.5) | |
| Depreciation charge for the year | 4 | (6.7) | (0.2) | (6.9) |
Exchange adjustment | (0.1) | — | (0.1) | |
At 1 January 2024 | 17.0 | 0.2 | 17.2 | |
Additions | 6.0 | 0.1 | 6.1 | |
Re-measurement | 1.1 | — | 1.1 | |
Depreciation charge for the year | 4 | (6.6) | (0.1) | (6.7) |
Exchange adjustment | (0.2) | — | (0.2) | |
At 31 December 2024 | 17.3 | 0.2 | 17.5 | |
| At 31 December 2023 | ||||
Cost | 66.7 | 0.8 | 67.5 | |
Accumulated depreciation and accumulated impairment | (49.7) | (0.6) | (50.3) | |
Net carrying amount | 17.0 | 0.2 | 17.2 | |
| At 31 December 2024 | ||||
Cost | 64.3 | 0.9 | 65.2 | |
Accumulated depreciation and accumulated impairment | (47.0) | (0.7) | (47.7) | |
Net carrying amount | 17.3 | 0.2 | 17.5 |
The related lease liabilities are disclosed in note 25.
Finance lease receivables (Group as a lessor)
The Group sub-leases an office building that it leased in 2015. The Group has classified the sublease as a finance lease,
because the sublease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset to the
sub lessee.
The following table sets out a maturity analysis of lease receivables, showing the undiscounted lease payments to be received
after the reporting date.
2024 | 2023 | |
$ million | $ million | |
| Maturity analysis – contractual undiscounted cash flows | ||
Less than one year | — | 0.3 |
One to two years | — | — |
Two to three years | — | — |
Total undiscounted lease payments receivable | — | 0.3 |
Net investment in the lease | — | 0.3 |
During the year, $0.3 million (2023 $0.6 million) was received in respect of finance leases.
The net investment in the lease has been included within trade and other receivables (note 19), as follows:
2024 | 2023 | |
$ million | $ million | |
Current | — | 0.3 |
Non-current | — | — |
— | 0.3 |
FINANCIAL STATEMENTS
156 Spirent Communications plc Annual Report 2024
17. Subsidiaries
A list of subsidiaries, including the name, country of incorporation and proportion of ownership interest, is given on pages 191
and 192 of these financial statements.
18. Inventories
2024 | 2023 | |
$ million | $ million | |
Raw materials | 14.3 | 29.2 |
Work in progress | 1.3 | 2.5 |
Finished goods | 19.9 | 11.8 |
35.5 | 43.5 |
A release of $0.8 million (2023 $2.9 million expense) has been credited (2023 charged) to the income statement in the year as a
result of a remeasurement of inventory provisions. There were no reversals of prior period inventory write-downs (2023 nil).
No inventories are carried at fair value less costs to sell (2023 nil). The Directors consider there is no material difference between
the net book value of inventories and their replacement cost.
2024 | 2023 | |
$ million | $ million | |
| Non-current | ||
Other receivables | 4.3 | 4.6 |
Prepayments | 2.4 | 0.4 |
6.7 | 5.0 | |
| Current | ||
Trade receivables | 117.3 | 113.3 |
Other receivables | 6.7 | 7.5 |
Prepayments | 10.9 | 12.9 |
134.9 | 133.7 | |
141.6 | 138.7 |
2024 | 2023 | |
$ million | $ million | |
At 1 January | 2.0 | 1.4 |
Charge for the year | 0.5 | 1.1 |
Released in the year | (0.6) | (0.5) |
At 31 December | 1.9 | 2.0 |
FINANCIAL STATEMENTS
157Spirent Communications plc Annual Report 2024
Notes to the consolidated financial statements continued
20. Assets recognised from costs to obtain a contract
2024 | 2023 | |
$ million | $ million | |
Non-current | 0.7 | 0.3 |
Current | 1.9 | 1.0 |
2.6 | 1.3 |
These assets relate to capitalised incremental costs to obtain a contract, being sales commissions, arising on contracts with
customers of over one year in length.
During the year, amortisation of $0.4 million was charged to the income statement (2023 $0.5 million).
No assets were impaired or derecognised during the current year or prior year.
21. Cash and cash equivalents
2024 | 2023 | |
$ million | $ million | |
Cash at bank and in hand | 140.7 | 103.6 |
Short-term bank deposits | 1.1 | 4.5 |
141.8 | 108.1 |
Cash at bank and in hand earns interest at floating interest rates.
Short-term bank deposits are made for varying periods of between one day and three months depending on the cash
requirements of the Group and earn interest at the short-term deposit rates appropriate for the term of the deposit and currency.
At the end of 2024, the currency split of cash and cash equivalents was US Dollar 51 per cent (2023 47 per cent), Pound Sterling
35 per cent (2023 34 per cent) and other currencies 14 per cent (2023 19 per cent).
For the purposes of the cash flow statement, cash and cash equivalents comprise the above amounts.
2024 | 2023 | ||
Note | $ million | $ million | |
| Current | |||
Trade payables | 21.2 | 19.3 | |
Other taxes and social security costs | 5.5 | 3.2 | |
Other payables | — | 0.1 | |
Accruals | 51.1 | 42.2 | |
Government grants | 23 | 0.9 | 1.1 |
78.7 | 65.9 | ||
| Non-current | |||
Other payables | 0.2 | 0.2 | |
78.9 | 66.1 |
2024 | 2023 | |
$ million | $ million | |
Other financial liabilities | 0.1 | — |
FINANCIAL STATEMENTS
158 Spirent Communications plc Annual Report 2024
23. Government grants
The following government grants are included within trade and other payables:
2024 | 2023 | |
$ million | $ million | |
At 1 January | 1.1 | 1.2 |
Received during the year | — | 0.1 |
Released to the income statement | (0.1) | (0.3) |
Exchange adjustment | (0.1) | 0.1 |
At 31 December | 0.9 | 1.1 |
Government grants have been received to accelerate and support research and development in the vulnerability of global
navigation satellite systems and other high technology projects.
24. Contract balances
The following table provides information about receivables and contract liabilities from contracts with customers. The Group
does not have any contract assets.
2024 | 2023 | ||
Note | $ million | $ million | |
Trade receivables | 19 | 117.3 | 113.3 |
| Contract liabilities | |||
| Current | |||
Payments received on account | 5.9 | 7.4 | |
Deferred income | 62.8 | 59.2 | |
68.7 | 66.6 | ||
| Non-current | |||
Deferred income | 29.2 | 33.7 | |
Total contract liabilities | 97.9 | 100.3 | |
| Revenue recognised in the period from amounts included in contract liabilities | |||
at the beginning of the period | 66.6 | 75.5 |
There was no revenue recognised in 2024 or 2023 from performance obligations satisfied in previous periods.
The timing of revenue recognition, invoicing and cash collections results in trade receivables, deferred income and advance
customer payments received on account on the balance sheet.
The Group receives payments from customers based on a billing schedule, as established in the contract. Trade receivables are
recognised when the right to consideration becomes unconditional. Contract liabilities are recognised as revenue as (or when)
the Group performs under the contract.
The Group also recognises incremental costs incurred to obtain a contract as an asset if it expects to recover those costs.
Such costs are presented in the balance sheet as assets recognised from costs to obtain a contract and disclosed in note 20.
Expected realisation of remaining performance obligations at year end
The Group applies the practical expedient in paragraph 121 of IFRS 15 and does not disclose information about remaining
performance obligations that have original expected durations of one year or less.
For contracts that exceed one year, deferred income that relates to unsatisfied or partially satisfied performance obligations
at year end is expected to be recognised as revenue in the future as follows:
2024 | 2023 | |
$ million | $ million | |
Within one year | 56.3 | 13.3 |
Greater than one year | 23.1 | 33.7 |
79.4 | 47.0 |
The above information represents the revenue the Group will recognise when it satisfies the remaining performance obligations
in the contracts. The amounts presented do not include orders for which neither party has performed.
FINANCIAL STATEMENTS
159Spirent Communications plc Annual Report 2024
Notes to the consolidated financial statements continued
24. Contract balances continued
Expected realisation of remaining performance obligations at year end continued
Revenue from the sale of hardware and software generally arises from contracts less than one year in length. Consequently,
the above amounts predominantly relate to the sale of maintenance and support services.
Virtually all of the revenue will be recognised within three years.
The Group provides standard warranties on its products and services. The nature of these warranties is considered to
provide customers with assurance that the related product or service will function as intended in accordance with the agreed
specification, and does not contain or imply any additional service obligation to the customer. Warranty obligations are
estimated and recognised as liabilities based on the probable outflow of resources.
25. Lease liabilities
Total lease liabilities included in the balance sheet at 31 December:
| $ million | |||
| Land and | Motor | ||
| buildings | vehicles | Total | |
At 1 January 2023 | 21.9 | 0.2 | 22.1 |
Additions | 4.8 | 0.2 | 5.0 |
Re-measurement | 2.1 | — | 2.1 |
Repayments | (8.6) | (0.2) | (8.8) |
Interest | 0.9 | — | 0.9 |
Exchange adjustment | — | 0.1 | 0.1 |
At 1 January 2024 | 21.1 | 0.3 | 21.4 |
Additions | 6.0 | 0.1 | 6.1 |
Re-measurement | 1.1 | — | 1.1 |
Repayments | (9.1) | (0.2) | (9.3) |
Interest | 1.0 | — | 1.0 |
At 31 December 2024 | 20.1 | 0.2 | 20.3 |
2024 | 2023 | |
$ million | $ million | |
Current | 7.6 | 10.7 |
Non-current | 12.7 | 10.7 |
20.3 | 21.4 |
Nil (2023 $0.3 million) of the lease liability included in the balance sheet relates to a building the Group subleases; see note 15
for further details.
2024 | 2023 | |
$ million | $ million | |
| Maturity analysis – contractual undiscounted cash flows | ||
Less than one year | 8.2 | 10.8 |
One to five years | 13.1 | 9.3 |
More than five years | 0.6 | 1.7 |
Total undiscounted lease liabilities at 31 December | 21.9 | 21.8 |
FINANCIAL STATEMENTS
160 Spirent Communications plc Annual Report 2024
25. Lease liabilities continued
2024 | 2023 | ||
Note | $ million | $ million | |
| Amounts recognised in the income statement | |||
Interest on lease liabilities | 7 | 1.0 | 0.9 |
Expenses relating to short-term leases | 0.4 | 0.3 | |
| Expenses relating to leases of low-value assets, excluding leases of short-term | |||
low-value assets | 0.2 | 0.3 | |
| Amounts recognised in the cash flow statement | |||
Lease liability principal repayment | 8.2 | 7.9 | |
Lease liability interest paid | 1.0 | 0.9 |
Cash payments of $0.6 million (2023 $0.6 million) relating to short-term leases and leases of low-value assets are classified
within cash flows from operating activities in the consolidated cash flow statement.
Extension options
Some leases of buildings contain extension options exercisable by the Group before the end of the non-cancellable contract
period. Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The
extension options held are exercisable only by the Group and not the lessors. The Group assesses at lease commencement
whether it is reasonably certain to exercise the extension options. The Group reassesses whether it is reasonably certain to
exercise the options if there is a significant event or significant change in circumstances within its control.
