Calnex chief executive Tommy Cook said the company has suffered “a lot of pain” accessing vital supplies of semiconductors in recent months, though so far there has been no tangible damage to business.

His comments came as the Linlithgow-based company posted a double-digit increase in annual revenues and profits as demand remains high for its telecommunications testing equipment. Order books at the start of the current financial year were sitting at record levels.

Revenues during the year to the end of March came in at £22 million, up 23 per cent on £18m the previous year. Adjusted pre-tax profits of £6m were up 18% on £5.1m previously.

The company’s core business – supplying equipment to component manufacturers, equipment vendors and network operators – remained strong bolstered by the continuing roll-out of 5G mobile networks and the growth in cloud computing. This includes sales of Calnex’s Paragon-Neo platform, which operates on the new O-RAN (Open Radio Access Network) standards designed to promote competition and encourage new entrants into the telecoms industry’s hardware and software markets.

It is also working to grow its presence in the market to supply “hyperscale” clients such as Meta Platforms, Amazon and Alphabet who can use equipment from Calnex to maintain their datacentre networks.

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“That has been a strategic focus for about the last 18 months,” Mr Cook said. “We have been focusing on the big players because they are going to set the trend for what others will do.”

Calnex worked closely with long-time supplier Kelvinside Electronics of Kilsyth to source the semiconductors needed to ship all orders scheduled for the final month of the last financial year. Mr Cook said the two firms are continuing to fight a battle against global supply shortages that have led to an increasing number of dodgy components making their way to the market.

“It doesn’t look like shortages are easing at the moment,” he said.

“People are talking about maybe in three or four months’ time it will begin to unwind, but who knows? We are sort of planning for it to last the rest of the year.”

With order backlogs at record levels, the company is staying in close contact with customers who Mr Cook said are “empathetic” to the situation. Carrying such levels of uncompleted work is “never comfortable”, he added, but so far there has been no damage to business.

Calnex now employs 136 people following the April acquisition of iTrinergy, whose technology is used to create real-world network environments to test mobile phone gaming applications before they go live.

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Calnex has paid £2.5m upfront for the company, which is based in Stevenage, Hertfordshire, with up to a further £1m dependant on meeting certain sales targets during the year to March 2024. Mr Cook said Calnex will focus in the current year on developing routes to market for iTrinergy’s technology, with significant contributions to group profits expected thereafter.

The company is mulling further acquisitions, as well as strategic partnership opportunities. Responding to yesterday’s results, analyst Ian McInally of house broker Cenkos put a “buy” rating on the stock, noting that Calnex has increased the numbers and breadth of its customer base.

“Calnex remains strongly positioned to continue growth and benefit from the long-term industry drivers within the telecoms and networking markets,” he said in a note to investors.

Shares in Calnex, which are quoted on London’s junior Alternative Investment Market, were 6p lower to close yesterday’s trading at 161p. The company has proposed a final dividend of 0.56p, making a total payment of 0.84p per share for the full year.