TIDMVLX
RNS Number : 0567F
Volex PLC
12 November 2020
12 November 2020
VOLEX plc
Half year results for the 26 weeks ended 4 October 2020
Robust H1 performance - resilient business model responding well
to Covid-19
Volex plc ("Volex"), a global provider of integrated
manufacturing services and power products, today announces its half
year results for the 26 weeks ended 4 October 2020 ("H1
FY2021").
26 weeks to 26 weeks to
4 October 29 September %
Financial Summary 2020 2019 Change
---------------------------------- ------------ ------------- -------------
Revenue $202.5m $195.7m 3.5
Underlying* operating profit $20.8m $15.9m 30.8
Statutory operating profit $14.3m $10.4m 37.5
Underlying* profit before tax $20.9m $15.3m 36.6
Statutory profit before tax $14.4m $9.7m 48.5
Basic earnings per share 10.2c 5.3c 92.5
Underlying diluted earnings per
share 12.9c 8.5c 51.8
Interim dividend per share 1.1p 1.0p 10.0
Net funds (before IFRS 16 Leases
liability)** $32.0m $7.9m 305.1
* Before adjusting items (non-recurring items and amortisation
of acquired intangibles) and share-based payments
** Net funds are presented before the lease liability of $11.7m
(29 September 2019: $7.3m).
Financial and Corporate Highlights
-- Operational agility and our unique geographic footprint,
coupled with the decision to diversify our capabilities and
customer base, has allowed Volex to navigate an exceptionally
difficult period in the wider global economy caused by the Covid-19
pandemic
-- Underlying gross margins have continued to improve
significantly from 23.1% in H1 FY2020 to 25.1% in H1 FY2021, driven
by a disciplined approach to capital allocation and cost control
across both divisions
-- Underlying operating profit has increased by 30.8% to a
record $20.8 million resulting in our underlying operating margin
improving from 8.1% to 10.3%
-- Interim dividend increased by 10% to 1.1 pence per share
reflecting our confidence in the ongoing prospects of the
business
-- Post period end, we have today announced that we have signed
an agreement to acquire De-Ka Elektroteknik Sanayi ve Ticaret
Anonim Sirketi ("DEKA"), a leading European power cord manufacturer
headquartered in Turkey, accelerating our strategy of creating the
most efficient and lowest-cost global producer in the industry
-- We have also signed a new, three-year $100 million
multi-currency revolving credit facility to replace our current $30
million credit facility, increasing our capacity for investment in
future growth. The facility consists of a $70 million committed
facility with a $30m accordion feature and is effective from 12
November 2020
-- Daren Morris has left the Board with immediate effect and
will be leaving the business. Jon Boaden, who joined the business
in April 2019 as Deputy Chief Financial Officer, has been promoted
to the role of CFO. We have also announced that Sir Peter
Westmacott, a senior British Diplomat, has agreed to join the Board
as an Independent Non-Executive Director and member of the
Company's Nominations Committee.
Operational and Divisional Highlights
-- Power Products - sales of products for use in electric
vehicles grew by 78% year-on-year and overall profitability
continues to improve due to our focus on automation and vertical
integration
-- Integrated Manufacturing Services - we have improved
profitability levels as a result of our focus on higher value-added
products despite very challenging conditions in the medical
installation business as a result of Covid-19
-- Upgrade of capacity and facilities - during the period we
have relocated our Suzhou plant to a new state-of-the-art facility
and we have also commenced work on our new cable extrusion plant in
Batam which we expect to be operational by the summer of 2021
Outlook
-- Having delivered a robust performance in the first half of
the year, coupled with a strong forward order-book, the Board
remains confident in delivering on full-year expectations, absent
any material disruptions to our business that may be caused by
Covid-19
-- We continue to monitor the dynamic and evolving situation in
relation to the Covid-19 pandemic closely and are mindful of the
impact that future government-imposed restrictions designed to
control the spread of the virus could have on our business in
various geographies
-- The longer-term prospects for our business remain strong and
we continue to invest in increasing capacity in our key facilities
to meet customer demand and to implement vertical integration to
improve our competitiveness and profitability
Nat Rothschild, Volex's Executive Chairman said:
"Our response to the unprecedented challenges of Covid-19 is a
fitting testament to Volex's forward planning, resilience and
agility. In a period of profound global disruption, we have
prioritised keeping our people safe and protecting our operations
while growing our operating profit, improving our margins and
continuing to progress well with our strategic objectives.
This relentless focus on operational and process improvements
gives us sufficient confidence to increase our interim dividend by
10%.
Today we have also announced our acquisition of DEKA, a
world-class Power Products business. As one of the two leading
power cord producers in Europe, with a strong management team and a
world-class customer list, DEKA is a perfect fit with our business
model, and the acquisition accelerates our strategy of creating the
most efficient and lowest-cost global producer in the industry,
providing an immediate and scalable European platform.
Our outlook for the remainder of the year remains unchanged,
absent any material disruptions that may be caused by Covid-19, and
we continue to invest across the business in order to meet customer
demand and deliver on our long-term growth prospects."
For further information please contact:
+44 (0)7747 488
Volex plc 785
Nat Rothschild, Executive Chairman
Jon Boaden, Chief Financial Officer
N+1 Singer - Nominated Adviser & Joint Broker +44 (0)20 7496 3000
Shaun Dobson
Iqra Amin
Panmure Gordon - Joint Broker +44 (0)20 7886 2500
Hugh Rich
Powerscourt - Media Enquiries + 44 (0)20 7250 1446
James White
Jack Holden
About Volex plc
Volex plc (AIM:VLX) is a leading integrated manufacturing
specialist. The Group designs and manufactures products that ensure
a critical connection never fails and are used in everything from
defibrillators and ventilators through to data networking equipment
and vehicle telematics. Headquartered in the United Kingdom, Volex
serves the needs of its blue-chip customer base from its
manufacturing sites located across nine countries and three
continents, employing over 6,000 people. Volex's products are sold
through its own global sales force and through distributors to
Original Equipment Manufacturers ('OEMs') and Electronic
Manufacturing Services companies. For more information please visit
www.volex.com
RESULTS FOR THE 26 WEEKSED 4 OCTOBER 2020
Group overview
Volex occupies a unique niche through our capability in
integrated manufacturing services. Having 14 factories located in
key manufacturing hubs and a size and scale that only a very small
number of competitors can match, Volex is set to benefit from an
accelerating trend towards supply chain consolidation.
In a world becoming more global and interconnected, our
customers demand larger global suppliers to support them as they
consolidate their fragmented supplier bases. We have seen this
trend particularly in the medical technology sector and on the
Power side of Volex's business. Customers demand scale, reputation,
quality and a global presence, all of which Volex can provide.
The Covid-19 pandemic and the implementation of import tariffs
by the US government have shown how important it is to be able to
offer multiple manufacturing locations to our customers and our
diversification has proven to be a key strength over the past six
months.