| 2024 | 2023 | |||
| $ million | $ million | |||
| Potential future lease | Potential future lease | |||
| Lease liabilities | payments not included | Lease liabilities | payments not included | |
| recognised | in lease liabilities | recognised | in lease liabilities | |
| (discounted) | (discounted) | (discounted) | (discounted) | |
Buildings | 4.2 | 16.9 | 4.2 | 23.3 |
| $ million | ||||||
| Temporary | Tax | Tax | UK pension | |||
| Notes | differences | losses | credits | plans | Total | |
At 1 January 2023 | 23.8 | 2.8 | 5.7 | 0.5 | 32.8 | |
Charged/(credited) in the year | 10 | 11.4 | 0.3 | 0.1 | — | 11.8 |
Deferred tax on defined benefit pension plan | 10 | — | — | — | (0.1) | (0.1) |
Deferred tax on deferred compensation plan | 10 | 0.1 | — | — | — | 0.1 |
Deferred tax on share incentives recognised in equity | 10 | (1.7) | — | — | — | (1.7) |
| Exchange adjustment | 0.3 | (0.1) | — | 0.1 | 0.3 | |
At 1 January 2024 | 33.9 | 3.0 | 5.8 | 0.5 | 43.2 | |
Charged/(credited) in the year | 10 | 11.7 | (1.0) | 0.2 | — | 10.9 |
Deferred tax on defined benefit pension plan | 10 | — | — | — | (0.6) | (0.6) |
Deferred tax on deferred compensation plan | 10 | — | — | — | — | — |
Deferred tax on share incentives recognised in equity | 10 | 1.3 | — | — | — | 1.3 |
| Exchange adjustment | (0.2) | — | — | 0.1 | (0.1) | |
At 31 December 2024 | 46.7 | 2.0 | 6.0 | — | 54.7 | |
| Amounts on the balance sheet: | ||||||
| At 31 December 2023 | ||||||
Deferred tax asset | 33.9 | 3.0 | 5.8 | 0.5 | 43.2 | |
Deferred tax liability | — | — | — | — | — | |
33.9 | 3.0 | 5.8 | 0.5 | 43.2 | ||
| At 31 December 2024 | ||||||
Deferred tax asset | 46.7 | 2.0 | 6.0 | — | 54.7 | |
Deferred tax liability | — | — | — | — | — | |
46.7 | 2.0 | 6.0 | — | 54.7 |
FINANCIAL STATEMENTS
161Spirent Communications plc Annual Report 2024
Notes to the consolidated financial statements continued
26. Deferred tax continued
| $ million | ||||
| Lease | Restructuring | Other | ||
| provisions | provisions | provisions | Total | |
At 1 January 2023 | 3.4 | 1.3 | 3.7 | 8.4 |
Charged in the year | 0.2 | 1.6 1 | — | 1.8 |
Utilised in the year | (0.1) | (1.9) | (0.3) | (2.3) |
Exchange difference | — | — | 0.1 | 0.1 |
At 1 January 2024 | 3.5 | 1.0 | 3.5 | 8.0 |
Charged in the year | 0.2 | 0.2 | — | 0.4 |
Released in the year | (0.3) | — | — | (0.3) |
Utilised in the year | — | (1.0) | — | (1.0) |
Exchange difference | — | — | (0.1) | (0.1) |
At 31 December 2024 | 3.4 | 0.2 | 3.4 | 7.0 |
FINANCIAL STATEMENTS
162 Spirent Communications plc Annual Report 2024
27. Provisions continued
2024 | 2023 | |
$ million | $ million | |
Current | 3.7 | 5.0 |
Non-current | 3.3 | 3.0 |
7.0 | 8.0 |
2024 | 2023 | |||
Measurement category under IFRS 9 | Notes | $ million | $ million | |
Non-current trade and other receivables 1 | Financial assets at amortised cost | 19 | 4.3 | 4.6 |
Cash and cash equivalents | Financial assets at amortised cost | 21 | 141.8 | 108.1 |
Current trade and other receivables | Financial assets at amortised cost | 19 | 124.0 | 120.8 |
Financial assets | 270.1 | 233.5 | ||
Non-current other payables | Financial liabilities at amortised cost | 22 | 0.2 | 0.2 |
| Current trade payables, other payables | ||||
and accruals | Financial liabilities at amortised cost | 22 | 72.3 | 61.6 |
Current other financial liabilities 2 | Derivatives designated at FVTPL | 22 | 0.1 | — |
Lease liabilities, current and non-current | Financial liabilities at amortised cost | 25 | 20.3 | 21.4 |
Contractual provisions | Financial liabilities at amortised cost | 27 | 3.4 | 3.5 |
Financial liabilities | 96.3 | 86.7 |
FINANCIAL STATEMENTS
163Spirent Communications plc Annual Report 2024
Notes to the consolidated financial statements continued
28. Financial instruments and financial risk management continued
2024 | 2023 | ||||
| Effective | Effective | ||||
| interest rate | interest rate | ||||
| Note | % | $ million | % | $ million | |
| Floating rate | |||||
Cash at bank | 21 | 140.7 | 103.6 | ||
| Fixed rate | |||||
Fixed deposits | 21 | 4.65 | 1.1 | 0.80 | 4.5 |
FINANCIAL STATEMENTS
164 Spirent Communications plc Annual Report 2024
28. Financial instruments and financial risk management continued
b) Credit risk continued
2024 | 2023 | |||||
| Gross | Gross | |||||
| trade | Net trade | trade | Net trade | |||
| receivables | Provision | receivables | receivables | Provision | receivables | |
| $ million | $ million | $ million | $ million | $ million | $ million | |
Not past due | 101.2 | — | 101.2 | 95.7 | — | 95.7 |
| Past due: | ||||||
– Less than 30 days overdue | 8.6 | — | 8.6 | 9.3 | (0.2) | 9.1 |
– 30 to 60 days | 3.1 | — | 3.1 | 3.0 | — | 3.0 |
– Over 60 days | 6.3 | (1.9) | 4.4 | 7.3 | (1.8) | 5.5 |
Trade receivables | 119.2 | (1.9) | 117.3 | 115.3 | (2.0) | 113.3 |
| The Group closely monitors amounts due from customers and performs activities such as credit checks and reviews of payment |
2024 | 2023 | |
$ million | $ million | |
Sale of US Dollars against Pound Sterling | 5.9 | 3.1 |
FINANCIAL STATEMENTS
165Spirent Communications plc Annual Report 2024
Notes to the consolidated financial statements continued
28. Financial instruments and financial risk management continued
29. Equity
| Number of | ||
| Ordinary | ||
Shares 1 | ||
million | $ million | |
At 1 January 2023 | 611.7 | 24.7 |
Share repurchase/share buyback | (33.1) | (1.4) |
Exchange adjustment | 1.3 | |
At 1 January 2024 | 578.6 | 24.6 |
Exchange adjustment | (0.4) | |
At 31 December 2024 | 578.6 | 24.2 |
FINANCIAL STATEMENTS
166 Spirent Communications plc Annual Report 2024
30. Employee share plans
Movements in share incentives over a two-year period ending on 31 December 2024 are shown below:
2005 | Employee | Spirent Long-Term | ||
Incentive Plan 1 | Incentive Plan 2 | |||
| Weighted | Weighted | |||
| Number | average | Number | average | |
| of share | exercise | of share | exercise | |
| incentives | price | incentives | price | |
| million | pence | million | pence | |
Incentives outstanding at 1 January 2023 | 0.3 | 89 | 8.2 | — |
Exercised | — | 8 9 | (2.7) | — |
Granted | — | — | 6.2 | — |
Forfeited | — | — | (0.9) | — |
Incentives outstanding at 31 December 2023 | 0.3 | 89 | 10.8 | — |
Exercised | 0.3 | 89 | (4.6) | — |
Granted | — | — | 7.5 | — |
Forfeited | — | — | (1.2) | — |
Incentives outstanding at 31 December 2024 | 0.3 | 89 | 12.5 | — |
| Incentives exercisable | ||||
At 31 December 2023 | 0.3 | 89 | 10.8 | — |
At 31 December 2024 | — | — | 12.5 | — |
Notes
1. Figures for the 2005 Employee Incentive Plan include share options, stock appreciation rights and Performance Shares in aggregate. No exercise price is
payable on the vesting of a Performance Share.
2. Figures for the Spirent Long-Term Incentive Plan include restricted stock and Performance Shares in aggregate. No exercise price is payable on the vesting of a
Performance Share.
The weighted average share price at exercise date was 176 pence (2023 171 pence).
The following information relates to outstanding share incentives at 31 December 2024:
2024 | 2023 | ||||||||
| Weighted | Weighted | ||||||||
| Weighted | Number of | average | Weighted | Number of | average | ||||
| average | share | remaining | average | share | remaining | ||||
| Exercise | Exercise | exercise | incentives | contractual | exercise | incentives | contractual | ||
| period (as at | price | price | outstanding | life | price | outstanding | life | ||
| Share plan | 31 December) | pence | pence | million | years | pence | million | years | |
2005 | Employee | ||||||||
| Incentive Plan | — | — | — | 89 | 0.3 | 1.2 | |||
| Spirent Long-Term | 15.03.25– | ||||||||
| Incentive Plan | 15.03.27 | — | — | 12.5 | 1.1 | — | 10.8 | 1.0 | |
12.5 | 11.1 |
Discretionary plans
Spirent Long-Term Incentive Plan (LTIP)
Under the LTIP, awards of shares are granted to Executive Directors and certain employees. The release of these shares is
generally conditional upon continued employment and, for more senior individuals, some awards are conditional on the
achievement of certain performance targets measured over a three-year period.
Further information on the performance conditions for LTIP share incentives is set out in the Report on Directors’ Remuneration.
2005 Employee Incentive Plan (EIP)
The EIP closed for new awards following the 2016 AGM and was replaced by the Spirent Long-Term Incentive Plan. Awards
granted under the EIP expire on the tenth anniversary of their grant unless they have previously lapsed or been exercised.
FINANCIAL STATEMENTS
167Spirent Communications plc Annual Report 2024
Notes to the consolidated financial statements continued
30. Employee share plans continued
All-employee plans
UK Employee Share Purchase Plan (UK ESPP)
The UK ESPP is an all-employee HMRC approved share plan normally open to employees based in the UK. Employees can elect
to invest up to £125 each month (£1,500 per year), deducted from their gross salary, which is used to purchase shares at market
value as “partnership” shares. The Company offers participants “matching” shares, which are subject to forfeiture for three years,
on the basis of one free matching share for each partnership share purchased.
UK Sharesave Plan (Sharesave)
The Sharesave is an all-employee HMRC approved share plan normally open to employees based in the UK. Employees can
elect to invest up to £250 each month, deducted from their post-tax salary, which is then held in a savings account for three
years. At the conclusion of the savings period, the employee can opt to receive the accumulated funds as cash or use them to
buy Spirent shares at a discounted option price that is 15 per cent below the three-day average of Spirent’s mid-market share
price immediately before the invitation date.
US Employee Stock Purchase Plan (US ESPP)
The US ESPP is normally available to all employees based in the US. Employees can elect to save up to $8,000 per year,
deducted from their post-tax salary, for a 12-month period. The savings are then used to purchase shares at an effective 15 per
cent discount to the prevailing market share price at the end of the savings period (the discount being funded by the Company).
Global All-Employee Share Purchase Plan (GAESPP)
The GAESPP is normally available to employees in countries other than the UK and US, on a share-settled or cash-settled basis,
depending on local regulations. Employees can elect to save funds, deducted from their post-tax salary, for a 12-month period.
In the share-settled model, these savings are then used to purchase shares at an effective 15 per cent discount to the prevailing
market share price at the end of the savings period (the discount being funded by the Company); in the cash-settled model,
these savings are then returned to the participant, along with an additional cash enhancement equal to a 15 per cent discount
to the prevailing market share price at the end of the savings period, had the funds been used to purchase Spirent shares
(the enhancement being funded by the Company).
Employees participating in the GAESPP during the period under review included those based in Canada, France, Germany,
China, Hong Kong, India, Spain, Japan and South Korea.
31. Share-based payment
2024 | 2023 | |
$ million | $ million | |
| Charged to adjusting items | ||
Spirent Long-Term Incentive Plan 1 | 9.5 | 7.2 |
Spirent All-Employee Share Purchase Plans (ESPP) 2 | 0.1 | 0.4 |
9.6 | 7.6 | |
| Charged to administration expenses | ||
Executive deferred bonus plan | 0.5 | 0.1 |
10.1 | 7.7 |
Notes
1. 2024 includes $0.4 million (2023 $0.2 million) relating to cash-settled schemes.
2. 2024 includes nil (2023 $0.2 million) relating to cash-settled schemes.
All schemes are primarily equity-settled with elements cash settled pursuant to local legislation.
In 2024, $0.5 million (2023 $0.1 million) being one-third of the Executive Directors’ Annual Incentive has been deferred into
shares for an additional period of three years. This amount has been charged to administration expenses in the income
statement and is included within adjusted operating profit as it reflects part of the underlying trading performance of the Group.
FINANCIAL STATEMENTS
168 Spirent Communications plc Annual Report 2024
31. Share-based payment continued
7.5 million share incentives were granted during 2024 (2023 6.2 million). The fair value of share incentives has been estimated
as at the date of grant using the Black-Scholes binomial model. The following table gives the assumptions made in arriving at
the share-based payment charge and the fair value:
2024 | 2023 | |
Weighted average share price (pence) | 178.0 | 178.7 |
Weighted average exercise price (pence) | 0.0 | 0.0 |
Weighted average fair value (pence) | 171.1 | 171.7 |
Expected volatility (%) | 40.3-59.9 | 31.3-40.3 |
| Option life (years): | ||
– Performance Shares | 1.0-3.0 | 1.0-3.0 |
– Options and SARs | 10.0 | 10.0 |
Risk free rate (%) | 3.89-4.93 | 3.30-5.15 |
Dividend yield (%) | 2.0 | 2.0 |
The expected volatility was determined by calculating the historical volatility of the Company’s share price over the previous two
years which management considers to be the period which is likely to be most representative of future volatility. The risk free rate
is calculated by reference to UK government bonds.
32. Reconciliation of profit before tax to cash generated from operations
2024 | 2023 | |
$ million | $ million | |
Profit before tax | 13.8 | 22.9 |
| Adjustments for: | ||
Finance income | (4.5) | (5.4) |
Finance costs | 1.0 | 0.9 |
Intangible asset amortisation | 5.2 | 5.1 |
Depreciation of property, plant and equipment | 8.5 | 10.5 |
Depreciation of right-of-use assets | 6.7 | 6.9 |
Impairment of property, plant and equipment | — | 0.4 |
Impairment of right-of-use assets | — | 2.5 |
Share-based payment | 10.1 | 7.7 |
| Changes in working capital: | ||
Decrease/(increase) in inventories | 7.8 | (2.0) |
(Increase)/decrease in receivables | (5.2) | 27.7 |
Increase/(decrease) in payables | 16.2 | (29.9) |
Decrease in contract liabilities | (1.8) | (0.7) |
Decrease in provisions | (1.0) | (0.4) |
| Defined benefit pension plan employer contributions net of plan administration expenses paid | ||
by the plan | 0.9 | (1.7) |
Deferred compensation plan | 0.8 | 1.9 |
Non-cash movements | (1.5) | (0.6) |
Cash flow from operations | 57.0 | 45.8 |
FINANCIAL STATEMENTS
169Spirent Communications plc Annual Report 2024
Notes to the consolidated financial statements continued
33. Business combinations
There were no business combinations in 2024.
