West Lothian tech firm Calnex overcomes chip shortage to build record order book

Calnex Solutions, the West Lothian technology business that in 2020 became the first Scottish stock market flotation in two years, has given a bullish outlook, flagging a record order book and bumper results for the year ahead.

In a trading update to investors, the firm said the strong levels of trading experienced in the first six months of the current financial year, to the end of this month, have continued. As a result, the group’s performance for the full year will be in line with market expectations.

The Linlithgow-based company will begin the new financial year, to the end of March 2023, with a record order book across all product lines and it is anticipated that revenue and operating profit for the coming year will be “materially ahead of market expectations”.

Bosses noted that the business has “successfully managed the challenges of ongoing global semiconductor shortages” to minimise the impact on its ability to manufacture and ship products.

Tommy Cook, chief executive of Linlithgow-based Calnex Solutions: 'We are highly encouraged by the record level of orders we have received across our customer base.' Picture: Peter Devlin

However, the company has experienced reduced availability of certain components in the final quarter of the current year, partly as a result of the level of orders Calnex is being asked to fulfil.

The bumper order book is said to include a “significant” order from a large data centre customer for delivery of a new, emerging market application in 2022/23. The board is currently assessing the opportunities this may create for Calnex within the data centre market.

Founder and chief executive Tommy Cook said: “We are highly encouraged by the record level of orders we have received across our customer base, demonstrating the quality of our solutions and their applicability.

“We anticipate next year will see revenue and profits considerably ahead of initial forecasts, with the potential for further growth should the supply chain issues ease and we are able to capitalise on the significant opportunities within our markets.

“We remain highly profitable and cash generative and will continue to invest in our offering and people to ensure we are well positioned to continue to capitalise on the growth in the telecoms and cloud computing markets,” he added.

The firm is due to release results for the year to the end of March 2022 in May.

Calnex provides test instrumentation equipment to some of the world’s biggest telecoms companies.

In January, the group bolstered its board with the appointment of two highly experienced directors.

Margaret Rice-Jones and Stephen Davidson joined the firm as non-executive directors with immediate effect.

Rice-Jones has more than 20 years’ experience at board level in public and private software and technology companies. Her current roles include acting as senior independent director at banknote maker De La Rue.

Davidson is described as an “accomplished director of both public and private companies”, with more than two decades of PLC-board experience.

George Elliott, chairman of Calnex, said: “I am very pleased to welcome Margaret and Stephen to the board of the Company. They join us at what is an exciting time for Calnex, as we seek to capitalise on the telecoms industry’s ongoing transition to 5G alongside the growth of cloud computing.”

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