Our ability to identify acquisitions in a highly fragmented
market is also a key part of our success. These acquisitions enable
us to acquire competencies such as the capability to manufacture
complete sub-systems, electro-mechanical as well as electronic
sub-assemblies, and advanced niche PCB assembly products, in order
to become more valuable to our customers.
The ongoing benefits of moving up the value chain and deepening
integration with our customers is a key element of our strategy,
and as a result of our strong balance sheet and the prioritisation
of free cash flow over revenue, we retain a high degree of
strategic flexibility, allowing us to continue to look for
value-enhancing acquisitions while remaining committed to a
progressive dividend policy.
Today we announced the acquisition of DEKA, a world-class Power
Products manufacturer. This positions us as a global market leader
in the Power Products industry. Combining DEKA's strong position in
Europe with our significant scale in North America and Asia will
unlock customer opportunities and allow us to identify substantial
supply chain synergies.
As announced today, Daren Morris, who initially joined the
business in June 2014 as a Non-Executive Director before becoming
Chief Financial Officer in September 2014, has left the Board with
immediate effect and will be leaving the business. Jon Boaden, who
joined the business in April 2019 as Deputy Chief Financial
Officer, has been promoted to the role of CFO having played a key
role in the significant growth and development of the Group's
business since joining over 18 months ago. Separately Sir Peter
Westmacott, a senior British diplomat, has agreed to join the Board
as an Independent Non-Executive Director and member of the
Company's Nominations Committee. His substantial record,
acknowledged by successive Prime Ministers, of policy and business
delivery, will be a key asset to Volex.
We are also pleased to have signed a new $70 million
multi-currency revolving credit facility with a $30 million
accordion feature to replace our current $30 million credit
facility. The new facility has a three-year term with the option of
a one-year extension. It is provided by three relationship banks
and was oversubscribed.
Finally, we will also pay an interim dividend of 1.1 pence per
share on 15 December 2020 to those shareholders on the register as
at 20 November 2020. We are delivering strong and consistent cash
flows and this supports our intention to maintain a sustainable and
progressive dividend policy as we move forward.
Covid-19
The challenges posed by Covid-19 first became apparent when we
re-opened our Chinese facilities following an extended lunar new
year closure in February 2020. We put in place precautionary best
practice measures to protect our employees in these sites, and as
we realised that the pandemic was spreading rapidly across the
globe, we rapidly rolled out these 'best practices' across all our
locations. Our factory teams globally have performed exceptionally
by implementing and maintaining these measures, all of which remain
in place.
However, no prevention activity can guarantee that we will not
see any disruption at our key locations and, while we believe that
we are taking appropriate steps to mitigate the risk posed by
Covid-19, we continue to monitor infection rates among our
workforce and the subsequent impact on our operational activities
closely.
More broadly, we also remain acutely aware of the impact that
future government-imposed restrictions designed to control the
spread of the virus could have on our business, our customers and
our partners in various geographies.
Trading performance overview
The half year to 4 October 2020 has seen the Group continue to
grow and deliver improved margins.
$'000 26 weeks ended 26 weeks ended
4 October 29 September
2020 2019
Total Total
Revenue 202,465 195,706
Cost of Sales (151,706) (150,429)
---------------- ---------------
Underlying gross
profit* 50,759 45,277
Underlying gross
margin 25.1% 23.1%
Operating costs (29,951) (29,331)
---------------- ---------------
Underlying operating
profit* 20,808 15,946
================ ===============
Underlying operating
margin 10.3% 8.1%
---------------- ---------------
* Before adjusting items and share-based payment charges
Revenue for the first half of the year is up by 3.5% on the
comparable period in FY2020. We have seen some variations in
customer demand due to the pandemic.
In our Integrated Manufacturing Services ("IMS") division,
demand for data centre products has been strong with an increase in
sales of nearly 50% over the prior period. Sales into medical
end-markets have shown variability depending on the application.
Our largest customer in this segment has seen increased demand, but
a number of smaller customers in the imaging and oncology-related
markets have seen significant delays in orders and installations
due to difficulty in accessing hospitals stemming from restrictions
in relation to the Covid-19 pandemic.
Demand for our high-speed data centre products has been
excellent, with sales up by 57%. This reflects strong underlying
demand drivers as the move to remote working has increased global
reliance on cloud computing. In addition, data centre customers
have looked to reduce their supply chain exposure by building
inventory. The pandemic disrupted sales to a number of our medical
and industrial technology customers during the period, but we are
starting to see an improvement in demand from these customers.
Overall, the strength in the data centre product sales has helped
to offset weakness in medical and industrial, and margins have
improved.
Demand for Power Products ("Power") started slowly as a number
of our customers responded to the challenges of operating under
pandemic conditions. Sales volumes improved during the period with
all our Power sites at high levels of utilisation at the end of the
first half, and a strong performance from the sale of our new
products for the electric vehicles market.
Profitability in H1 FY2021 has shown a significant improvement
in comparison to H1 FY2020. Margins in both divisions have
increased as a result of a change in mix towards higher-margin
products and customers.
Margins have also improved due to lower input costs. This has
come from a combination of lower copper prices, beneficial foreign
exchange rates and price reductions negotiated with suppliers. The
favourable position on copper and foreign exchange rates may not
continue in the second half as we see a weakening of the US dollar
and an increase in the price of copper and other commodities.
Travel costs were significantly lower than usual in the first half
of the year and we expect this to continue for the remainder of the
year.
Integrated Manufacturing Services
$'000 26 weeks 26 weeks 53 weeks
ended 4 ended 29 ended
October September 5 April
2020 2019 2020
Revenue 114,723 104,613 220,346
---------- ------------ ---------
Underlying gross
profit 30,852 26,917 54,801
Underlying gross
margin 26.9% 25.7% 24.9%
Operating costs (15,627) (15,196) (31,460)
---------- ------------ ---------
Underlying operating
profit 15,225 11,721 23,431
========== ============ =========
Underlying operating
margin 13.3% 11.2% 10.6%
---------- ------------ ---------
Customers trust Volex to deliver connectivity solutions in a
variety of performance-critical applications including medical
devices, data centres and advanced industrial technology. With a
customer-centric approach and experienced production engineers who
ensure we maintain rigorous quality standards, Volex is a
manufacturing partner for some of the biggest names in
technology.
Revenue for H1 FY2021 was $114.7 million, up 9.7% on the prior
period. This includes six months of revenue from Servatron, a
business we acquired in July 2019, rather than the two months of
Servatron revenue in the comparative period.