On 8 September 2023, the Group completed the asset purchase of a small Test Lab Automation business carve-out from
NetScout Inc. for a final cash consideration of $7.8 million. The transaction was funded by surplus cash in the Group. The
business carve-out from NetScout acquired by Spirent is a US-based technology business that develops and manufactures
Layer-1 switches and control software.
| 2023 | |||
| $ million | |||
| Fair value | |||
| Book value | adjustment | Fair value | |
Intangible assets | — | 4.3 | 4.3 |
Property, plant and equipment | 0.2 | — | 0.2 |
Inventories | 1.4 | — | 1.4 |
Contract liabilities | (2.0) | — | (2.0) |
Total identifiable net assets | (0.4) | 4.3 | 3.9 |
Goodwill on acquisition | 3.9 | ||
Total consideration | 7.8 | ||
Satisfied by Cash consideration | 7.8 | ||
| Cash flows | |||
Cash consideration | 7.8 |
The fair values of the identifiable net assets acquired are set out in the table above. The fair value adjustments arose in relation
to the recognition of acquired intangible assets. The intangible assets acquired represent current technology and customer
relationships. These intangible assets have been assigned a useful life of six years. The goodwill arising of $3.9 million consists
largely of the synergies and commercial opportunities expected from the combination, together with intangible assets not
qualifying for separate recognition, such as workforce in place. Direct acquisition related costs of $0.4 million and $0.3 million
of integration costs have been expensed to other adjusting items within the income statement in 2023 (note 5). From the date of
acquisition to 31 December 2023, NetScout acquired business contributed $4.1 million of revenue and $2.1 million of profit
before tax to the results of the Group before charging $0.4 million of direct acquisition related costs, $0.3 million of integration
costs and $0.2 million of acquired intangible asset amortisation.
34. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation
and are not disclosed in this note.
2024 | 2023 | |
$000 | $000 | |
Short-term employee benefits | 3,959.3 | 2,639.1 |
Share-based payment | 394.9 | 850.6 |
4,354.2 | 3,489.7 |
FINANCIAL STATEMENTS
170 Spirent Communications plc Annual Report 2024
Parent Company balance sheet
At 31 December 2024
2024 2023
Notes £ million £ million
Fixed assets
Intangible assets 4 3.1 3.2
Tangible assets 5 1.3 1.2
Right-of-use assets 6 1.1 1.3
Investments 7 512.7 491.1
518.2 496.8
Current assets
Stocks 8 8.1 8.5
Debtors: amounts falling due within one year 9 29.4 30.0
Debtors: amounts falling due after more than one year 9 1.4 7.5
Cash at bank and in hand 42.7 30.3
81.6 76.3
Creditors: amounts falling due within one year 10 (132.9) (124.3)
Net current liabilities (51.3) (48.0)
Total assets less current liabilities 466.9 448.8
Creditors: amounts falling due after more than one year 11 (3.3) (3.2)
Defined benefit pension plan deficit 3 (0.4) (1.7)
Net assets 463.2 443.9
Capital and reserves 17
Called up share capital 19.3 19.3
Share premium account 20.2 20.2
Capital redemption reserve 14.2 14.2
Profit and loss account 409.5 390.2
Shareholders’ funds – equity 463.2 443.9
The Company has taken advantage of the exemption under Section 408 of the Companies Act 2006 from presenting its own
profit and loss account. In 2024, the profit for the year amounted to £15.6 million (2023 £150.8 million).
The notes on pages 173 to 190 form part of these financial statements.
Signed on behalf of the Board
Paula Bell
Director
4 March 2025
FINANCIAL STATEMENTS
171Spirent Communications plc Annual Report 2024
Parent Company statement of changes in equity
Attributable to the equity holders
of the parent Company £ million
Notes
Called up
share
capital
Share
premium
account
Capital
redemption
reserve
Profit
and loss
account
Total
equity
At 1 January 2023 20.4 20.2 13.1 330.5 384.2
Profit for the year — — — 150.8 150.8
Other comprehensive losses
1
— — — (3.2) (3.2)
Total comprehensive income — — — 147.6 147.6
Share-based payment — — — 6.0 6.0
Tax charge on share incentives —————
Share repurchase 17 (1.1) — 1.1 (56.7) (56.7)
Equity dividends 16 — — — (37.2) (37.2)
At 1 January 2024 19.3 20.2 14.2 390.2 443.9
Profit for the year — — — 15.6 15.6
Other comprehensive losses
2
— — — (4.1) (4.1)
Total comprehensive income — — — 11.5 11.5
Share-based payment — — — 7.9 7.9
Tax credit on share incentives —————
Employee share ownership trust 17 — — — (0.1) (0.1)
Share repurchase —————
Equity dividends 16 —————
At 31 December 2024 19.3 20.2 14.2 409.5 463.2
Notes
1. The amount included in other comprehensive losses for 2023 of £3.2 million represents re-measurement losses on the net defined benefit pension asset
of £23.5 million, net of a tax credit of £7.6 million.
2. The amount included in other comprehensive losses for 2024 of £4.1 million represents re-measurement losses on the net defined benefit pension asset
of £3.6 million, net of a tax credit of £0.5 million.
The notes on pages 173 to 190 form part of these financial statements.
FINANCIAL STATEMENTS
172 Spirent Communications plc Annual Report 2024
Notes to the parent Company financial statements
1. Material accounting policies
Corporate information
Spirent Communications plc (the “Company”) is a public limited company incorporated and domiciled in England and Wales
(registration number 470893). The registered address of the Company is Origin One, 108 High Street, Crawley, West Sussex
RH10 1BD, United Kingdom.
Basis of accounting
The financial statements have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 101 “Reduced Disclosure
Framework” (FRS 101) and the Companies Act 2006.
In preparing these financial statements, the Company has set out below the FRS 101 disclosure exemptions that have been
taken in respect of the following disclosures:
• a cash flow statement and related notes;
• comparative period reconciliations for share capital, tangible assets and intangible assets;
• disclosures in respect of transactions with wholly owned subsidiaries;
• disclosures in respect of capital management;
• the effects of new but not yet effective IFRS; and
• disclosures in respect of the compensation of key management personnel.
As the consolidated financial statements include the equivalent disclosures, the Company has also taken the exemptions under
FRS 101 available in respect of the following disclosures:
• IFRS 2 “Share-based Payment” in respect of Group-settled share-based payments;
• certain disclosures required by IAS 36 “Impairment of Assets” in respect of the impairment of goodwill and indefinite life
intangible assets; and
• the disclosures required by IFRS 7 “Financial Instruments Disclosures” and IFRS 13 “Fair Value Measurement” regarding
financial instrument disclosures have not been provided apart from those which are relevant for the financial instruments
which are held at fair value.
As the Company is included in the consolidated financial statements, made up to 31 December each year, it is not required to
present a separate profit and loss account as provided by Section 408 of the Companies Act 2006. Information on fees for
non-audit services in respect of the parent Company accounts have not been disclosed as the Company prepares Group
accounts which disclose information on fees for non-audit services on a consolidated basis.
Accounting convention
The financial statements are prepared on a historical cost basis apart from certain financial instruments that have been
measured at fair value, and the defined benefit pension asset/liability which has been measured using the projected unit
credit method.
Going concern basis of accounting
In adopting the going concern basis for preparing the financial statements, the Directors have considered the Company’s
principal risks and uncertainties as set out on pages 55 to 60.
The Directors have also considered sensitivities in respect of potential downside scenarios, including stress testing the latest cash
flow projections that cover a period of 12 months from the date of approval of these financial statements. In these scenarios, the
Company has more than sufficient headroom in its available resources.
The Directors have reviewed the detailed financial projections for the period ending 31 December 2025, as well as the business
plan and cash flows for the three months ending 31 March 2026. The Directors have also considered the period to the end of
2027 which forms part of the Company’s longer-term viability assessment. In addition, they have considered the principal risks
faced by the Company, the sensitivity analysis and the Company’s significant financial headroom and are satisfied that the
Company has adequate financial resources to continue in operational existence for the foreseeable future, a period of at least
12 months from the date of approval of this report. Accordingly, the going concern basis of accounting continues to be used in
the preparation of the financial statements.
New accounting standards
There have been no applicable new standards, amendments to standards and interpretations effective from 1 January 2024
that have been applied by the Company which have resulted in a significant impact on its results or financial position.
FINANCIAL STATEMENTS
173Spirent Communications plc Annual Report 2024
Notes to the parent Company financial statements continued
1. Material accounting policies continued
Business combinations and goodwill
A business combination is a transaction or other event in which an acquirer obtains control of one or more businesses. Business
combinations are accounted for using the acquisition method.
At acquisition date, the identifiable assets acquired and liabilities assumed, including intangible assets, are measured at their fair
values. The cost of an acquisition is measured as the aggregate of the consideration transferred and the amount of any
non-controlling interest in the acquiree.
Goodwill arising on the acquisition of a business, representing the excess of cost over the net fair value of the net assets acquired,
is capitalised as an intangible asset. Goodwill is carried at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill is allocated to the related cash-generating units monitored by management.
Where the recoverable amount of the cash-generating unit is less than its carrying amount, including goodwill, an impairment
loss is recognised in the profit and loss account.
The UK Companies Act requires goodwill to be reduced by provisions for amortisation on a systematic basis over a period
chosen by the Directors, its useful economic life. However, under IFRS 3 “Business Combinations” goodwill is not amortised.
Consequently, the Company does not amortise goodwill but reviews it for impairment on an annual basis or whenever there are
indicators of impairment. The Company is therefore invoking a “true and fair view override” to overcome the prohibition on the
non-amortisation of goodwill in the Companies Act.
Had the Company amortised goodwill a period of 20 years would have been chosen as the useful life for goodwill. There would
have been an impact of £0.1 million (2023 £0.1 million) to profit in the year had goodwill been amortised.
Intangible assets
Intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses. Separately identifiable
intangible assets such as current technology are capitalised on the balance sheet only when the value can be measured reliably,
or the intangible asset is purchased as part of the acquisition of a business. Such intangible assets are amortised over their
useful economic lives on a straight-line basis. The carrying value of intangible assets is reviewed for impairment if events or
changes in circumstances indicate the carrying value may not be recoverable. Acquired intangible assets, being current
technology, are amortised on a straight-line basis over their estimated useful lives and the charge is included within the profit
and loss account.
The estimated useful life of the current technology intangible asset is five years and the expiry date is 2024.
Product development
Research expenditure is recorded as a product development cost in the year in which it is incurred. Intangible assets arising on
the Company’s various product development projects are recognised only if the recognition criteria of IAS 38 “Intangible Assets”
are met.
Development costs are expensed as incurred until the technological feasibility of the product under development has been
established. Technological feasibility in Spirent’s circumstances occurs when there is an expectation that the proposed product
will be successfully implemented. After technological feasibility is established, costs are capitalised and amortised on a straight-
line basis over the estimated useful life.
Tangible assets
Tangible assets are stated at cost less accumulated depreciation and accumulated impairment. Depreciation is not provided on
freehold land. Depreciation is provided to write-off the cost less estimated residual value of all other assets, over their estimated
useful lives, on a straight-line basis at rates which take into account commercial conditions at their location. Usual asset lives are
as follows:
Freehold buildings 50 years
Plant and machinery 3 to 8 years
Fixtures, fittings and equipment:
– Building installations 20 years or lease period if lower
– Fittings and equipment 3 to 8 years
– Motor vehicles 3 to 5 years
– Business systems software 4 years
Business systems software is capitalised as tangible assets as the software is an integral part of the related hardware.
The carrying values of tangible assets are reviewed for impairment if events or changes in circumstances indicate that the
carrying value may not be recoverable.
FINANCIAL STATEMENTS
174 Spirent Communications plc Annual Report 2024
1. Material accounting policies continued
Impairment of assets
Intangible assets with finite useful lives and tangible assets and right-of-use assets are tested for impairment at each reporting
date where there is an indication that an asset may be impaired. Goodwill with an indefinite useful life is assessed at least
annually. When an impairment test is performed, the recoverable amount is assessed by reference to the higher of the net
present value of the expected cash flows (value in use) of the relevant cash-generating unit or asset and the fair value less cost of
disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying
amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable
amount. Impairment losses are recognised in the profit and loss account in those expense categories consistent with the function
of the impaired asset.
Where an impairment loss has been recognised against an asset, it may be reversed in future periods where there has been
a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised, but
only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, had no impairment loss been recognised in prior years. Such a reversal is recognised in the profit
and loss account. This does not apply for goodwill, for which an impairment loss must not be reversed in any circumstances.
Investments
Investments in subsidiaries are stated at cost and reviewed for impairment if there are indications that the carrying value may
not be recoverable.
Leases
The Company assesses whether a contract is or contains a lease, at inception of a contract. A contract is, or contains, a lease if
the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it
is the lessee at the commencement date of the lease (i.e. the date the underlying asset is available for use), except for short-term
leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets. For these leases, the Company
recognises the lease payments within the profit and loss account on a straight-line basis over the period of the lease.
At the commencement date of the lease, the lease liability is initially measured at the present value of lease payments to be
made over the lease term, discounted using the rate implicit in the lease. If this rate cannot be readily determined, the Company
uses its incremental borrowing rate. Under the modified retrospective transition method, which is the method the Company
adopted on transition to IFRS 16 “Leases” on 1 January 2019, lease liabilities are required to be discounted using the incremental
borrowing rate at date of transition. The Company has set the discount rate based upon the local base rate with an additional
premium to reflect various factors such as credit risk.
The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable,
variable lease payments that depend on an index or rate, and amounts expected to be paid under residual value guarantees.
The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company
and payments of penalties for terminating a lease, if the lease term reflects the Company exercising the option to terminate. The
variable lease payments that do not depend on an index or a rate are recognised as an expense in the period on which the
event or condition that triggers the payment occurs.
