Spirent soars despite £1bn write-off

Shares in Spirent, which sells kit that tests telecoms networks, shot up 36 per cent yesterday after the group unveiled plans to raise almost £60m by exiting a joint venture despite reporting a £1bn loss for the year.

It is selling its 51 per cent stake in WAGO, which makes electrical wire interconnection systems, to its joint venture partner for £58.2m in net cash.

Spirent said the money would go toward paying down debt, which totalled £162m at the end of last year, and said the deal had enabled it to renegotiate its banking facilities to give it more headroom. "With the uncertainty in the telecommunications market going forward, we wanted to have more breathing room so we could concentrate on trading," Nicholas Brookes, the chief executive, said. Shares in Spirent closed up 4.5p at 17p.

Mr Brookes admitted, however, that the company had come close to breaching its financial covenants last year. Spirent yesterday reported a pre-tax loss for 2002 of £1.1bn, after accounting for a £923m goodwill impairment charge and £120m of exceptional fees, compared with a loss of £730.7m a year before.

Trading, the company said, had been "resilient" in the first half of last year but had dropped away sharply in the third quarter thanks to a fall in demand from its telecoms customers.