We are very proud of our capabilities in the medical devices
supply chain. We were involved in a number of projects to
accelerate the manufacture and delivery of devices specifically
intended to support patients being treated for the effects of
Covid-19. At the same time, demand for the critical data
connectivity products we manufacture for large diagnostic imaging
and radiological and surgical treatment devices was materially
lower. This reflects the fact that many hospitals have postponed
scheduled installations and maintenance while the facilities focus
on dealing with the pandemic and have suspended non-critical
procedures. We believe that the underlying demand for
installations, maintenance and upgrades remains, but the timing of
a recovery will be dependent on our customers being able to return
to having normalised access to medical facilities.
There has been an improvement to both underlying gross margin
and underlying operating margin. This has been achieved through an
improvement in product mix and savings in production costs. The
strength of the US dollar, which is the primary sales currency,
versus many emerging market currencies where we operate has also
helped margins during the period.
We continue to focus on quality which delivers benefits to our
bottom line. Much of the improvement is delivered through
re-engineering our processes as well as investing in equipment to
deliver exceptional consistency and high throughput.
Power Products
$'000 26 weeks 26 weeks 53 weeks
ended 4 ended 29 ended
October September 5 April
2020 2019 2020
Revenue 87,742 91,093 171,008
---------- ------------ ---------
Underlying gross
profit 19,907 18,360 35,860
Underlying gross
margin 22.7% 20.2% 21.0%
Operating costs (11,436) (11,213) (21,807)
---------- ------------ ---------
Underlying operating
profit 8,471 7,147 14,053
========== ============ =========
Underlying operating
margin 9.7% 7.8% 8.2%
---------- ------------ ---------
Volex designs and manufactures power cords and related products
that are sold to the manufacturers of a broad range of electrical
and electronic devices and appliances. Volex products are used in
home entertainment and home computing devices, domestic and
personal healthcare appliances, power tools and electric vehicles.
Many of our customers are global household names operating in
premium segments of the consumer market.
Revenues in the first half were marginally lower in comparison
to the same period in the previous year. Although all Volex Power
Products sites were open and fully operational during the period,
in the first quarter some customers experienced disruption to
production which reduced demand for both consumer electronics and
electric vehicle products.
Our high-quality and well-engineered products have been well
received by customers for electric vehicle applications. Revenue
from our automotive customers is up 78% year-on-year and this
segment now represents over 15% of our sales for Power Products in
the first half of the year. We believe that there is significant
further opportunity for growth in this area.
As many countries saw a shift to homeworking, we saw strong
sales into the consumer electronics segment once our customers
resumed normal operations in late April and May. This trend
continued throughout the period. With demand strong in this area,
we maximised our production to support our customers. This resulted
in high levels of utilisation across all Power Products sites in
the second quarter of FY2021.
Underlying gross margins have improved from 20.2% to 22.7%. Last
year we acquired Ta Hsing, a cable extrusion business. We have made
excellent progress integrating this capability into our Power
Products division, reducing input costs and improving margins. We
also continue to roll out targeted automation. This is focused on
the areas where it gives us the best return and is compatible with
our requirements to maintain a flexible manufacturing approach.
Most sales are in US dollars, but a proportion of the cost base is
in the local currency relevant to the production location. The
strength of the dollar has helped improve margins, as have lower
costs for certain raw materials.
Group adjusting items and share-based payments
Adjusting items and share-based payments totalled $6.5 million
in the period (H1 FY2020: $5.6 million). These costs are made up of
$2.3 million (H1 FY2020: $2.8 million) of amortisation of
acquisition-related intangible assets, $4.0 million (H1 FY2020:
$2.6 million) of share-based payments expense and $0.2 million (H1
FY2020: $0.2 million) of acquisition costs related to the
acquisition of DEKA. Share-based payments include awards made to
incentivise senior management as well as awards granted to the
management teams within acquired companies.
Group taxation
The Group incurred a tax credit of $1.1 million (H1 FY2020: tax
charge of $2.0 million), representing an effective tax rate of
-7.4% (H1 FY2020: 20.1%). The underlying tax charge of $nil (H1
FY2020: $2.4 million) represents an ETR of 0.2% (H1 FY2020:
15.7%).
An underlying deferred tax credit of $2.9 million (H1 FY2020:
charge of $1.2 million) arose due to an increase in the deferred
tax asset recognised on trading losses and short-term timing
differences due to the utilisation based on future forecast taxable
profits in certain regions. As at the reporting date the Group has
recognised deferred tax assets of $12.2 million (H1 FY2020: $ 3.4
million, FY2020: $9.0m). Of this deferred tax asset $6.5 million
(H1 FY2020: $2.4 million, FY2020: $4.5 million) is in relation to
tax losses and $5.7 million (H1 FY2020: $1.0 million, FY2020: $4.5
million) in relation to short term timing differences.
Group net debt and cash flows
We are pleased to have signed a new $100 million multi-currency
revolving credit facility to replace our current $30 million credit
facility. The new facility has a three-year term with the option of
a one-year extension. The facility consists of a $70m committed
facility with a $30m accordion feature and is effective from 12
November 2020. It is provided by three relationship banks and was
oversubscribed.
The new facility has a more relaxed net debt to EBITDA covenant
as compared to the existing credit facility which will give the
Group more flexibility to undertake future acquisitions. This
facility provides additional headroom and further scope to make
value-accretive investments to grow our business.
Our business is cash generative with excellent cash conversion.
Coming into the period, levels of inventory were lower than usual
as a result of the pandemic. During the first half of the year,
inventory has increased, replenishing finished goods in our
customer hub locations. This has offset an element of the cash
generated by our underlying business operations.
Net funds (before lease liabilities) was unchanged from the year
end standing at $32.0 million ($32.1 million at 5 April 2020). The
Group generated a free cash flow after capital expenditure and tax,
but before the cost of acquisitions, of $8.0 million. This included
a cash operating inflow of $23.5 million and an adverse working
capital movement of $11.0 million, as well as capital expenditure
of $2.6 million and tax paid of $1.8 million. The adverse working
capital movement is due to very low inventory levels at the end of
FY2020 when customers had consumed Power Products stock while the
production sites were closed for an extended Lunar New Year holiday
due to the pandemic. In the first half of FY2021 inventory levels
have returned to normal, causing an adverse working capital
movement. Accounts receivable and accounts payable also increased
as invoicing and supply chain activity returned to normal levels
following the sites closures . The Group had lease liabilities of
$11.7 million. This produces a statutory net funds position of
$20.3 million.
Risks and uncertainties
Risks to Volex are anticipated and regularly assessed and
internal controls are enhanced where necessary to ensure that such
risks are appropriately mitigated. There are a number of potential
risks that could have a material impact on the Group's financial
performance. The principal risks and uncertainties include
competitive threats, legal and regulatory issues, dependency on key
suppliers or customers, movements in commodity prices or exchange
rates, and quality issues. These risks and the relevant
risk-mitigation activities are set out in the FY2020 Annual Report
and Accounts on pages 30 to 34, a copy of which is available on the
website at www.volex.com.