The lease liability is presented within creditors in the balance sheet.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the
effective interest method), and by reducing the carrying amount to reflect the lease payments made. It is re-measured when
there is a change in future lease payments arising from a change in an index or rate, or if the Company changes its assessment
of whether it will exercise a purchase, extension or termination option.
When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-
use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the corresponding lease liability,
adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is
located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier
of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically
reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The right-of-use assets are presented as a separate line in the balance sheet.
Stocks
Stocks are valued at the lower of cost and estimated net realisable value, after provisions for obsolescence. Cost includes all
costs in bringing each product to its present location and condition, being the full manufacturing cost on a first-in, first-out basis,
including all attributable overheads based on a normal level of activity.
FINANCIAL STATEMENTS
175Spirent Communications plc Annual Report 2024
Notes to the parent Company financial statements continued
1. Material accounting policies continued
Provisions
Provisions are recorded when the Company has a present legal or constructive obligation as a result of a past event, for which it
is probable that it will be required to settle by an outflow of resources and for which a reliable estimate of the amount of the
obligation can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
Where the effect of the time value of money is material, the amount of the provision shall be the present value of the
expenditures expected to be required to settle the obligation.
Foreign currencies
The financial statements are presented in Pound Sterling, which is the Company’s functional and presentation currency.
Transactions in foreign currencies are initially recorded at the rates ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are retranslated at the rates ruling at the balance sheet date. All exchange gains
and losses are taken to the profit and loss account.
Financial instruments
Financial assets and liabilities are recognised on the Company’s balance sheet when it becomes a party to the contractual
provisions of the instrument.
Trade debtors
Trade debtors are non-interest bearing and are stated at original invoiced amount less an appropriate allowance for expected
credit losses. At each reporting date, the Company measures the loss allowance at an amount equal to the lifetime expected
credit losses.
The Company applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all trade debtors. Therefore, the Company does not track changes in credit risk, but instead recognises a loss
allowance based on lifetime expected credit losses at each reporting date. To measure the expected credit losses, the Company
has established a provision matrix that is based on shared credit risk characteristics and the days past due based on the
expected loss rates.
The provision matrix is initially based on payment profiles of trade debtors over a period of 12 months before 31 December of
the prior year and the corresponding historical credit losses experienced within this period. At every reporting date the historical
observed default rates are updated. The Company also considers the impact of regional macroeconomic factors on the
likelihood of future losses.
Trade debtors are written off when there is no reasonable expectation of recovery.
A default on a trade debtor occurs when the debtor fails to make contractual payments when they fall due.
Cash at bank and in hand
Cash at bank and in hand in the balance sheet comprises cash at bank and in hand and short-term deposits which have an
original maturity of three months or less. There are no bank overdrafts.
Trade creditors
Trade creditors are non-interest bearing and are stated at the original invoiced amount.
Loans and borrowings
Loans and borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition,
loans and borrowings are stated at amortised cost using the effective interest method, and in respect of financial assets, less any
impairment losses.
Impairment losses are based on lifetime expected credit losses.
Equity instruments
Equity instruments are recorded at the proceeds received, net of direct issue costs. Spirent Communications plc Ordinary Shares
held by the Company are classified in equity as treasury shares and are recognised at cost and included as a deduction from
the profit and loss account reserve. Consideration received for the sale of such treasury shares is also recognised in equity.
Derivative financial instruments
The Company uses forward foreign currency exchange contracts to manage exposures arising on receipts and payments in
foreign currencies relating to firm commitments.
Forward foreign currency exchange contracts are initially recognised at fair value on the date on which the contract is entered
into, and are subsequently re-measured to fair value at each reported balance sheet date. The fair value of forward foreign
currency exchange contracts is calculated by reference to current forward exchange rates for contracts with similar maturity
profiles. The Company has not adopted the hedge accounting rules. Consequently all gains and losses arising from changes in
fair value are taken to the profit and loss account.
FINANCIAL STATEMENTS
176 Spirent Communications plc Annual Report 2024
1. Material accounting policies continued
Pensions
The Company operates two funded defined benefit pension plans. All other pension plans are defined contribution in nature
where the amount charged to the profit and loss account is the employer’s contributions paid or payable during the year.
For defined benefit pension plans, full actuarial valuations are carried out every three years using the projected unit credit
method, and updates are performed at each balance sheet date. Re-measurement, comprising actuarial gains and losses,
the effect of changes to the asset ceiling (if relevant) and the return on plan assets (excluding interest), is reflected immediately
in the balance sheet surplus with a charge or credit recognised in other comprehensive income in the period in which they occur.
Re-measurement recognised in other comprehensive income will not be reclassified to profit or loss. Past service cost is
recognised in profit or loss in the period of plan amendment. Net interest is calculated by applying the discount rate at the
beginning of the period to the net defined benefit pension asset, taking account of any changes in the net defined benefit
pension asset during the period as a result of contribution and benefit payments. Where a refund of a surplus is expected,
any applicable taxes that are not income in nature are netted off. Defined benefit pension costs are categorised as:
• service cost (including current service cost, past service cost and gains and losses on curtailments or settlements);
• net interest expense or income; and
• re-measurement.
The Company presents the first two components of defined benefit pension costs in profit or loss.
Revenue
Revenue represents the transfer of promised products or services to customers in an amount that reflects the consideration
to which the Company expects to be entitled in exchange for those products or services.
Revenue from product sales of hardware and perpetual software licences is recognised at the point in time when the customer
has obtained control of the products sold. This is usually when the products have been delivered in accordance with the
contractual terms. In some instances it is not until acceptance has occurred that control of the asset is transferred to the
customer. Terms of acceptance are dependent upon the specific contractual arrangement agreed with the customer. If it can be
objectively determined that control has been transferred to the customer in accordance with the agreed contract specifications,
customer acceptance is a formality that would not affect the determination of when the customer has obtained control of the
products. However, if it cannot be objectively determined that the products delivered are in accordance with the agreed-upon
contract specifications, revenue would not be recognised until customer acceptance has been granted.
For sales of software licences, the Company determines whether the licence is capable of being distinct and is separately
identifiable from other promises in the context of the contract. Revenue from software subscription licences that provide the
customer with a right to access the Company’s intellectual property throughout the subscription period is recognised over time,
throughout the subscription period. Revenue from perpetual software licences that provide the customer with a right to use the
Company’s intellectual property for an indefinite period of time is recognised at the point in time when the customer can first use
and benefit from the software.
For the sale of services, revenue is generally recognised over time with reference to when or as the performance obligations are
satisfied by transferring the service to the customer. Revenue from support and maintenance service contracts and software
subscription sales is recognised over the period of performance on a straight-line basis.
Revenue from professional services is generally recognised as work progresses in accordance with agreed-upon contractual
terms, based on a measure of progress towards complete satisfaction of the performance obligation. Progress is measured
using either an output method (e.g. completion of a day, or for fixed price contracts revenue is recognised based on performance
completed or contractual milestones reached) or an input method (e.g. actual cost of services provided as a proportion of total
cost of services expected to be provided under the contract). Where applicable, the Company elects to use the practical expedient
where revenue can be recognised in the amount to which the Company has a right to invoice, only if the Company has a right to
consideration from a customer in an amount that corresponds directly with the value to the customer of the Company’s performance
completed to date. Where the Company’s professional services contracts contain terms of acceptance, revenue would not be
recognised until customer acceptance had been obtained. Where the professional service has a pre-determined or fixed output
deliverable, revenue is recognised at a point in time once the performance obligation has been satisfied and the customer has
received the agreed deliverable.
The Company accounts for multi-component orders as multiple performance obligations if the following criteria are met:
a) the good or service is capable of being distinct, that is, they are individually readily available and regularly sold separately
to customers; and
b) the promise to transfer the goods or services is distinct in the context of the contract, that is, they do not require significant
integration, customisation or modification with other goods or services in the contract and are not highly interrelated or
interdependent of other goods or services in the contract.
FINANCIAL STATEMENTS
177Spirent Communications plc Annual Report 2024
Notes to the parent Company financial statements continued
1. Material accounting policies continued
Revenue continued
For multi-component orders where the elements are accounted for as multiple performance obligations, the transaction price
and discount, if any, are allocated proportionally to all performance obligations in the contract. If either of the two criteria above
are not met, and where various components in the contract are combined, bundled or pre-assembled into one or more product
or equipment units to form a distinct goods or services, they will be accounted for as a single performance obligation.
Cost of sales
The Company’s cost of sales related to the sale of its products includes materials, payments to third party contract
manufacturers, royalties and salaries and other expenses related to its manufacturing and supply operations personnel. Cost of
sales related to the provision of services includes salaries and other expenses associated with technical support services and the
cost of extended maintenance services.
Costs to obtain a contract
The incremental costs of obtaining a contract with a customer are capitalised as an asset if the Company expects to recover
them. The Company incurs costs such as sales commissions when it enters into a new contract. Such costs are presented within
debtors in the balance sheet as assets recognised from costs to obtain a contract where the related revenue is recognised over
time, usually in relation to support and subscription agreements. These assets are amortised on a systematic basis consistent
with how the related revenue is recognised.
The Company applies the practical expedient in paragraph 94 of IFRS 15 and recognises incremental costs of obtaining a
contract as an expense when incurred if the amortisation period of the asset that the Company would otherwise have
recognised is one year or less.
Management is required to determine the recoverability of assets recognised from costs to obtain a contract. At each reporting
date, the Company determines whether or not the assets are impaired by comparing the carrying amount of the asset to the
remaining amount of consideration that the Company expects to receive less the costs that relate to providing services under the
relevant contract. No assets were impaired as at 31 December 2024 or 31 December 2023.
Deferred income
Deferred income is only recognised on non-cancellable contracts that provide unconditional rights to payment from the
customer for products and services that the Company has not yet completed providing or that it will provide in the near future.
Revenue from product sales of hardware and perpetual software licences is recognised at the point in time when the customer
has obtained control of the products sold. In the instances where the customer has been invoiced and revenue from hardware
or perpetual software licences is unable to be recognised, revenue would not be recognised until control has passed, resulting in
deferred income.
Support services and software subscription agreements are generally billed at commencement of the support or subscription
contract, while revenue is recognised over the period of the support or subscription agreement, resulting in deferred income.
The Company occasionally receives advance payments from customers on account, before products or services are delivered
and revenue is recognised, resulting in liabilities. Deferred income and payments received on account are reported as contract
liabilities within creditors on the balance sheet on a contract-by-contract basis at the end of each reporting period.
Government grants
A government grant is recognised in the balance sheet initially within creditors when there is reasonable assurance that it will be
received and that the Company will comply with the conditions attached to it. Grants that compensate the Company for expenses
incurred are recognised as other operating income on a systematic basis in the same periods in which expenses are incurred.
Employee benefits
When an employee has rendered service to the Company during an accounting period, short-term benefits expected to be paid
in exchange for that service are recognised in the same accounting period.
Share-based payment
The Company operates various equity-settled share-based compensation plans and accounts for these awards in accordance
with IFRS 2 “Share-based Payment”.
The fair value of these awards is recognised in the profit and loss account (or as an addition to the cost of investment in the
subsidiary in which the relevant employees work) on a straight-line basis over the vesting period together with a corresponding
change in equity. The fair value is measured using the Black-Scholes model by reference to the share price, and taking into
account the terms and conditions of the award, excluding non-market vesting conditions, at the date the awards were granted.
The charge is reassessed at each balance sheet date to reflect the expected and actual levels of vesting, due to achievement or
otherwise of non-market conditions. Awards where vesting is conditional upon satisfying a market condition or non-vesting
condition are treated as vesting irrespective of whether the market or non-vesting condition has been satisfied.
The Company has an employee share trust for the granting of certain share incentives to employees. Shares in the Company
held by the employee share trust are treated as treasury shares and presented in the balance sheet as a deduction from equity.
Awards are capitalised as an investment, where a subsidiary is receiving the employee service and a corresponding adjustment
to equity in the parent Company.
FINANCIAL STATEMENTS
178 Spirent Communications plc Annual Report 2024
1. Material accounting policies continued
Tax
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the profit and loss
account except to the extent that it relates to items in other comprehensive income or equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at
the balance sheet date, and any adjustments to tax payable for previous years.
Deferred tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying
amounts in the financial statements, with the following exceptions:
• where the temporary difference arises from the initial recognition of goodwill (taxable temporary differences only) or of an
asset or liability in a transaction that is not a business combination that at the time of the transaction affects neither accounting
nor taxable profit or loss; and
• in respect of taxable temporary differences associated with investments in subsidiaries where the timing of the reversal of
the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the
foreseeable future.
A deferred tax asset is recognised only to the extent that it is probable that taxable profits will be available against which the
deductible temporary differences, carried forward tax credits or tax losses can be utilised.
Deferred tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the
related asset is realised or the liability is settled, based on tax rates and laws enacted or substantively enacted at the balance
sheet date.
Dividends paid
The interim dividend is included in the financial statements in the period in which it is paid, and the final dividend and special
dividend in the period in which it is approved by the shareholders at an Annual General Meeting.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements requires the Company to make estimates and assumptions that affect items reported.
Such estimates and assumptions are based on management’s best knowledge of current facts, circumstances and future events.
Actual results may differ, possibly significantly, from those estimates. The areas requiring a high degree of judgement are
revenue recognition and defined benefit pension plans (see Group Accounting Policies). There are no critical accounting
estimates. Please refer to note 2 of Notes to the consolidated financial statements on pages 131 to 140 for detailed disclosures.
2. Employees
Please refer to the Report on Directors’ Remuneration on pages 83 to 108 and note 34 of Notes to the consolidated financial
statements on page 170 for disclosures relating to the emoluments, share incentives and Long-Term Incentive interests and
pensions of the Directors.
