The information contained within this announcement is deemed
to constitute inside information as stipulated under the retained
EU law version of the Market Abuse Regulation (EU) No. 596/2014
(the "UK MAR") which is part of UK law by virtue of the European
Union (Withdrawal) Act 2018. The information is disclosed in
accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside
information is now considered to be in the public
domain.
7 April
2025
Volex plc
("Volex", the "Company" or
the "Group")
Full Year Trading
Update
Full year growth and profit
ahead of market expectations
Volex (AIM: VLX), the specialist
integrated manufacturer of critical power and data transmission
products, today releases a trading update for the financial year
ended 30 March 2025 ("FY2025").
Revenue growth and improved profitability driven by strong Q4
momentum
Following a strong fourth quarter,
revenue for FY2025 is now expected to be at least $1,060 million,
representing a year-on-year increase of at least 16%, and organic
constant currency growth of at least 8%. Underlying operating
margins are anticipated to be at the upper end of the target
corridor of 9% to 10%, with operating profit of at least $100
million, well ahead of the top end of market
estimates1.
This robust financial performance
highlights Volex's ongoing success in securing new projects through
delivering cost-competitive and technically advanced manufacturing
services.
Improved underlying operating profit
margins in the second half were driven by a favourable product mix,
including increased demand for data centre products, as well as a
focus on incremental operational improvements.
Harnessing manufacturing technology to deliver organic
growth
The significant organic growth
achieved this year reflects the Group's strong market positions
across a diverse range of specialist sectors, where Volex leverages
deep technical expertise to meet complex customer
requirements.
Our embedded presence in global
technology supply chains continues to generate exciting
opportunities and deliver consistent, high-quality solutions for
customers, while the Group's focus on
specialist markets with high customer lock-in and limited
competition means that we are an essential and trusted partner to
the global technology companies we work with.
Electric Vehicles (EV) and Consumer
Electricals continued their strong momentum, securing several new
key customer relationships, positioning the Group well for
FY2026.
Complex Industrial Technology
experienced notable strength, delivering low double-digit organic
growth, supported by increased data centre product demand,
particularly driven by accelerated infrastructure investments from
a major customer in the last quarter of the year.
Medical sector revenues declined
against a prior-year comparative period that benefitted from
one-time customer catch-up orders.
Integration activity continues in
the Group's Off-Highway business, delivering planned productivity
improvements and efficiencies. Growth in this segment normalised
during the year, with softer macroeconomic conditions in some
end-markets offset by several strategic customer wins in North
America and Europe, resulting in flat year-on-year organic
revenue.
Strategic investment driven by customer
demand
The Group continued to invest
strategically in capacity expansion, automation, and vertical
integration initiatives during the year, all closely aligned with
servicing ever evolving customer needs. Additional capacity in key
locations positions Volex for site consolidation opportunities in
FY2026, supporting long-term operational efficiencies.
After targeted capex investment to
support growth of approximately $45 million, covenant
leverage3 at 30 March 2025 was approximately 1.1x,
consistent with the prior-year.
Embedded customer relationships mitigate trade
volatility
The breadth and rapid evolution of
recent changes in international trade policies and market dynamics
are unprecedented, making precise quantification of direct and
indirect impacts challenging and increasing operational
complexity.
However, Volex's strategic
investments in geographic diversification and global manufacturing
flexibility have created a highly resilient platform that is
well-positioned to support customers navigating these dynamic
market conditions.
Leveraging deep expertise and an
agile global footprint, Volex proactively engages with customers to
adapt production locations and mitigate potential disruptions
effectively. Given the evolving tariff landscape, customers are
cautious about making short-term supply chain decisions, further
enhancing the value of Volex's embedded and critical roles
supporting their procurement activities.
The majority of Volex's products
represent essential components within complex supply chains. In
many instances, Volex is either the sole provider or one of very
few qualified manufacturers capable of meeting demanding technical
and operational requirements, fostering strong customer reliance.
Incremental costs arising from tariff changes are expected to be
passed through to customers, underscoring the robustness of Volex's
competitive positioning.
Nat
Rothschild, Executive Chairman, said:
"We are delighted with another year
of very significant progress at Volex, delivering a performance
that has comfortably exceeded market expectations, clearly
demonstrating the effectiveness of our strategy.
"For the first time in Volex's
history, revenue and profits have exceeded $1 billion and $100
million respectively. This is a direct result of our continued
investment in advanced manufacturing capabilities, coupled with our
strategic focus on key growth sectors, whilst simultaneously
maintaining strong returns on capital employed.
"Although wider market uncertainty
has increased in recent days, particularly around tariffs, Volex's
current market valuation fails to adequately reflect our embedded
presence in global technology supply chains, alongside the unique
geographic and end-market diversification that has become such a
feature of the Volex that our team has built in recent
years.
"I am very confident that these
elements mean we are well placed to navigate prevailing market
conditions and continue to deliver on the significant growth
opportunities that lie ahead."
For
further information please contact:
Volex plc
|
+44 (0) 1256 442570
|
Nat Rothschild, Executive Chairman
|
investor.relations@volex.com
|
Jon Boaden, Chief Financial
Officer
|
|
|
|
Peel Hunt LLP - Nominated Adviser & Joint
Broker
|
+44 (0) 20 7418 8900
|
Ed Allsopp
|
|
Dom Convey
|
|
Tom Graham
|
|
|
|
Jefferies - Joint Broker
|
+44 (0) 20 7029 8000
|
Philip Noblet
|
|
Sam Barnett
|
|
Harry Le May
|
|
|
|
Sodali & Co - Media Enquiries
|
+44 (0) 20 7250 1446
|
James White
|
|
Nicholas Johnson
|
|
About Volex plc
Volex plc (AIM:VLX) is a driving
force in integrated manufacturing for mission-critical applications
and a global leader in power and data connectivity solutions. Our
diverse operations support international blue-chip customers in
five key sectors: Electric Vehicles, Consumer Electricals, Medical,
Complex Industrial Technology and Off-Highway. Headquartered in the
UK, we orchestrate operations across 27 advanced manufacturing
facilities, uniting 14,000 dynamic individuals from 25 different
nations. Our extraordinary products find their way to market
through our localised sales teams and authorised distributor
partners, supporting Original Equipment Manufacturers and
Electronic Manufacturing Services companies across the globe. In a
world that grows more digitally complex by the day, customers trust
us to deliver power and connectivity that drives everything from
household essentials to life-saving medical equipment. Learn more
at www.volex.com.
Notes
1. As
at 2 April 2025, the average of company compiled analysts'
forecasts for the 52 weeks ending 30 March 2025 for revenue is
$1,032.6 million with a range of $1,027.7million to $1,040.0
million, the average for underlying operating profit is $96.7
million, with a range of $95.8 million to $97.6 million.
2. Underlying operating profit is before adjusting items which
are one-off in nature and significant (such as restructuring costs,
impairment charges or acquisition-related costs), the amortisation
and impairment of acquired intangible assets and share-based
payment charges. This trading update is based upon unaudited
management accounts information. Forward-looking statements have
been made by the Directors in good faith using information
available up until the date that they approved this statement.
Forward-looking statements should be regarded with caution because
of the inherent uncertainties in economic trends and business
risks.
3. Covenant leverage is net debt (before operating lease
liabilities) divided by underlying EBITDA adjusted for depreciation
of right-of-use
assets and pro-rated for acquisitions.