Outlook
We remain closely focused on ensuring our employees' welfare and
are planning for a range of possible outcomes in relation to the
ongoing Covid-19 pandemic.
Having delivered a robust performance in the first half of the
year, coupled with a strong forward order-book, the Board remains
confident in delivering on full-year expectations, absent any
material disruptions to our business that may be caused by
Covid-19.
The longer-term prospects for our business remain strong and we
continue to invest in increasing capacity in our key facilities to
meet customer demand and to implement vertical integration to
improve our competitiveness and profitability.
Nat Rothschild Jon Boaden
Group Executive Chairman Group Chief Financial Officer
12 November 2020 12 November 2020
Unaudited consolidated income statement
For the 26 weeks ended 4 October 2020 (26 weeks ended 29
September 2019)
26 weeks ended 4 October 26 weeks ended 29 September
2020 2019
Adjusting Adjusting
Before items and Before items
Adjusting share-based Adjusting and share-based
items payments Total items payments Total
Notes $'000 $'000 $'000 $'000 $'000 $'000
------------------------------ ----- ---------- ------------ --------- ---------- ---------------- ---------
Revenue 2 202,465 - 202,465 195,706 - 195,706
Cost of sales (151,706) - (151,706) (150,429) - (150,429)
------------------------------ ----- ---------- ------------ --------- ---------- ---------------- ---------
Gross profit 50,759 - 50,759 45,277 - 45,277
Operating expenses (29,951) (6,502) (36,453) (29,331) (5,559) (34,890)
------------------------------ ----- ---------- ------------ --------- ---------- ---------------- ---------
Operating profit 2 20,808 (6,502) 14,306 15,946 (5,559) 10,387
Share of net profit from
associates 637 - 637 - - -
Finance income 155 - 155 93 - 93
Finance costs (720) - (720) (776) - (776)
Profit on ordinary activities
before taxation 20,880 (6,502) 14,378 15,263 (5,559) 9,704
Taxation 4 (37) 1,096 1,059 (2,401) 451 (1,950)
------------------------------ ----- ---------- ------------ --------- ---------- ---------------- ---------
Profit for the period
attributable to the owners
of the parent 20,843 (5,406) 15,437 12,862 (5,108) 7,754
------------------------------ ----- ---------- ------------ --------- ---------- ---------------- ---------
Earnings per share (cents)
Basic 5 13.7 10.2 8.8 5.3
Diluted 5 12.9 9.5 8.5 5.1
------------------------------ ----- ---------- ------------ --------- ---------- ---------------- ---------
53 weeks ended 5 April
2020
Adjusting
Before Items and
Adjusting share-based
items payments Total
Notes $'000 $'000 $'000
------------------------------ ----- ---------- ------------ ---------
Revenue 2 391,354 - 391,354
Cost of sales (300,693) - (300,693)
------------------------------ ----- ---------- ------------ ---------
Gross profit 90,661 - 90,661
Operating expenses (59,031) (14,545) (73,576)
------------------------------ ----- ---------- ------------ ---------
Operating profit 2 31,630 (14,545) 17,085
Share of net loss from
associates - - -
Finance income 328 - 328
Finance costs (1,552) - (1,552)
------------------------------ ----- ---------- ------------ ---------
Profit on ordinary activities
before taxation 30,406 (14,545) 15,861
Taxation 4 (3,504) 2,339 (1,165)
------------------------------ ----- ---------- ------------ ---------
Profit/(loss) for the
period attributable to
the owners of the parent 26,902 (12,206) 14,696
------------------------------ ----- ---------- ------------ ---------
Earnings per share (cents)
Basic 5 18.2 9.9
Diluted 5 17.3 9.5
------------------------------ ----- ---------- ------------ ---------
Unaudited consolidated statement of comprehensive income
For the 26 weeks ended 4 October 2020 (26 weeks ended 29
September 2019)
(Audited)
26 weeks 26 weeks 53 weeks
to to to
5 October 29 September 5 April
2020 2019 2020
$'000 $'000 $'000
-------------------------------------------------- ------------- ---------------- ----------
Profit for the period 15,437 7,754 14,696
Items that will not be reclassified subsequently
to profit or loss :
Actuarial loss on defined benefit pension
schemes (148) (488) (1,343)
Tax relating to items that will not be 359 - -
reclassified
-------------------------------------------------- ------------- ---------------- ----------
211 (488) (1,343)
Items that may be reclassified subsequently
to profit or loss :
Gain/(loss) arising on cash flow hedges
during the period 2,067 (771) (2,266)
Exchange gain/(loss) on translation of
foreign operations 2,705 (1,558) 151
Tax relating to items that may be reclassified (65) - -
-------------------------------------------------- ------------- ---------------- ----------
4,707 (2,329) (2,115)
Other comprehensive income/(loss) for
the period 4,918 (2,817) (3,458)
Total comprehensive income for the period 20,355 4,937 11,238
-------------------------------------------------- ------------- ---------------- ----------
Unaudited consolidated statement of financial position
As at 4 October 2020 (29 September (Audited)
2019)
4 October 29 September 5 April
Note 2020 2019 2020
$'000 $'000 $'000
------------------------------------ ------ ----------- -------------- ----------
Non-current assets
Goodwill 26,767 25,751 25,760
Other intangible assets 13,842 18,498 15,537
Property, plant and equipment 22,577 22,152 21,565
Right of use assets 9,381 5,709 8,345
Investments in associates 637 - -
Other receivables 4,590 2,829 4,488
Deferred tax asset 12,158 3,353 8,955
------------------------------------ ------ ----------- -------------- ----------
89,952 78,292 84,650
------------------------------------ ------ ----------- -------------- ----------
Current assets
Inventories 66,878 54,394 57,995
Trade receivables 70,655 76,587 56,382
Other receivables 9,158 7,162 7,987
Current tax assets 1,908 1,772 2,154
Derivative financial instruments 379 - -
Cash and bank balances 8 34,229 17,880 32,305
------------------------------------ ------ ----------- -------------- ----------
183,207 157,795 156,823
------------------------------------ ------ ----------- -------------- ----------
Total assets 273,159 236,087 241,473
------------------------------------ ------ ----------- -------------- ----------
Current liabilities
Borrowings 8 2,198 9,922 225
Trade payables 47,914 39,815 39,653
Other payables 42,211 35,958 38,453
Current tax liabilities 9,193 4,299 8,384
Retirement benefit obligation 1,038 989 982
Lease liabilities 3,648 3,568 3,498
Provisions 929 661 834