The average number of people employed by the Company during the year was:
2024 2023
Number Number
Assembly 48 47
Product development 69 79
Selling and marketing 57 70
Administration 48 43
222 239
Employee benefit costs were:
2024 2023
£ million £ million
Remuneration 20.9 21.9
Social security costs 2.6 2.6
Pension and other related costs 3.1 2.6
Expense of share-based payment 1.6 0.6
28.2 27.7
FINANCIAL STATEMENTS
179Spirent Communications plc Annual Report 2024
Notes to the parent Company financial statements continued
3. Pensions
Defined benefit plans
i) Characteristics and risks associated with the Plans
The Company sponsors two funded defined benefit pension plans in the United Kingdom: the Spirent Communications plc Staff
Pension & Life Assurance Plan (“Staff Plan”) and the Spirent Communications plc Retirement Cash & Life Assurance Plan (“Cash
Plan”). These plans are funded and have full UK HM Revenue & Customs (“HMRC”) tax-exempt approval. Both schemes are
administered by a Trustee board which is comprised of representatives from the employer, member nominated Trustees and an
independent Trustee. The Trustee board operates in accordance with the Trust Deed and Rules of each Plan and acts in the
interests of all of its members.
• The Staff Plan is the Company’s most significant plan, and it provides its members with retirement benefits based on their final
salary and length of service. The Staff Plan is closed to new entrants.
• The Cash Plan is complicated with multiple cohorts that allows members to benefit from a lump sum on retirement, a defined
benefit contribution with a defined benefit underpin or pension. The Cash Plan is closed to new entrants.
There is also a UK unfunded plan, which consists of a contractual obligation for the Company to top up certain former
employees’ benefits whose salaries exceeded the statutory earnings cap.
As with the vast majority of similar arrangements in the United Kingdom, the Company ultimately underwrites the risks relating
to the defined benefit plans. These risks include investment risks and demographic risks, such as the chance of members living
longer than expected.
The Cash Plan holds a significant proportion of its assets in equity. Strong future equity returns would be expected to reduce the
Company’s future cash contributions (and vice versa).
The latest triennial actuarial valuations dated 31 March 2021 indicated a combined funding deficit of £11.5 million, calculated
on a technical provisions basis using more prudent assumptions than the accounting valuation, particularly in relation to the
discount rate inflation and demographic. A deficit reduction plan was agreed with the Trustees which required the Company to
pay monthly contributions of £449,609, whilst a funding deficit remains, increasing in line with CPI each year. In September
2022, this deficit funding plan was suspended whilst the Company and Trustees worked together to consider the feasibility of
purchasing a bulk annuity insurance policy.
In October 2022, the Trustees, with the Company’s support, purchased a bulk annuity insurance policy from specialist UK insurer
Pension Insurance Corporation (PIC), in respect of the largest plan, the Staff Plan. The premium was met from the plan’s assets
and sufficient assets remain to meet the plan’s ongoing costs. This pension buy-in secures an insurance asset from PIC that
matches the remaining pension liabilities of the Staff Plan, such that the Company no longer bears any investment, inflation,
longevity or other demographic risks. Following the purchase of the bulk annuity insurance policy, the Company does not expect
to make any further cash contributions to this plan. Cash contributions to the plan in 2024 were nil (2023 nil).
Following a detailed data cleansing process and payment of the final top-up premium to PIC, the wind-up of the Staff Plan
was initiated in November 2024. The Company has determined that following this step it no longer has an unequivocal right
to the surplus, as the Trustees have discretion to use part, or all, of the surplus to enhance members’ benefits without requiring
Company approval. As a result, for the purposes of these disclosures, the Staff Plan surplus has been restricted to nil at the
year-end. The Trustees are currently in the process of informing members of the wind up and the Company’s expectation is that
the Trustees will pay the bulk of the surplus to the Company, net of any tax due, once all wind-up expenses have been met.
ii) Amounts in the financial statements
The assets and liabilities on the balance sheet are as follows:
2024 2023
£ million £ million
Schemes in net asset position
UK defined benefit pension plan – Staff Plan — 10.1
UK defined benefit pension plan – Cash Plan 0.4 —
0.4 10.1
Withholding tax payable — (3.5)
0.4 6.6
Schemes in net liability position
UK defined benefit plan – Cash Plan — (1.3)
UK unfunded plan (0.4) (0.4)
(0.4) (1.7)
Net pension plan surplus on the balance sheet — 4.9
FINANCIAL STATEMENTS
180 Spirent Communications plc Annual Report 2024
3. Pensions continued
Defined benefit plans continued
ii) Amounts in the financial statements continued
a) The assets and liabilities in each plan
2024 2023
£ million £ million
Staff Plan
Unquoted
– Insured annuities 1.1 1.2
– Cash and other 8.5 14.0
Insurance policy with PIC 124.0 131.8
Fair value of plan assets 133.6 147.0
Present value of defined benefit pension plan obligations (126.1) (136.9)
Surplus in the plan 7.5 10.1
Impact on asset ceiling (7.5) —
Withholding tax payable — (3.5)
Surplus in the plan on the balance sheet — 6.6
Cash Plan
Quoted:
– Equities 5.3 4.7
– Government bonds 1.2 1.5
Unquoted:
– Cash and other 1.6 1.5
Fair value of plan assets 8.1 7.7
Present value of defined benefit pension plan obligations (7.7) (9.0)
Surplus/(deficit) in the plan 0.4 (1.3)
Total net surplus recognised 0.4 5.3
Unfunded plan
Present value of unfunded obligations (0.4) (0.4)
Net pension plan surplus on the balance sheet — 4.9
These funds have a wide investment remit and as such the investments of the funds may or may not be listed on recognised
exchanges and markets and will be without restriction as to geographical, industrial or sectoral exposure. These funds may take both
long and short positions and may utilise a broad range of derivatives. The funds’ investments may include sub-investment grade
securities, corporate debt securities, gilts, sale and repurchase agreements, loans, and emerging markets debt and currencies.
The plans are prohibited from investing in Spirent’s own financial instruments.
The fair values of the quoted equity and debt instruments are determined based on quoted market prices in active markets
whereas the fair values of the other assets are not. Unquoted investments are included at values provided by the fund managers
and are generally valued using recent market data and external sources, with a hierarchy that follows the principles of IFRS 13
“Fair Value Measurement”.
For the purposes of the following disclosures, the Staff Plan and Cash Plan have been combined as the Cash Plan is immaterial
to these financial statements.
b) Analysis of the amounts charged/(credited) to the profit and loss account
2024 2023
£ million £ million
Non-Investment Plan administration expenses 1.0 —
Current service cost — —
Amount charged to operating costs 1.0 —
Net interest on the net defined benefit pension surplus (0.5) (0.5)
Net charge/(credit) to the profit and loss account 0.5 (0.5)
FINANCIAL STATEMENTS
181Spirent Communications plc Annual Report 2024
Notes to the parent Company financial statements continued
3. Pensions continued
Defined benefit plans continued
ii) Amounts in the financial statements continued
c) Analysis of the amount recognised directly in the statement of comprehensive income
2024 2023
£ million £ million
Re-measurement loss on plans’ assets (8.5) (0.2)
Costs of managing plan assets paid by Company 0.5 (1.4)
Actuarial loss arising from experience (3.2) (1.3)
Actuarial gain arising from the demographic assumptions — 2.5
Actuarial gain/(loss) arising from changes in financial assumptions 11.6 (3.6)
Impact of asset ceiling (7.5) —
Withholding tax payable 3.5 0.8
Re-measurement of the net defined benefit pension surplus (3.6) (3.2)
d) Movements in the present value of funded defined benefit obligations
2024 2023
£ million £ million
At 1 January 145.9 146.1
Interest cost 6.4 6.8
Benefit payments (10.2) (9.4)
Actuarial loss arising from experience 3.2 1.3
Actuarial loss/(gain) arising from the demographic assumptions 0.1 (2.5)
Actuarial (gain)/loss arising from changes in financial assumptions (11.6) 3.6
Present value of funded defined benefit pension plans’ obligations 133.8 145.9
e) Movements in the fair value of plans’ assets
2024 2023
£ million £ million
At 1 January 154.7 157.0
Interest income on plans’ assets 6.7 7.3
Benefit payments (10.2) (9.4)
Non-Investment Plan administration expenses (1.0) —
Re-measurement loss on plans’ assets (8.5) (0.2)
Fair value of plans’ assets 141.7 154.7
Withholding tax payable — (3.5)
Fair value of plans’ assets less irrecoverable element of pension plan surplus 141.7 151.2
f) The key financial assumptions
The assumptions used for both plans using a weighted average were as follows:
2024 2023
% %
Inflation – RPI 3.2 3.1
Inflation – CPI (pre-2030) RPI less 1.0% pa RPI less 1.0% pa
Inflation – CPI (post-2030) RPI less 0.1% pa RPI less 0.1% pa
Rate of increase in pensionable salaries CPI CPI
Rate of increase for pensions in payment pre-2001 service 3.7 3.6
Rate of increase for pensions in payment 2001 to 5 April 2005 service 3.1 3.0
Rate of increase for pensions post-5 April 2005 service 2.1 2.1
Rate of increase in deferred pensions CPI CPI
Rate used to discount plan liabilities 5.4 4.5
The mortality assumptions are based on standard mortality tables which allow for future mortality improvements. The assumptions
are such that a member currently aged 65 (2023 aged 65) will live on average for a further 21.7 years (2023 21.7 years) if they
are a male and for a further 24.3 years (2023 24.2 years) if they are female. For a member who retires in 2044 (2023 in 2043) at
age 65 (2023 aged 65) the assumptions are that they will live on average for a further 23.3 years (2023 23.2 years) after
retirement if they are male and for a further 26.0 years (2023 25.8 years) after retirement if they are female.
FINANCIAL STATEMENTS
182 Spirent Communications plc Annual Report 2024
3. Pensions continued
Defined benefit plans continued
iii) Amount, timing and uncertainty of future cash flows
The approximate impact to past service liabilities of these changes to the main assumptions, which are considered reasonably
possible, is as follows:
• Reducing the discount rate by 0.1 per cent per annum would increase past service liabilities by £1.0 million (2023 £1.5
million).
• Increasing RPI inflation by 0.1 per cent would increase the plans’ liabilities by £0.3 million (2023 £0.5 million).
• Increasing the life expectancy of a member by one year (by modifying the standard mortality tables using an appropriate
scaling factor) would increase past service liabilities by £5.3 million (2023 £7.3 million).
The accounting valuation of the funded UK defined pension plans as at 31 December 2024 gave rise to a net surplus of £7.9
million (2023 £8.8 million). Future changes to the valuation assumptions noted above may cause material impacts to the
pension liability calculations, for example, the discount rate experienced a change of 3.0 per cent between 2024 and 2025.
There will also be an impact on the future service cost but given the small active population in these plans this is likely to be
insignificant. The sensitivity analysis may not be representative of the actual change as the changes in assumptions may not
occur in isolation.
The liability has the following duration and maturity.
2024 2023
Weighted average duration of the defined benefit obligation (years) 10 11
Maturity analysis of benefit payments (non-discounted amounts) (£ million)
Maturity ≤ 1 year 8.8 8.6
Maturity > 1 ≤ 5 years 36.4 36.3
Maturity > 5 ≤ 10 years 44.7 45.3
Maturity > 10 ≤ 20 years 74.7 77.3
Maturity > 20 ≤ 30 years 48.0 50.8
Maturity > 30 years 27.9 31.1
Defined contribution plans
The Company contributes to defined contribution pension plans for employees. Employer contributions for 2024 were
£1.8 million (2023 £1.8 million).
4. Intangible assets
£ million
Goodwill
Current
technology Total
Cost
1 January and 31 December 2024 7.5 0.8 8.3
Accumulated amortisation and impairment losses
At 1 January 2024 4.4 0.7 5.1
Amortisation for the year — 0.1 0.1
At 31 December 2024 4.4 0.8 5.2
Net book value at 31 December 2023 3.1 0.1 3.2
Net book value at 31 December 2024 3.1 — 3.1
The carrying value of goodwill has been tested by reference to the value in use of the Networks & Security CGU as identified in
the consolidated financial statements; please refer to note 13 of Notes to the consolidated financial statements on pages 153 to
155 for detailed disclosures. No impairment of goodwill was required.
The goodwill arose on the acquisition of the Positioning business and on the acquisition of Integrated Navigation Systems
Limited in 2019, both within the Networks & Security CGU.
FINANCIAL STATEMENTS
183Spirent Communications plc Annual Report 2024
Notes to the parent Company financial statements continued
5. Tangible assets
£ million
Freehold
land and
buildings
Plant and
machinery
Fixtures,
fittings and
equipment Total
Cost
At 1 January 2024
0.7 4.7 1.5 6.9
Additions — 0.6 — 0.6
Disposals — (0.4) (0.1) (0.5)
At 31 December 2024 0.7 4.9 1.4 7.0
Accumulated depreciation and impairment
At 1 January 2024
0.4 3.9 1.4 5.7
Depreciation charge for the year 0.1 0.2 0.1 0.4
Disposals — (0.3) (0.1) (0.4)
At 31 December 2024 0.5 3.8 1.4 5.7
Net book value at 31 December 2023 0.3 0.8 0.1 1.2
Net book value at 31 December 2024 0.2 1.1 — 1.3
6. Right-of-use assets
The Company leases office buildings.