Derivatives financial instruments 170 393 1,819
107,301 95,605 93,848
------------------------------------ ------ ----------- -------------- ----------
Net current assets 75,906 62,190 62,975
------------------------------------ ------ ----------- -------------- ----------
Non-current liabilities
Borrowings - 38 -
Other payables 1,435 1,557 570
Non-current tax liabilities - 1,134 -
Deferred tax liabilities 3,032 6,529 6,130
Retirement benefit obligation 2,323 1,378 2,492
Lease liabilities 8,040 3,715 7,385
Provisions 293 263 516
15,123 14,614 17,093
------------------------------------ ------ ----------- -------------- ----------
Total liabilities 122,424 110,219 110,941
------------------------------------ ------ ----------- -------------- ----------
Net assets 150,735 125,868 130,532
------------------------------------ ------ ----------- -------------- ----------
Equity attributable to owners of
the parent
Share capital 6 60,322 59,566 60,189
Share premium account 46,414 46,414 46,414
Non-distributable reserve 2,455 2,455 2,455
Hedging and translation reserve (4,799) (9,720) (9,506)
Own shares 7 (590) (1,509) (1,024)
Retained earnings 46,933 28,662 32,004
------------------------------------ ------ ----------- -------------- ----------
Total equity 150,735 125,868 130,532
------------------------------------ ------ ----------- -------------- ----------
Unaudited Consolidated Statement of Changes in Equity
For the 26 weeks ended 4 October 2020 (26 weeks ended 29
September 2019)
Non-distribut-able Hedging
reserves and Retained
Share premium translation earnings/ Total
Share capital account reserve Own shares (losses) equity
$'000 $'000 $'000 $'000 $'000 $'000 $'000
--------------------- ------------- ------------- ------------------ ------------ ---------- ---------- -------
Balance 31 March
2019 58,792 44,532 2,455 (7,391) (1,890) 19,150 115,648
Profit for the period
attributable to the
owners of the parent - - - - - 7,754 7,754
Other comprehensive
income/ (loss) for
the period - - - (2,329) - (488) (2,817)
--------------------- ------------- ------------- ------------------ ------------ ---------- ---------- -------
Total comprehensive
income/ (loss) for
the period - - - (2,329) - 7,266 4,937
Shares issued 692 1,882 - - - - 2,574
Exercise of deferred
bonus shares 82 - - - - (82) -
Own shares
sold/(utilised)
in the period - - - - 381 (139) 242
Reserve entry for
share option
charges/(credit) - - - - - 2,467 2,467
Balance at 29
September
2019 59,566 46,414 2,455 (9,720) (1,509) 28,662 125,868
--------------------- ------------- ------------- ------------------ ------------ ---------- ---------- -------
Balance 5 April 2020 60,189 46,414 2,455 (9,506) (1,024) 32,004 130,532
Profit for the period
attributable to the
owners of the parent - - - - - 15,437 15,437
Other comprehensive
income/ (loss) for
the period - - - 4,707 - 211 4,918
--------------------- ------------- ------------- ------------------ ------------ ---------- ---------- -------
Total comprehensive
income/ (loss) for
the period - - - 4,707 - 15,648 20,355
Exercise of deferred
bonus shares 133 - - - - (133) -
Own shares
sold/(utilised)
in the period - - - - 434 (1,912) (1,478)
Dividend - - - - - (3,791) (3,791)
Reserve entry for
share option
charges/(credit) - - - - - 2,911 2,911
Tax effect of share
options - - - - - 2,206 2,206
Balance at 4 October
2020 60,322 46,414 2,455 (4,799) (590) 46,933 150,735
--------------------- ------------- ------------- ------------------ ------------ ---------- ---------- -------
Unaudited consolidated statement of cash flows
For the 26 weeks ended 4 October 2020 (26 weeks ended 29
September 2019)
*RESTATED (Audited)
26 weeks 26 weeks 53 weeks
to to to
4 October 29 September 5 April
Notes 2020 2019 2020
$'000 $'000 $'000
------------------------------------------- ------- ------------- --------------- ----------
Profit for the period 15,437 7,754 14,696
Adjustments for:
Finance income (155) (92) (328)
Finance costs 720 775 1,552
Income tax (income)/expense (1,059) 1,950 1,165
Share of net profit from associates (637) - -
Depreciation of property, plant and
equipment 1,863 1,836 3,643
Depreciation of right-of-use asset 1,540 - 2,714
Impairment of right-of-use asset - - 65
Effects of foreign exchange rate
changes - 7 5
Amortisation of intangible assets 2,311 2,811 5,749
Loss on disposal of property, plant
and equipment 47 521 838
Share option charge 4,048 2,629 8,737
(Decrease)/increase in provisions (643) (741) (1,090)
------------------------------------------- ------- ------------- --------------- ----------
Operating cash flow before movements
in working capital 23,472 17,450 37,746
Decrease/(increase) in inventories (7,506) 1,153 (2,943)
Decrease/(increase) in receivables (13,720) 4,534 20,499
(Decrease)/increase in payables 10,178 (6,974) 2,041
Movement in working capital (11,048) (1,287) 19,597
Cash generated by operations 12,424 16,163 57,343
------------- --------------- ----------
Cash generated by operations before
adjusting items 12,614 17,574 58,749
Cash utilised by adjusting items (190) (1,411) (1,406)
------------- --------------- ----------
Taxation paid (1,796) (2,330) (5,135)
Interest paid (191) (483) (473)
------------------------------------------- ------- ------------- --------------- ----------
Net cash generated from operating
activities 10,437 13,350 51,735
------------------------------------------- ------- ------------- --------------- ----------
Cash flow from investing activities
Interest received 12 7 22
Acquisition of businesses, net of
cash acquired 9 - (22,701) (22,701)
Contingent consideration for businesses
acquired (1,142) - (2,850)
Proceeds on disposal of property,
plant and equipment 108 177 564
Purchases of property, plant and
equipment (2,518) (1,915) (4,910)
Purchases of intangible assets (76) (7) (40)
Proceeds from the repayment of preference
shares 25 - 25
Net cash used in investing activities (3,591) (24,439) (29,890)
------------------------------------------- ------- ------------- --------------- ----------
Cash flow before financing activities 6,846 (11,089) (21,845)
------------- --------------- ----------
Cash (used)/generated before adjusting
items 7,036 (9,678) (23,251)
Cash utilised in respect of adjusting
items (190) (1,411) (1,406)
------------- --------------- ----------
*Restatement: The net purchase of shares for share schemes was
reclassified from investing to financing activities to reflect the
nature of the transactions. This is consistent with the
presentation in the FY2020 financial report.