Land and
buildings
£ million
Cost, net of accumulated depreciation and accumulated impairment
At 1 January 2023 1.6
Additions —
Depreciation charge for the year (0.3)
At 1 January 2024 1.3
Additions —
Depreciation charge for the year (0.2)
At 31 December 2024 1.1
At 31 December 2023
Cost 2.5
Accumulated depreciation and accumulated impairment (1.2)
Net carrying amount 1.3
At 31 December 2024
Cost 2.6
Accumulated depreciation and accumulated impairment (1.5)
Net carrying amount 1.1
The related lease liabilities are disclosed in note 14.
FINANCIAL STATEMENTS
184 Spirent Communications plc Annual Report 2024
7. Investments
£ million
Shares in
subsidiaries
Loans to
subsidiaries Total
Cost
At 1 January 2024 1,234.8 2.9 1,237.7
Additions 15.3 — 15.3
Share-based payment 6.3 — 6.3
At 31 December 2024 1,256.4 2.9 1,259.3
Amounts provided
At 1 January 2024 and 31 December 2024 743.7 2.9 746.6
Net book value at 31 December 2023 491.1 — 491.1
Net book value at 31 December 2024 512.7 — 512.7
The recoverability of the carrying value of investments in subsidiaries has been assessed by reference to value in use.
During the year, capital contributions of £15.3 million were paid to subsidiaries (2023 £34.1 million). Additionally, capital
contributions were made to subsidiaries in relation to share-based payment of £6.3 million (2023 £5.5 million).
A list of subsidiaries are disclosed on pages 191 to 192 of these financial statements.
8. Stocks
2024 2023
£ million £ million
Work in progress 0.6 1.9
Finished goods 7.5 6.6
8.1 8.5
There were no stock write-downs recognised in the period (2023 nil) and there were no reversals of prior period stock
write-downs (2023 nil).
No stock is carried at fair value less costs to sell (2023 nil).
9. Debtors
2024 2023
Notes £ million £ million
Due within one year
Trade debtors 12 10.0 9.0
Owed by subsidiaries 14.8 17.4
Other debtors 1.6 0.5
Prepayments 1.3 1.5
Current tax asset 1.5 1.5
Assets recognised from costs to obtain a contract 0.2 0.1
29.4 30.0
Due after one year
Defined benefit pension plan surplus 3 0.4 6.6
Deferred tax asset 15 1.0 0.9
1.4 7.5
The Directors consider that the carrying amount of trade debtors, amounts owed by subsidiaries and other debtors
approximates their fair value.
The Company has no significant concentration of credit risk attributable to its trade debtors as the exposure is spread over
a large number of customers.
Assets recognised from costs to obtain a contract relate to capitalised incremental costs to obtain a contract, being sales
commissions arising on contracts with customers of more than one year in length. No assets were impaired or derecognised
during the current year or prior year.
FINANCIAL STATEMENTS
185Spirent Communications plc Annual Report 2024
Notes to the parent Company financial statements continued
10. Creditors: amounts falling due within one year
2024 2023
Notes £ million £ million
Trade creditors 6.7 3.0
Owed to subsidiaries 113.6 112.5
Accruals 6.4 3.6
Contract liabilities 12 5.5 5.2
Government grants 13 — —
Lease liabilities 14 0.3 —
Other taxes and social security costs
0.4 —
132.9 124.3
Trade creditors are non-interest bearing and are normally settled on 30 to 60-day terms. Other creditors are non-interest
bearing.
The Directors consider that the carrying amount of trade creditors and amounts owed to subsidiaries approximates their fair value.
11. Creditors: amounts falling due after more than one year
2024 2023
Notes £ million £ million
Contract liabilities 12 2.3 1.9
Lease liabilities 14 1.0 1.3
3.3 3.2
12. Contract balances
The following table provides information about trade debtors and contract liabilities from contracts with customers. The
Company does not have any contract assets.
2024 2023
Notes £ million £ million
Trade debtors 9 10.0 9.0
Contract liabilities
Current
Payments received on account 0.4 —
Deferred income 5.1 5.2
10 5.5 5.2
Non-current
Deferred income 11 2.3 1.9
Total contract liabilities 7.8 7.1
Revenue recognised in the period from amounts included in contract liabilities at the
beginning of the period
5.2 5.6
There was no revenue recognised in 2024 or 2023 from performance obligations satisfied in previous periods.
The timing of revenue recognition, invoicing and cash collections results in trade debtors, payments received on account and
deferred income on the balance sheet.
The Company receives payments from customers based on a billing schedule, as established in the contract. Trade debtors are
recognised when the right to consideration becomes unconditional. Contract liabilities are recognised as revenue as (or when)
the Company performs under the contract.
The Company also recognises incremental costs incurred to obtain a contract as an asset if it expects to recover those costs.
Such costs are presented within debtors in the balance sheet as assets recognised from costs to obtain a contract and disclosed
in note 9.
FINANCIAL STATEMENTS
186 Spirent Communications plc Annual Report 2024
12. Contract balances continued
Expected realisation of remaining performance obligations at year end
The Company applies the practical expedient in paragraph 121 of IFRS 15 and does not disclose information about remaining
performance obligations that have original expected durations of one year or less.
For contracts that exceed one year, deferred income that relates to unsatisfied or partially satisfied performance obligations at
year end is expected to be recognised as revenue in the future as follows:
2024 2023
£ million £ million
Within 1 year 1.5 1.8
Greater than 1 year 2.3 1.9
3.8 3.7
The above information represents the revenue the Company will recognise when it satisfies the remaining performance
obligations in the contracts. The amounts presented do not include orders for which neither party has performed.
Revenue from the sale of hardware and software generally arises from contracts less than one year in length. Consequently,
the above amounts predominantly relate to the sale of maintenance and support services.
Virtually all of the revenue will be recognised within three years.
The Company provides standard warranties on its products and services. The nature of these warranties is considered to
provide customers with assurance that the related product or service will function as intended in accordance with the agreed
specification, and does not contain or imply any additional service obligation to the customer. Warranty obligations are
estimated and recognised as liabilities based on the probable outflow of resources.
13. Government grants
The following government grants are included within creditors:
2024 2023
£ million £ million
At 1 January — 0.2
Received during the year — —
Released to the profit and loss account — (0.2)
At 31 December — —
There were no government grants pending to be recognised at the end of December 2024.
14. Lease liabilities
Total lease liabilities included in the balance sheet at 31 December:
Buildings
£ million
At 1 January 2023 1.6
Additions —
Repayments (0.5)
Interest 0.2
At 1 January 2024 1.3
Additions 0.2
Repayments (0.3)
Interest 0.1
At 31 December 2024 1.3
2024 2023
Notes £ million £ million
Current 10 0.3 —
Non-current 11 1.0 1.3
1.3 1.3
FINANCIAL STATEMENTS
187Spirent Communications plc Annual Report 2024
Notes to the parent Company financial statements continued
14. Lease liabilities continued
2024 2023
£ million £ million
Maturity analysis – contractual undiscounted cash flows
Less than one year 0.3 0.1
One to five years 1.0 1.1
More than five years — 0.3
Total undiscounted lease liabilities at 31 December 1.3 1.5
In 2024, the total cash outflow for leases was £0.3million (2023 £0.3 million).
Extension options
Some leases of buildings contain extension options exercisable by the Group before the end of the non-cancellable contract
period. Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The
extension options held are exercisable only by the Group and not the lessors. The Group assesses at lease commencement
whether it is reasonably certain to exercise the extension options. The Group reassesses whether it is reasonably certain to
exercise the options if there is a significant event or significant change in circumstances within its control.
2024 2023
Lease liabilities
recognised
(discounted)
£ million
Lease liabilities
recognised
(discounted)
£ million
Buildings 1.3 1.0
15. Deferred tax
The movements in the deferred tax asset/(liabilities) are as follows:
£ million
Notes
Temporary
differences
Tax
losses
UK pension
plans Total
At 1 January 2023 0.3 0.1 0.4 0.8
Charged in the year — 0.1 — 0.1
Deferred tax on defined benefit pension plan ————
At 1 January 2024 0.3 0.2 0.4 0.9
Charged in the year 0.6 (0.1) — 0.5
Deferred tax on defined benefit pension plan — — (0.4) (0.4)
At 31 December 2024 9 0.9 0.1 — 1.0
In 2024 and 2023, the deferred tax liability and asset have been offset on the balance sheet as they related to income taxes
raised by the same authority on the same taxable entity.
The Company has tax losses of £20.0 million (2023 £22.2 million) and short-term timing differences of £0.7 million
(2023 £0.3 million) that are available for offset against suitable future taxable profits.
A deferred tax asset has not been recognised in respect of these losses as their future recovery is uncertain as the losses are
non-trading losses that can only be offset by future non-trading profits. These losses can be carried forward indefinitely.
The Company also has capital losses carried forward of £823.3 million (2023 £823.3 million) for which no deferred tax asset has
been recognised on the balance sheet. These capital losses have no expiry date.
FINANCIAL STATEMENTS
188 Spirent Communications plc Annual Report 2024
16. Dividends
2024 2023
£ million £ million
Declared and paid in the year
Equity dividend on Ordinary Shares
Final dividend 2022 of 4.12 pence per Ordinary Share (2022 4.12 pence) — 24.8
Interim dividend 2023 of 2.14 pence per Ordinary Share (2023 2.14 pence) — 12.4
— 37.2
Dividends are determined in US Dollars and paid in Pound Sterling.
17. Capital and reserves
Changes during the year in the issued Ordinary Share capital were as follows:
Number of
Ordinary
Shares
1
million £ million
Issued and fully paid Ordinary Shares of 3 1/3 pence each at 1 January 2024 and 31 December 2024 578.6 19.3
Note
1. Includes shares held in the Employee Share Ownership Trust and Spirent Sharesave Trust.
Please refer to note 29 of the Notes to the consolidated financial statements on page 166 for disclosures relating to the nature
and purpose of each reserve within equity.
Investment in own Ordinary Shares
No shares were purchased and placed into the Employee Share Ownership in 2024 and 2023 4.3 million shares were
transferred from the Employee Share Ownership Trust in the year to satisfy options exercised under the Spirent employee share
plans (2023 2.7 million shares transferred).
At 31 December 2024, the Employee Share Ownership Trust held 1.9 million Ordinary Shares (2023 6.3 million Ordinary Shares)
to satisfy awards under various share incentive plans. At 31 December 2024, the Spirent Sharesave Trust held 0.5 million
Ordinary Shares (2023 0.5 million Ordinary Shares) to satisfy awards made to United Kingdom-based employees under an
all-employee share scheme. The market value of own Ordinary Shares held in trust, being in total 2.4 million Ordinary Shares
(2023 6.8 million Ordinary Shares), at 31 December 2024 was £4.3 million (2023 £8.3 million).
Both the Employee Share Ownership Trust and the Spirent Sharesave Trust are an extension of the Company.
Share Buyback Programme
On 3 April 2023, the Company commenced a Share Buyback Programme of £56.0 million which was successfully completed
on 24 August 2023. These 33.1 million shares, representing circa 5.4 per cent of the Company’s issued share capital, have
been cancelled.
FINANCIAL STATEMENTS
189Spirent Communications plc Annual Report 2024
Notes to the parent Company financial statements continued
17. Capital and reserves continued
Employee share plans
The Company operates a number of employee share incentive plans which are described in note 30 of Notes to the consolidated
financial statements.
The share incentives over Ordinary Shares under these plans that have been granted and remain outstanding at
31 December 2024, held by employees of the Company, are as follows:
2024 2023
Share plan
Exercise period
(as at 31 December)
Exercise
price
pence
Weighted
average
exercise
price
pence
Number
of share
incentives
outstanding
million
Weighted
average
remaining
contractual
life
years
Weighted
average
exercise
price
pence
Number
of share
incentives
outstanding
million
Weighted
average
remaining
contractual
life
years
Spirent Long-Term
Incentive Plan
1
15.03.25–
15.03.27 — — 2.6 1.2 — 1.8 1.5
2.6 1.8
Note
1. Figures for the Spirent Long-Term Incentive Plan include restricted stock and Performance Shares in aggregate. No exercise price is payable on the vesting of
a Performance Share.
The weighted average share price at exercise date was 174 pence (2023 167 pence).
18. Subsidiaries
A list of subsidiaries, including the name, country of incorporation, registered office address and proportion of ownership interest
is given on pages 191 to 192 of this Annual Report.
FINANCIAL STATEMENTS
190 Spirent Communications plc Annual Report 2024
A full list of subsidiaries of Spirent Communications plc, as at 31 December 2024, is set out below, including the country of
incorporation and the effective percentage of equity owned (if less than 100 per cent). Unless otherwise noted, the share capital
comprises Ordinary Shares which are indirectly held by Spirent Communications plc.