Unaudited consolidated statement of cash flows (continued)
For the 26 weeks ended 4 October 2020 (26 weeks ended 29
September 2019)
(Audited)
26 weeks * RESTATED 53 weeks
to to
4 October 26 weeks to 5 April
Notes 2020 29 September 2020
2019
$'000 $'000 $'000
Cash flow before financing activities 6,846 (11,089) 21,845
Cash flow from financing activities
Dividend paid (3,791) - (1,956)
Net purchase of shares for share
schemes (1,552) 394 (4,634)
New bank loan raised - 7,000 7,000
Other loans 2,584 - -
Repayment of borrowings (43) (7,097) (7,056)
Refinancing costs paid - (592) (659)
Interest element of lease payments (315) - (553)
Payment of lease liabilities (1,948) (1,257) (3,150)
Receipt from lease debtor 267 - 499
Net cash used in financing activities 8 (4,798) (1,552) (10,509)
---------------------------------------- ------- ------------- ---------------- ----------
Net increase/(decrease) in cash
and cash equivalents 2,048 (12,641) 11,336
Cash and cash equivalents at beginning
of period 8 31,649 20,593 20,593
Effect of foreign exchange rate
changes 532 (550) (280)
---------------------------------------- ------- ------------- ---------------- ----------
Cash and cash equivalents at end
of period 8 34,229 7,402 31,649
---------------------------------------- ------- ------------- ---------------- ----------
*Restatement: The net purchase of shares for share schemes was
reclassified from investing to financing activities to reflect the
nature of the transactions. This is consistent with the
presentation in the FY2020 financial report.
Notes to the Interim Statements
1. Basis of preparation
These interim financial statements have been prepared in
accordance with IAS 34 'Interim Financial Reporting' as adopted by
the European Union. The condensed consolidated interim financial
information should be read in conjunction with the annual financial
statements for the 53 weeks ended 5 April 2020, which were prepared
in accordance with IFRSs as adopted by the European Union.
This condensed consolidated interim financial information does
not comprise statutory accounts within the meaning of section 434
of the Companies Act 2006. The financial information presented for
the 26 weeks ended 4 October 2020 ('H1 FY2021') and the 26 weeks
ended 29 September 2019 ('H1 FY2020') has not been reviewed by the
auditors. The financial information for the 53 weeks ended 5 April
2020 ('FY 2020') is extracted and abridged from the Group's full
accounts for that year. The statutory accounts for FY2020 have been
filed with the Registrar of Companies for England and Wales and
have been reported on by the Group's auditors. The Report of the
Auditors was not qualified and did not contain a statement under
section 498 of the Companies Act 2006.
The Directors confirm that, to the best of their knowledge, the
interim financial statements have been prepared in accordance with
IAS 34 'Interim Financial Reporting' as adopted by the European
Union and the AIM Rules for Companies, and that the interim report
includes a fair review of the information required. The interim
report was approved by the Board of Directors on 11 November
2020.
This interim report can be downloaded or viewed via the Group's
website at www.volex.com . Copies of the annual report for the 53
weeks ended 5 April 2020 are available at the Company's registered
office at Unit C1 Antura, Bond Close, Basingstoke, Hampshire,
England, RG24 8PZ, and can also be downloaded or viewed via the
Group's website.
Subsequent to the end of the period, the Group signed a new,
three-year $100 million multi-currency revolving credit facility to
replace our current $30 million credit facility. The facility has
an available limit of $70 million (FY2020: $30 million). The
facility consists of a $70m committed facility with a $30m
accordion feature and is effective from 12 November 2020. As at 4
October 2020 the Group had net funds of $20.3 million.
The Group's forecast and projections, taking reasonable account
of possible changes in trading performance and the cash outflow
associated with the acquisition of DEKA, show that the Group should
continue to operate with sufficient headroom under the revolving
credit facility for the foreseeable future. The Directors believe
that the Group is well placed to manage its business within the
available facilities. Accordingly, they continue to adopt the going
concern basis in preparing these condensed financial
statements.
These condensed financial statements have also been prepared
using accounting policies consistent with International Financial
Reporting Standards as adopted for use in the European Union
('IFRS') and consistent with those disclosed in the annual report
and accounts for the year ended 5 April 2020. The only new
significant accounting policy relates to the accounting for
Government Grants.
1. Basis of preparation (continued)
In line with IAS20 'Accounting for Government Grants',
government grants are recognised when there is reasonable assurance
that it will be received and that the Group will comply with the
conditions attached to it. Government grants intended to compensate
the Group for expenses incurred are deducted from the relevant
costs in the income statement on a systematic basis in the same
periods in which the expenses are incurred, unless the conditions
for receiving the grant are met after the related expenses have
been recognised. In this case, the grant is recognised when it
becomes receivable. Government grants intended to compensate the
Group for the acquisition of an asset are deducted from the
acquisition cost of the related asset. This policy has been applied
during the period to government incentives in respect of the Suzhou
site relocation.
Impact of standards issued but not yet applied by the Group
There are no new standards, amendments to standards or
interpretations that are expected to have a material impact on the
Group's results.
2. Business and geographical segments
Business segments
The internal reporting provided to the Group's Board for the
purpose of resource allocation and assessment of Group performance
is based upon the nature of products which the Group supplies. As
certain sites of the Group become capable of supplying both Power
Products and IMS customers we continue to evaluate the best way of
segmenting our financial performance. In addition to the operating
divisions, a Central division exists to capture all of the
corporate costs incurred in supporting the operations.
Division Description
Power Products The sale and manufacture of power cords, duck heads
(formerly and related products that are sold to manufacturers
Power Cords) of a broad range of electrical and electronic devices
and appliances. Volex products are used in laptops,
PCs, tablets, printers, TVs, games consoles, power
tools, kitchen appliances and electric vehicles.
-----------------------------------------------------------
Integrated The sale and manufacture of higher-level assemblies
Manufacturing and connectors (ranging from high-speed copper cables
Services to complex multi-branch high reliability systems) that
(formerly transfer electronic, radio-frequency and optical data.
Complex Assemblies) Volex products are used in a variety of applications
including medical equipment, data-networking equipment,
data centres, wireless base stations, mobile computing
devices, factory automation and vehicle telematics.
-----------------------------------------------------------
Central Central costs are those that are not directly attributable
to the manufacture and sale of the Group's products,
but which support the Group in its operations. Included
within this division are the costs incurred by the
executive management team and the corporate head office.
-----------------------------------------------------------
The following is an analysis of the Group's revenues and results
by reportable segment.