Company name Registered in Registered office address Notes
Spirent Communications of Ottawa
Limited
Canada 100 King Street West, 41st Floor,
1 First Canadian Place,
Toronto, Ontario M5X 1B2
Spirent Communications Technology
(Beijing) Limited
China Suite 1302, Shining Tower,
No 35 Xue Yuan Road,
Haidian District, Beijing 100083
Held directly
Bowthorpe Limited England Origin One, 108 High Street,
Crawley, West Sussex RH10 1BD
Held directly
Cambridge Analytical Group Limited England Origin One, 108 High Street,
Crawley, West Sussex RH10 1BD
Held directly
Earlynow Limited England Origin One, 108 High Street,
Crawley, West Sussex RH10 1BD
Inclex No 3 Limited England Origin One, 108 High Street,
Crawley, West Sussex RH10 1BD
Held directly
Inclex No 5 Limited England Origin One, 108 High Street,
Crawley, West Sussex RH10 1BD
Held directly
Inclex No 6 Limited England Origin One, 108 High Street,
Crawley, West Sussex RH10 1BD
Inclex No 7 Limited England Origin One, 108 High Street,
Crawley, West Sussex RH10 1BD
PG International Limited England Origin One, 108 High Street,
Crawley, West Sussex RH10 1BD
Held directly
Shipbrick Limited England Origin One, 108 High Street,
Crawley, West Sussex RH10 1BD
54.55 per cent held directly,
45.45 per cent held indirectly
Spirent Capital Limited England Origin One, 108 High Street,
Crawley, West Sussex RH10 1BD
Held directly
Spirent Financial Limited England Origin One, 108 High Street,
Crawley, West Sussex RH10 1BD
Held directly
Spirent Holdings Limited England Origin One, 108 High Street,
Crawley, West Sussex RH10 1BD
Held directly
Spirent Investment Limited England Origin One, 108 High Street,
Crawley, West Sussex RH10 1BD
Held directly
Spirent Limited England Origin One, 108 High Street,
Crawley, West Sussex RH10 1BD
Held directly
Spirent Sharesave Trust Limited England Origin One, 108 High Street,
Crawley, West Sussex RH10 1BD
Held directly
Spirent Systems Limited England Origin One, 108 High Street,
Crawley, West Sussex RH10 1BD
100 per cent “A” shares held
indirectly, 100 per cent “B”
shares held directly
Spirent Communications SAS France Gaia, 9 Parc Ariane, Boulevard des
Chenes, 78280 Guyancourt
Held directly
Spirent Communications GmbH Germany Konrad-Zuse Platz 10, House H,
3rd Floor, 81829 Munich
Spirent (Overseas) Limited Guernsey Suite 6, Provident House, Havilland
Street, St Peter Port GY1 2QE
Spirent Communications (Asia) Limited Hong Kong Suites 1603-05, 16th Floor,
625 King’s Road, North Point
Full list of subsidiary undertakings
FINANCIAL STATEMENTS
191Spirent Communications plc Annual Report 2024
Company name Registered in Registered office address Notes
Spirent Communications (India) Pvt
Limited
India 2nd Flr Umiya Business Bay Tower,
1 Cessna Business Park,
Marathahalli-Sarjapur Ring Road,
Kadubeesanahalli, Bangalore
560103 Karnataka
Spirent Communications Japan KK Japan 4th Floor Kyodotsushin Kaikan,
2-2-5, Toranomon, Minato-ku,
Tokyo 105-0001
Spirent Communications Singapore Pte
Limited
Singapore 101 Thomson Road, #30-01
United Square, Singapore 307591
Spirent Communications Korea Inc South Korea (Seocho-dong, Boutique Monaco)
R/M 1609, 397 Seochodaero,
Seocho-gu, Seoul 06616
Spirent Communications Taiwan Limited Taiwan 10F, No 66, Sec 1, Neihu Road,
Neihu District, Taipei City 11493
Netcom Systems Holdings Corporation US (Delaware) 1209 Orange Street, Wilmington,
Delaware 19801
Spirent Communications Inc US (Delaware) 1209 Orange Street, Wilmington,
Delaware 19801
Spirent Federal Systems Inc US (Delaware) 1209 Orange Street, Wilmington,
Delaware 19801
Spirent Holdings Corporation US (Delaware) 1209 Orange Street, Wilmington,
Delaware 19801
Spirent Communications Hawaii LLC US (Hawaii) 1209 Orange Street, Wilmington,
Delaware 19801
Full list of subsidiary undertakings continued
FINANCIAL STATEMENTS
192 Spirent Communications plc Annual Report 2024
$ million
2024 2023 2022 2021 2020
Summary income statement
Revenue 460.2 474.3 607.5 576.0 522.4
Cost of sales (128.7) (130.7) (170.4) (151.3) (139.0)
Gross profit 331.5 343.6 437.1 424.7 383.4
Product development (99.0) (102.4) (111.3) (113.3) (103.1)
Selling and marketing (126.3) (133.9) (138.9) (140.7) (123.4)
Administration (60.0) (62.1) (57.4) (52.2) (53.4)
Adjusting items (35.9) (26.8) (16.8) (14.3) (7.8)
Operating profit 10.3 18.4 112.7 104.2 95.7
Net finance income/(costs) 3.5 4.5 1.9 (0.6) 0.1
Gain on divestment — ————
Profit before tax 13.8 22.9 114.6 103.6 95.8
Tax (charge)/credit (0.9) 2.3 (14.7) (14.4) (11.4)
Profit for the year 12.9 25.2 99.9 89.2 84.4
Summary balance sheet
Intangible assets 203.5 206.6 202.0 208.2 159.9
Property, plant and equipment 14.7 15.8 20.6 23.7 25.8
Right-of-use assets 17.5 17.2 19.5 26.0 23.3
Working capital (excluding cash and deferred tax) (1.9) 17.3 10.6 11.4 2.3
Operating assets 233.8 256.9 252.7 269.3 211.3
Net funds including long-term cash 141.8 108.1 209.6 174.8 241.2
Lease liabilities (20.3) (21.4) (22.1) (29.8) (28.2)
Provisions (7.0) (8.0) (8.4) (7.9) (9.8)
Deferred tax 54.7 43.2 32.8 10.6 21.7
Defined benefit pension plan (deficit)/surplus (10.5) (3.0) 0.6 30.5 6.6
Net assets 392.5 375.8 465.2 447.5 442.8
Total equity 392.5 375.8 465.2 447.5 442.8
Summary cash flows
Cash flow from operating activities 51.9 31.9 117.8 102.9 121.2
Interest received 4.5 5.4 1.5 0.4 1.5
Net capital expenditure (7.3) (6.1) (8.2) (9.8) (9.0)
Capital development costs (4.5) ————
Net lease payments (8.9) (8.2) (9.0) (9.5) (11.1)
Acquisition related other adjusting items and one-off
contributions to UK pension scheme 18.6 0.7 1.7 7.9 —
Free cash flow 54.3 23.7 103.8 91.9 102.6
Acquisitions, disposals and investment in associate — (7.8) — (51.3) —
Share purchase into Employee Share Ownership Trust — — (22.9) (15.1) (11.9)
Share buyback — (71.6) — — —
Dividend paid — (46.5)
(39.9) (84.1) (33.6)
Acquisition related other adjusting items and one-off
contributions to UK pension scheme (18.6) (0.7) (1.7) (7.9) —
Net (decrease)/increase in cash and cash equivalents 35.7 (102.9) 39.3 (66.5) 57.1
Financial history
193Spirent Communications plc Annual Report 2024
OTHER INFORMATION
OTHER INFORMATION
$ million
2024 2023 2022 2021 2020
Other information
Expenditure on property, plant and equipment 7.3 6.5 8.4 10.2 9.5
Depreciation of property, plant and equipment 8.5 10.5 11.0 12.4 12.2
Depreciation of right-of-use assets 6.7 6.9 7.3 7.9 8.4
Product development 99.0 102.4 111.3 113.3 103.1
Share information
Earnings per share (cents)
Basic 2.25 4.30 16.46 14.67 13.84
Diluted 2.22 4.26 16.36 14.54 13.71
Adjusted basic
1,2
7.75 7.55 18.86 16.59 14.68
Dividend per Ordinary Share (cents) — 2.76 7.57 6.76 6.04
Special dividend per Ordinary Share (cents) — — — — 7.50
Fully paid Ordinary Shares in issue at year end (number, million) 578.6 578.6 611.7 611.7 611.7
Segmental analysis
Revenue
Lifecycle Service Assurance 181.0 199.1 264.5 261.6 219.3
Networks & Security 279.2 275.2 343.0 314.4 303.1
460.2 474.3 607.5 576.0 522.4
Adjusted operating profit
1
Lifecycle Service Assurance 14.6 16.9 51.0 63.1 50.7
Networks & Security 44.9 39.0 86.8 63.5 62.0
Corporate – non-segmental (13.3) (10.7) (8.3) (8.1) (9.2)
Adjusted operating profit
1
46.2 45.2 129.5 118.5 103.5
Acquired intangible asset amortisation (5.2) (5.0) (4.7) (4.2) (0.5)
Share-based payment (9.6) (7.6) (8.5) (5.6) (4.2)
Other adjusting items (21.1) (14.2) (3.6) (4.5) (3.1)
Operating profit 10.3 18.4 112.7 104.2 95.7
Geographical information
Revenue by geographical market
Americas 273.3 268.1 336.3 324.6 276.2
Asia Pacific 126.3 153.9 205.8 185.1 189.2
Europe, Middle East and Africa 60.6 52.3 65.4 66.3 57.0
460.2 474.3 607.5 576.0 522.4
Notes
1. Before acquired intangible asset amortisation, share-based payment and other adjusting items.
2. Before gain on divestment, items in note 1, tax effect of items in note 1 and over/under provisions in respect of prior year tax.
Financial history continued
194 Spirent Communications plc Annual Report 2024
OTHER INFORMATION
The performance of the Group is assessed using a variety of alternative performance measures (APMs) which are presented
to provide users with additional financial information that is regularly reviewed by management. The APMs presented are not
defined under IFRS and therefore may not be directly comparable with similarly identified measures used by other companies.
In management’s view, the APMs reflect the underlying performance of the Group and provide an alternative basis for
evaluating how the Group is managed and measured on a day-to-day basis. Such APMs are non-GAAP measures and should
not be viewed in isolation or as an alternative to the equivalent GAAP measure.
The APMs and key performance indicators are aligned to the Group’s strategy and collectively are used to measure the
performance of the Group and form the basis of the metrics for Director and management remuneration. The Group’s key
performance indicators are presented within the Strategic Report of its 2024 Annual Report.
Order intake
Order intake represents commitments from customers to purchase goods and/or services from Spirent that will ultimately result
in recognised revenue. Where there can reasonably be changes to the scope or duration of an order, the Group exercises
judgement on the amount of the order that is booked.
Order intake is a measure of operating performance used by management to assess whether future activity levels are
increasing or slowing and therefore how effective we have been in the execution of our strategy. Order intake is a key
performance indicator used to measure Group, operating segment and regional performance for internal reporting purposes.
Orderbook
Orderbook comprises the value of all unsatisfied orders from customers and provides an indication of the amount of revenue
that has been secured and will be recognised in future periods. Orderbook represents the transaction price allocated to wholly
and partially unsatisfied performance obligations, including amounts held in contract liabilities at the period end. There is no
comparable IFRS measure.
Book to bill
Book to bill is the ratio of orders booked to revenue recognised in the year and is a measure of the visibility of future revenues at
current levels of activity. Book to bill is a key performance indicator used to measure Group and operating segment
performance for internal reporting purposes.
Adjusted operating profit
Adjusted operating profit is reported operating profit excluding amortisation of acquired intangible assets, share-based
payment and other adjusting items including restructuring. Management uses adjusted operating profit, in conjunction with
other GAAP and non-GAAP financial measures, to evaluate the overall operating performance of the Group as well as each of
the operating segments and believes that this measure is relevant to understanding the Group’s financial performance, as
specific items (adjusting items) are identified and excluded by virtue of their size, nature or incidence, as they are not considered
part of the Group’s normal ongoing operations and therefore can lead to period-on-period fluctuations that can make it difficult
to assess financial performance.
Specifically, items are excluded from adjusted operating profit if they are acquisition related in nature, including acquired
intangible asset amortisation which is dependent on being able to identify intangible assets and assessing their useful economic
lives, or if their exclusion allows for more meaningful comparisons with peer companies such as share-based payment which
can fluctuate from period to period. The exclusion of adjusting items from adjusted operating profit is consistent from period
to period.
Adjusted operating profit is also used in setting Director and management remuneration targets and in discussions with the
investment analyst community.
Adjusted operating margin
Adjusted operating margin is adjusted operating profit as a percentage of revenue. It is a measure of the Group’s overall
profitability and how successful we are in executing on our overall strategy, and demonstrates our ability to improve margin
through efficient operations and cost management, whilst being mindful of the need to invest for the future.
Effective tax rate
Effective tax rate is the adjusted tax charge, before tax on adjusting items, expressed as a percentage of adjusted profit before
tax. The adjusted tax charge is the reported tax charge excluding the tax effect on adjusting items and adjustments made to
provisions in respect of prior year tax.
Alternative performance measures
195Spirent Communications plc Annual Report 2024
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Adjusted basic earnings per share
Adjusted basic earnings per share (EPS) is adjusted earnings attributable to owners of the parent Company divided by the
weighted average number of Ordinary Shares outstanding during the year. Adjusted earnings is reported profit before tax
excluding amortisation of acquired intangible assets, share-based payment, other adjusting items, tax on adjusting items and
over/under provisions in respect of prior year tax.
Adjusted basic EPS is a measure of how successful we are in executing on our strategy and ultimately delivering increased value
for shareholders. Adjusted basic EPS is also used in setting Director and management remuneration targets and in discussions
with the investment analyst community. The Group sets out the calculation of adjusted basic EPS in note 11 of Notes to the
consolidated financial statements.
Product development costs as a percentage of revenue
Product development as a percentage of revenue in the year. It is a measure of how much the Group is investing to support
further organic growth initiatives in line with the strategic objectives, whilst driving improved productivity and effectiveness.
Free cash flow
Free cash flow is cash flow generated from operations, less tax and net capital expenditure, lease liability principal repayments
and lease liability interest paid, add interest received and lease payments received from finance leases, excluding acquisition
related other adjusting items and one-off employer contributions to the UK pension scheme.