26 weeks to 4 October 26 weeks to 29 September
2020 2019
--------------------------------------- ------------------------ ---------------------------
Revenue Profit/(loss) Revenue Profit/(loss)
$'000 $'000 $'000 $'000
--------------------------------------- -------- -------------- ---------- ---------------
Power Products 87,742 8,471 91,093 7,147
Integrated Manufacturing Services 114,723 15,225 104,613 11,721
Unallocated central costs (excluding
share-based payments) (2,888) (2,922)
--------------------------------------- -------- -------------- ---------- ---------------
Divisional results before share-based
payments and adjusting items 202,465 20,808 195,706 15,946
Adjusting items (2,454) (2,931)
Share-based payments (4,048) (2,628)
--------------------------------------- -------- -------------- ---------- ---------------
Operating profit 14,306 10,387
Share of net profit from associates 637 -
Finance income 155 93
Finance costs (720) (776)
--------------------------------------- -------- -------------- ---------- ---------------
Profit before tax 14,378 9,704
Tax 1,059 (1,950)
--------------------------------------- -------- -------------- ---------- ---------------
Profit after tax 15,437 7,754
--------------------------------------- -------- -------------- ---------- ---------------
2. Business and geographical segments (continued)
53 weeks to 5 April
2020
-------------------------------------------- ---------- ------------------------
Revenue Profit/(loss)
$'000 $'000
-------------------------------------------- ---- ---- -------- --------------
Power Products 171,008 14,053
Integrated Manufacturing Services 220,346 23,341
Unallocated central costs (excluding share-based
payments) - (5,764)
-------------------------------------------------------- -------- --------------
Divisional results before share-based
payments and Adjusting items 391,354 31,630
Adjusting items (5,808)
Share-based payments (8,737)
-------------------------------------------------------- -------- --------------
Operating profit 17,085
Share of net result from associates -
Finance income 328
Finance costs (1,552)
-------------------------------------------------------- -------- --------------
Profit before tax 15,861
Tax (1,165)
-------------------------------------------------------- -------- --------------
Profit after tax 14,696
-------------------------------------------------------- -------- --------------
The accounting policies of the reportable segments are in
accordance with the Group's accounting policies.
The adjusting items charge within operating profit for the
period of $2,454,000 (H1 FY2020: $2,931,000, FY2020: $5,808,000)
was split $190,000 (H1 FY2020: $nil, FY2020: $58,000) to Power
Products, $2,264,000 (H1 FY2020: $2,769,000, FY2020: $5,750,000) to
IMS and $nil (H1 FY2020: $162,000, FY2020: $nil) to Central.
Other segmental information
External revenue Non-current assets
(excluding deferred tax assets)
------------------------------------------- -------------------------------------------
(Audited) (Audited)
26 weeks 26 weeks to 53 weeks 26 weeks 26 weeks to 53 weeks
to to to to
4 October 29 September 5 April 4 October 29 September 5 April
2020 2019 2020 2020 2019 2020
$'000 $'000 $'000 $'000 $'000 $'000
---------- ------------- ---------------- ---------- ------------- ---------------- ----------
Geographical segments
Asia 72,704 75,303 140,133 22,869 19,267 21,469
North
America 74,538 68,231 145,081 24,715 15,963 25,826
Europe 55,223 52,172 106,140 30,210 39,709 28,400
202,465 195,706 391,354 77,794 74,939 75,695
---------- ------------- ---------------- ---------- ------------- ---------------- ----------
3. Adjusting items and share-based payments
(Audited)
26 weeks to 26 weeks to 53 weeks to
4 October 29 September 5 April
2020 2019 2020
$'000 $'000 $'000
----------------------------------------------------------- ------------- ---------------- -------------
Amortisation of acquired intangibles 2,264 2,769 5,652
Acquisition costs 190 162 156
Total adjusting items 2,454 2,931 5,808
Share-based payments charge 4,048 2,628 8,737
----------------------------------------------------------- ------------- ---------------- -------------
Total adjusting items and share-based payments before tax 6,502 5,559 14,545
----------------------------------------------------------- ------------- ---------------- -------------
Adjusting items tax credit (1,096) (451) (2,339)
----------------------------------------------------------- ------------- ---------------- -------------
Adjusting items and share-based payments after tax 5,406 5,108 12,206
----------------------------------------------------------- ------------- ---------------- -------------
Adjusting items include costs that are one-off in nature and
significant (such as significant restructuring costs, impairment
charges or acquisition related costs) and the non-cash amortisation
of intangible assets recognised on acquisition.
The adjusting items and share-based payments are included under
the statutory classification appropriate to their nature but are
separately disclosed on the face of the income statement to assist
in understanding the underlying financial performance of the
Group.
Associated with the acquisitions, the Group has recognised
certain intangible assets related to customer relationships and
order backlogs. During H1 FY2021, the amortisation charge on these
intangible assets totalled $2,264,000 (FY2020 H1 $2,769,000,
FY2020: $5,652,000). The amortisation of these intangibles is
non-cash and split between Servatron ($1,151,000), GTK ($535,000),
Silcotec ($550,000) and MC Electronics ($28,000).
Acquisition-related costs of $190,000 (FY2020 H1: $162,000,
FY2020: $156,000) are related to acquisition of DEKA. These costs
cover due diligence and legal fees associated with the
transactions. In the prior year, the Group incurred acquisition
related costs of $156,000, split between $98,000 for Servatron Inc
and $58,000 for Ta Hsing Industries Limited. These costs
represented legal fees associated with the transactions.
4. Tax charge
The Group tax charge for the period is based on the forecast tax
charge for the year as a whole and has been influenced by the
differing tax rates in the UK and the various overseas countries in
which the Group operates.
The Group incurred a tax credit of $1.1 million (H1 FY2020: tax
charge of $2.0 million), representing an effective tax rate of
-7.4% (H1 FY2020: 20.1%). The underlying tax charge of $nil (H1
FY2020: $2.4 million) represents an ETR of 0.2% (H1 FY2020:
15.7%).
An underlying deferred tax credit of $2.9 million (H1 FY2020:
charge of $1.2 million) arose due to an increase in the deferred
tax asset recognised on trading losses and short-term timing
differences due to the utilisation based on future forecast taxable
profits in certain regions.
5. Earnings per ordinary share
The calculations of the earnings per share are based on the
following data:
(Audited)
26 weeks 26 weeks 53 weeks
to to to
4 October 29 September 5 April
2019
Earnings 2020 $'000 2020
$'000 $'000
------------------------------------------- -------------------- -------------------- -----------
Earnings for the purpose of basic earnings
per share 15,437 7,754 14,696
Adjustments for:
Adjusting items 2,454 2,931 5,808
Share-based payments charge 4,048 2,628 8,737
Tax effect of above adjustments and other
adjusting item tax movements (1,096) (451) (2,339)
------------------------------------------- -------------------- -------------------- -----------
Underlying earnings 20,843 12,862 26,902
------------------------------------------- -------------------- -------------------- -----------
Weighted average number of ordinary shares No. shares No. shares No. shares
------------------------------------------- -------------------- -------------------- -----------
Weighted average number of ordinary shares
for the purpose of basic earnings per
share 151,816,604 146,651,798 148,057,993
Effect of dilutive potential ordinary
shares - share options 10,370,884 5,807,934 7,339,875
------------------------------------------- -------------------- -------------------- -----------
Weighted average number of ordinary shares
for the purpose of diluted earnings per
share 162,187,488 152,459,732 155,397,868
------------------------------------------- -------------------- -------------------- -----------
Basic earnings per share Cents Cents Cents
------------------------------------------ ------ ------ ------
Basic earnings per share from continuing
operations 10.2 5.3 9.9
Adjustments for:
Adjusting items 1.6 2.0 3.9
Share-based payments charge 2.6 1.8 6.0
Tax effect of above adjustments and
other adjusting items tax movements (0.7) (0.3) (1.6)
------------------------------------------ ------ ------ ------
Underlying basic earnings per share 13.7 8.8 18.2
------------------------------------------ ------ ------ ------
Diluted earnings per share (Audited)
26 weeks 26 weeks 53 weeks
to to to 5 April
4 October 29 September 2020
2020 2019 $'000
$'000 $'000
--------------------------------------- ------------ --------------- -------------
Diluted earnings per share 9.5 5.1 9.5
Adjustments for:
Adjusting items 1.5 2.0 3.7
Share-based payments charge 2.6 1.7 5.6
Tax effect of above adjustments and
other adjusting items tax movements (0.7) (0.3) (1.5)
--------------------------------------- ------------ --------------- -------------
Underlying diluted earnings per share 12.9 8.5 17.3
--------------------------------------- ------------ --------------- -------------
The underlying earnings per share has been calculated on the
basis of continuing activities before adjusting items and the
share-based payments charge, net of tax. The Directors consider
that this earnings per share calculation gives a better
understanding of the Group's earnings per share in the current and
prior period.
6. Share capital
(Audited)
26 weeks 26 weeks to 53 weeks
to to
4 October 29 September 5 April
2020 2019
$'000 $'000 2020
$'000
------------------------------------ ------------- ---------------- ----------
Issued and fully paid:
152,250,802 (FY2020: 151,818,762)
Ordinary shares of 25p each 60,322 59,566 60,189
------------------------------------ ------------- ---------------- ----------
On 1 July 2020, the Group issued 432,040 shares under the 2019
deferred share bonus plan.
7. Own shares
(Audited)
26 weeks 26 weeks to 53 weeks
to to
4 October 29 September 5 April
2020 2019
$'000 $'000 2020
$'000
--------------------------------------- ------------- ---------------- ----------
At the start of the period 1,024 1,890 1,890
--------------------------------------- ------------- ---------------- ----------
Disposed of in the period on exercise
of options (434) (381) (2,630)
--------------------------------------- ------------- ---------------- ----------
Purchase of shares - - 1,764
--------------------------------------- ------------- ---------------- ----------
At end of the period 590 1,509 1,024
--------------------------------------- ------------- ---------------- ----------
The own shares reserve represents the cost of shares in the
Company held by the Volex Group plc Employee Share Trust to satisfy
future share option exercises under the Group's share option
schemes.
On the 29 April 2020, the Trust disposed of 250,000 shares to
satisfy the exercise of share options. The number of ordinary
shares held by the Volex Group plc Employee Share Trust at 5
October 2020 was 206,576 (H1 FY2020: 1,410,983, FY2020:
456,576).
8. Analysis of net funds/(debt)
Other
5 April New Cash Exchange movement $'000 non-cash changes 4 October
2020 leases flow $'000 2020
$'000 $'000 $'000 $'000
------------------------- --------- --------- -------- ------------------------- ------------------ -----------
Cash & cash equivalents 31,649 - 2,048 532 - 34,229
Bank loans (79) - 42 - - (37)
Other loans - - (2,584) - - (2,584)
Debt issue costs 510 - - 27 (114) 423
Lease liability (10,883) (2,555) 2,263 (198) (315) (11,688)
------------------------- --------- --------- -------- ------------------------- ------------------ -----------
Net funds 21,197 (2,555) 1,769 361 (429) 20,343
------------------------- --------- --------- -------- ------------------------- ------------------ -----------
4 October 2020 29 September 2019 5 April
$'000 $'000 2020
$'000
--------------------------- --------------- ------------------ --------
Cash and bank balances 34,229 17,880 32,305
Overdrafts - (10,478) (656)
Cash and cash equivalents 34,229 7,402 31,649
--------------------------- --------------- ------------------ --------
The carrying amount of the Group's financial assets and
liabilities is considered to be equivalent to their fair value.
9. Related parties
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note.
The Group has a 26.09% interest in Kepler SignalTek Limited,
which is accounted for as an associate. During the period the Group
accrued financial income of $97,000 on the preference shares (H1
FY2020: $85,000, FY2020: $196,000). The balance due from the
associate as at the period end date was $2,055,000 (H1 FY2020:
$1,910,000, FY2020: $1,990,000).
The Group also has a 43% interest in Volex-Jem Co. Ltd. During
the period the Group purchased $nil (H1 FY2020: $107,000, FY2020:
$116,000) materials from Volex - Jem Cable Precision (Dongguan) Co.
Limited, an entity controlled by Volex-Jem Co. Ltd. The balance due
to the associates as at the period end was $81,000 (H1 FY2019:
$88,000, FY2020: $115,000).
A number of share transactions with Directors have occurred
during the period in line with share awards outstanding at the
prior year end and as disclosed in the annual accounts for FY2020
and in line with the Director shareholding notices disclosed on the
Volex website ( www.volex.com ).
10. Contingent Liabilities
As a global Group, subsidiary companies, in the normal course of
business, engage in significant levels of cross-border trading. The
customs, duties and sales tax regulations associated with these
transactions are complex and often subject to interpretation. While
the Group places considerable emphasis on compliance with such
regulations, including appropriate use of external legal advisors,
full compliance with all customs, duty and sales tax regulations
cannot be guaranteed.
Through the normal course of business, the Group provides
manufacturing warranties to its customers and assurances that its
products meet the required safety and testing standards. When the
Group is notified that there is a fault with one of its products,
the Group will provide a rigorous review of the defective product
and its associated manufacturing process, and if found at fault and
contractually liable will provide for costs associated with recall
and repair, as well as rectifying the manufacturing process or
seeking recompense from its supplier. The Group does not provide
for such costs where fault has not yet been determined and
investigations are ongoing.
11. Events after the balance sheet date
Effective from the 12 November 2020 the Group signed a new,
three-year $100 million multi-currency revolving credit facility to
replace the current $30 million credit facility. The facility
consists of a $70 million committed facility with a $30 million
accordion feature.
On the 12 November 2020 the Company announced the proposed
acquisition of the entire issued share capital of De-Ka
Elektroteknik Sanayi ve Ticaret Anonim irketi ("DEKA"), for a total
consideration of up to EUR61.8 million, on a debt free basis. The
Acquisition is expected to close in January 2021, subject to
approval by the Turkish Competition Authority and admission of the
newly issued shares to trading on AIM.
This information is provided by RNS, the news service of the
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END
IR GPGUWGUPUPPG
(END) Dow Jones Newswires
November 12, 2020 02:00 ET (07:00 GMT)
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