Free cash flow is a measure of the quality of the Group’s earnings and reflects the ability to convert profits into cash and
ultimately to generate funds for future investment. It gives us financial strength and flexibility and the ability to pay sustainable
dividends to our shareholders. Free cash flow is an important indicator of overall operating performance as it reflects the cash
generated from operations after capital expenditure, financing and tax which are significant ongoing cash flows associated with
investing in the business and financing operations.
Free cash flow excludes corporate level cash flows that are independent of ongoing trading operations such as dividends,
acquisitions and disposals and share repurchases and therefore is not a measure of the funds that are available for distribution
to shareholders.
A reconciliation of cash generated from operations, the closest equivalent GAAP measure, to free cash flow is provided within the
Financial Review on page 53.
Free cash flow conversion
Free cash flow conversion is the ratio of free cash flow to adjusted earnings, presented as a percentage.
Free cash flow conversion is a measure used in conjunction with free cash flow to assess the Group’s ability to convert profit into
cash and ultimately to generate funds for future investment.
Alternative performance measures continued
196 Spirent Communications plc Annual Report 2024
OTHER INFORMATION
Financial calendar 2025
4 March Full year results announcement
June Annual General Meeting
30 June Half year end
August Half year results announcement
31 December 2025 Financial year end
Ordinary Shares and American Depositary Receipts
The Company’s Ordinary Shares are traded on the London Stock Exchange (ticker: SPT). The Company operates a Level 1
American Depositary Receipt (ADR) programme with each ADR representing four Ordinary Shares. The ADRs trade on the US
over-the-counter market (symbol: SPMYY; CUSIP: 84856M209). BNY Mellon is the authorised depositary bank for the
Company’s ADR programme.
The ADRs are quoted on the OTC Pink electronic quotation service which can be found at www.otcmarkets.com/corporate-services.
Annual General Meeting
The Company’s 2025 Annual General Meeting (2025 AGM) will be held in London in June 2025. Full details will be set out in the
AGM Notice.
Company’s registrar
Enquiries concerning shareholdings, change of address or other particulars should be directed in the first instance to the
Company’s registrar, Equiniti, Tel: +44 (0)371 384 2126 (please use the country code when calling from outside the UK). Please
quote your 11 digit Shareholder Reference number. Lines are open from 8.30am to 5.30pm (UK time) Monday to Friday,
excluding public holidays in England and Wales. You can also contact by using the Relay UK website at www.relayuk.bt.com.
Equiniti also provides a range of online shareholder information services at www.shareview.co.uk, where shareholders can check
their holdings and find practical help on transferring shares or updating their details.
Dividends
Shareholders are able to choose to receive their dividends paid direct to their bank account, reinvested in Ordinary Shares
through the Company’s Dividend Reinvestment Plan (see below), or paid in foreign currencies. To change how you receive your
dividends please contact the Company’s registrar, Equiniti, on +44 (0)371 384 2126 (please use the country code when calling
from outside of the UK) or log on to www.shareview.co.uk.
Dividend Reinvestment Plan
The Company has a Dividend Reinvestment Plan (DRIP) delivered by Equiniti Financial Services Limited. The DRIP allows eligible
shareholders to use their cash dividend to buy additional shares in the Company, so increasing their shareholding. If you would
like additional information, please contact the Company’s registrar, Equiniti, on +44 (0)371 384 2268 (please use the country
code when calling from outside of the UK) or log on to www.shareview.co.uk.
Shareholder security
Shareholders are advised to be wary of any unsolicited advice, offers to buy shares at a discount or offers of free reports about
the Company.
Details of any share dealing facilities that the Company endorses will be included in the Company’s mailings or on our website.
More detailed information can be found at www.fca.org.uk/consumers.
Shareholder information
197Spirent Communications plc Annual Report 2024
OTHER INFORMATION
4G (Fourth Generation) Fourth generation of mobile communications that delivers data rates of tens to
hundreds of megabits per second.
5G Advanced 5G Advanced delivers a new paradigm of 5G connectivity, bringing significant
enhancements to network performance, sustainability and intelligence.
5G Core/5G Core Network The heart of a standalone 5G network, providing data and control plane operations.
The 5G core aggregates data traffic, communicates with devices, delivers essential
network services and provides extra layers of security, among many other functions.
5G (Fifth Generation) Fifth generation of cellular technology, engineered to greatly increase the speed and
responsiveness of wireless networks, capable of multiple gigabit per second data rates
and very low latency.
6G (Sixth Generation) The future standard for wireless communications technologies supporting cellular data
networks. As the planned successor to 5G, it is expected to be capable of much higher
data speeds and to support new business models.
Artificial Intelligence (AI) The simulation of human intelligence processes by machines, especially computer
systems. Specific applications of AI include expert systems, natural language
processing, speech recognition and machine vision.
Automotive Ethernet A form of Ethernet network with a physical layer adapted to automotive use cases, capable
of meeting automotive electromagnetic compatibility and immunity requirements.
Cloud A variety of computing concepts that involve a large number of computers connected
through a real-time communication network such as the internet. Often used in
reference to network-based services served up by virtual hardware, simulated by
software running on one or more physical machines.
Cloud-Native Function (CNF) A service that performs network duties in software, as opposed to purpose-built hardware.
Communications Service Provider (CSP) An umbrella term for a company that offers communications and information-related
services. This can include telephone companies, internet providers, or satellite cable
companies, as well as media entities.
Continuous Integration/Continuous
Delivery (CI/CD)
A culture, operating principles, and set of practices that application development teams
use to deliver software code changes more frequently and reliably.
Data Centre A centralised location where computing resources critical to an organisation are
maintained in a highly controlled environment.
Doppler A change in the frequency with which waves (as of sound or light) from a given source
reach an observer when the source and the observer are in motion with respect to
each other so that the frequency increases or decreases according to the speed at
which the distance is decreasing or increasing.
Edge/Edge Computing A network architecture concept that enables cloud computing capabilities and an IT
service environment at the edge of the cellular network and, more generally, at the
edge of any network.
Ethernet A family of networking technologies originally developed for local area networks, which
migrated to metro area networks and eventually became the dominant standard in
wireline networks worldwide.
Fixed Wireless Access (FWA) A method of providing wireless connectivity through radio links between two fixed
points that enables “last mile” wireless broadband access to homes or businesses
without the need to lay fibre or cable.
Global Navigation Satellite System
(GNSS)
The standard generic term for satellite navigation systems that provide autonomous
geospatial positioning with global coverage. GNSS allows users’ receivers to determine
their location to within a few metres by employing a triangulation technique that uses
information from multiple satellites.
Hyperscaler The operator of data centres that offer scalable cloud computing services. Examples
include Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform.
Internet of Things (IoT) A network of physical objects or “things” embedded with electronics, software, sensors
and connectivity to enable data exchange with the manufacturer, the operator and/or
other connected devices. Each thing is uniquely identifiable through its embedded
computing system but is able to interoperate within existing internet infrastructure.
Internet Protocol (IP) The primary network protocol used on the internet and on other network devices to
facilitate and control the flow of data.
Glossary
198 Spirent Communications plc Annual Report 2024
OTHER INFORMATION
Low Earth Orbit (LEO) An orbit that is relatively close to Earth’s surface, generally at an altitude of less than
2,000 kilometres (1,200 miles).
Machine Learning (ML) A branch of artificial intelligence (AI) and computer science which focuses on the use
of data and algorithms to imitate the way that humans learn, gradually improving
its accuracy.
Network Equipment Manufacturers
(NEMs)
Developers and suppliers of products and services to communication service providers
such as fixed or mobile operators, as well as to enterprise customers.
Non-Standalone (NSA) 5G An architecture used in initial 5G network rollouts to provide customers with higher
data transfer speeds by pairing a 5G Radio Access Network (RAN) with an existing 4G
Evolved Packet Core (EPC).
Non-Terrestrial Networks (NTN) Networks that provide connectivity through spaceborne vehicles (satellite), airborne
platforms, including airships and balloons, or UAS (unmanned aircraft system)
platforms, including drones.
Pre-Silicon and Post-Silicon Pre-silicon and post-silicon validation are two distinct lifecycle phases in
semiconductor development.
1. Pre-silicon validation involves testing and verifying chip designs before physical
manufacturing using simulation/emulation environments and hardware prototypes.
2. Post-silicon validation is conducted on actual manufactured chips to
comprehensively test real-world performance and verify design functionality.
Positioning, Navigation and Timing
(PNT)
“Positioning” is the ability to determine the geographic location of a person, object or signal.
“Navigation” is the ability to calculate a route to a desired position from a current position.
“Timing” is essential to synchronisation of modern networks, providing the only frame of
reference between all devices.
Post-Quantum Cryptography Post-quantum cryptography refers to cryptographic algorithms designed to remain
secure against both classical and future quantum computer attacks, ensuring
long-term protection.
Secure Access Service Edge (SASE) A security framework for enabling secure and rapid cloud adoption, and for helping to
ensure that both users and devices have secure cloud access to applications, data and
services anywhere, any time.
Standalone (SA) 5G Use of 5G cells for both signalling and information transfer. It includes new 5G packet
core architecture instead of relying on the 4G evolved packet core. SA deployment is
expected to have lower cost and better efficiency, and to assist development of new
use cases.
System-on-Chip (SoC) A system on a chip or system-on-chip is an integrated circuit that integrates most or all
components of a computer or other electronic system.
Test-as-a-Service (TaaS) The outsourcing of testing activities to a third party that focuses on simulating real-world
testing environments as specified in the client requirements.
Virtualisation Technologies designed to provide a layer of abstraction from the physical characteristics
of computing resources to simplify the way in which other systems, applications or
end-users interact with those resources.
Wi-Fi 6/Wi-Fi 6E/Wi-Fi 7 Wi-Fi 6 is the latest generation and standard for wireless internet, providing lower
latency and more efficient data transfer compared with earlier generations. Wi-Fi 6E
extends the capabilities of Wi-Fi 6 into the 6 GHz band in certain countries. Wi-Fi 7 is
the next generation of Wi-Fi standards, currently in development.
Zero Trust (ZT)/Zero Trust Framework
(ZTF)
An architectural approach and goal for network security that assumes that every
transaction, entity, and identity is untrusted until trust is established and maintained
over time, in contrast with the legacy view that a network is secure unless security
systems identify a breach.
199Spirent Communications plc Annual Report 2024
OTHER INFORMATION
Registered office
Spirent Communications plc
Origin One
108 High Street
Crawley
West Sussex RH10 1BD
United Kingdom
Tel: +44 (0)1293 767676
Email: investor.relations@spirent.com
Website: corporate.spirent.com
Registered in England No: 470893
Auditor
Deloitte LLP
1 New Street Square
London EC4A 3HQ
United Kingdom
Tel: +44 (0)20 7936 3000
Website: www.deloitte.com
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
United Kingdom
Tel: +44 (0)371 384 2126
Website: www.shareview.co.uk
For deaf and speech impaired customers, we welcome
calls via Relay UK
Please see www.relayuk.bt.com for more information
ADR depositary
BNY Mellon Corporation
PO Box 30170
College Station
TX 77842-3170
USA
Tel: +1 (888) 269 2377 (toll free US)
Tel: +1 (201) 680 6825 (outside US)
Email: shrrelations@cpushareownerservices.com
Website: www.computershare-na.com/bnym_adr
Brokers (joint)
Jefferies International
100 Bishopsgate
London EC2N 4JL
United Kingdom
Tel: +44 (0)20 7029 8000
Website: www.jefferies.com
UBS Limited
5 Broadgate
London EC2M 2QS
United Kingdom
Tel: +44 (0)20 7567 8000
Website: www.ubs.com
Financial adviser
NM Rothschild & Sons Limited
New Court
St Swithin’s Lane
London EC4N 8AL
United Kingdom
Tel: +44 (0)20 7280 5000
Website: www.rothschildandco.com
Financial PR adviser
DGA Group
One Fleet Place
London EC4M 7RA
United Kingdom
Tel: +44 (0)20 7664 5095
Website: www.dgagroup.com
Contact details
Cautionary statement regarding forward-looking statements
This Annual Report may contain forward-looking statements which are made
in good faith and are based on current expectations or beliefs, as well as
assumptions about future events. You can sometimes, but not always, identify
these statements by the use of a date in the future or such words as “will”,
“anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “should”, “may”,
“assume” and other similar words. By their nature, forward-looking statements
are inherently predictive and speculative and involve risk and uncertainty
because they relate to events and depend on circumstances that will occur in the
future. You should not place undue reliance on these forward-looking statements,
which are not a guarantee of future performance and are subject to factors
that could cause our actual results to differ materially from those expressed or
implied by these statements. The Company undertakes no obligation to update
any forward-looking statements contained in this Annual Report, whether as
a result of new information, future events or otherwise.
200 Spirent Communications plc Annual Report 2024
OTHER INFORMATION
CBP029623
Spirent Communications plc’s commitment to environmental issues is reflected in
this Annual Report, which has been printed on Magno Satin, an FSC
®
certified
material. This document was printed by Park Communications using its
environmental print technology, which minimises the impact of printing on
the environment. Vegetable-based inks have been used and 99% of dry waste
is diverted from landfill. The printer is a CarbonNeutral
®
company.
Both the printer and the paper mill are registered to ISO 14001.
Spirent Communications plc
Origin One
108 High Street
Crawley
West Sussex RH10 1BD
United Kingdom
Tel: +44 (0)1293 767676
Email: investor.relations@spirent.com
Website: corporate.spirent.com
Registered in England No: 470893
Spirent and the Spirent logo are trademarks or
registered trademarks of Spirent Communications
plc. All other trademarks or registered trademarks
mentioned herein are held by their respective companies.
All rights reserved.
Spirent Communications plc Annual Report 2024