TIDMVLX
RNS Number : 0392C
Volex PLC
13 June 2019
13 June 2019
Volex plc
Preliminary Announcement of the Group Results
for the 52 weeks ended 31 March 2019
"We continue to diversify our customer base and execute our
strategy to be a stable, long-term and trusted partner to our
clients. The recovery at Volex continues."
Volex plc ('Volex'), a global provider of power and data cabling
solutions, today announces its preliminary results for the 52 weeks
ended 31 March 2019 ('FY2019').
52 weeks to Year on 52 weeks
31 March 2019 year change to
Financial Highlights 1 April 2018
------------------------------ --------------- ------------- --------------
Revenue $372.1m 15.4% $322.4m
Underlying* operating profit $21.6m 87.8% $11.5m
Statutory operating profit $13.0m 47.7% $8.8m
Underlying* profit before
tax $20.2m 108.2% $9.7m
Statutory profit before
tax $11.6m 65.7% $7.0m
Statutory profit after tax $9.2m 135.9% $3.9m
Basic earnings per share 6.9c 56.8% 4.4c
Underlying diluted earnings
per share 12.7c 42.7% 8.9c
Net cash (note 8) $20.6m 108.1% $9.9m
* Before adjusting items and share-based payments charge (see note 3 for more details)
Summary
-- Revenue growth of 15.4% including $44.8 million contribution from acquisitions
-- Underlying operating profit increased by 87.8% to $21.6 million
-- Statutory profit after tax increased by 135.9% to $9.2 million
-- Net cash of $20.6 million as at the year end
-- Gross margin has improved to 19.8% in FY2019 from 17.4% in FY2018
Management expects to announce the reinstatement of a dividend
at the time of the interim results in November 2019.
The Executive Chairman of Volex, Nat Rothschild, commented:
"Over the past year we have continued to deliver on our stated
strategy to refresh our customer base and grow our business with
both new and existing customers. This has resulted in a significant
increase in profitability at Volex, and our group is now in a much
stronger position than it has been for many years.
We have made three successful acquisitions during the year,
which have added new customers, capability and geographic presence
to the Cable Assemblies division. As we build scale in this
division we believe that we have the capability to be a trusted
global partner to our customers.
Cost inflation continues to be a common theme across all of the
countries in which we operate and we are continuing to invest in
automation across the group to mitigate this inflation. In
addition, the effect of US import tariffs on Chinese production has
resulted in Volex moving certain production capacity to alternative
locations outside of China, which has resulted in additional
administrative and investment costs for the group. In spite of
these headwinds we have significantly improved our profitability in
our core business, and I am pleased to report an 87.8% increase in
our underlying operating profit.
Volex's core markets are expected to remain highly competitive
in the near term but we remain focused on improving our business
and our performance. Both our divisions occupy market-leading
positions and are well placed through their unique geographic
footprint.
There remain substantial identifiable opportunities for both
divisions to improve sales and margin performance through
disciplined execution of our strategy, in both the short and longer
term, and we expect to deliver further value to our shareholders in
the year ahead. I remain excited about the Company's prospects and
our team continues to actively look for new opportunities to grow
our business and technical capabilities."
For further information please contact:
Volex plc
Nat Rothschild, Executive Chairman +65 6788 7833
Daren Morris, Group Chief Financial Officer +44 7909 995887
N+1 Singer - Nominated Adviser & Joint Broker +44 20 7496 3000
Shaun Dobson
Justin McKeegan
Whitman Howard - Joint Broker +44 20 7659 1234
Hugh Rich
Nick Lovering
Forward looking statements
Certain statements in this announcement are forward-looking
statements which are based on Volex's expectations, intentions and
projections regarding its future operating performance and
objectives, anticipated events or trends and other matters that are
not historical facts. Forward-looking statements are sometimes, but
not always, identified by their use of a date in the future or such
words as 'anticipates', 'aims', 'could', 'may', 'should',
'expects', 'believes', 'intends', 'plans', 'targets', 'goal' or
'estimates'. By their very nature forward-looking statements are
inherently unpredictable, speculative and involve risk and
uncertainty because they relate to events and depend on
circumstances that will occur in the future. There are a number of
factors that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking
statements. Factors that could cause or contribute to such
differences include, by way of example only and not limited to,
general economic conditions, currency fluctuations, competitive
factors, the loss of one of our major customers, failure of one or
more major suppliers and changes in raw materials or labour costs
among other risks. Given these risks and uncertainties, prospective
investors are cautioned not to place undue reliance on
forward-looking statements. Forward-looking statements speak only
as of the date of such statements and, except as required by
applicable law, Volex undertakes no obligation to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
Market Abuse Regulation
This announcement is released by Volex plc and contains inside
information for the purposes of the Market Abuse Regulation (EU)
596/2014 ("MAR") and is disclosed in accordance with the Company's
obligations under Article 17 of MAR.
Executive Chairman's Statement
The year ended 31 March 2019 ("FY2019") has seen continued
progress in our operational, strategic and financial development.
We have added new customers, invested in organic growth, completed
three acquisitions and, as our turnaround gathers pace, we have
developed significant operational expertise to maximise the Group's
return on assets. As a result, our profit margins have improved
once again. Whilst we are faced with many challenges, and there is
still much to do to achieve our full potential, we start the new
financial year in excellent financial health, with a motivated team
and the financial resources to continue to grow and improve our
market position.
Our strategic goals remain unchanged. We aim to continue to
improve our cost position in the manufacture of power cords and to
develop our presence in value-added segments of the power market
such as electric vehicles. In cable assemblies we continue to
benefit from the need of our global customers to outsource both
simple and highly complex assemblies to a stable partner with a
truly global manufacturing footprint. By targeting both organic
growth and strategic acquisitions we see our opportunity to move
further up the value chain. As we increase our scale and technical
capabilities through continued development and innovation, we are
accessing higher value opportunities in our core medical, data
centre and industrial end markets.
Recent performance
Revenue for FY2019 was $372.1 million, an increase of 15.4% over
the prior year. Stripping out the effect of the acquisitions made
during the year and the revenue from our largest Power Cords
customer, which continued its managed decline, revenue was up 9%
year on year. In Power Cords, the growth came from our continued
success in the electric vehicle segment, supporting a large
manufacturer with their home charging cables. We continue to see
more opportunities in electric vehicles for Volex and have taken
steps to register and protect our proprietary technology and
manufacturing know-how.
In Cable Assemblies we saw growth across all our main market
segments of data centre connectivity, medical and industrial
equipment. Demand from customers in our largest geographic market,
North America, was particularly strong during the period. Going
forward we expect continued growth in Cable Assemblies as we
acquire new customers that seek exposure to a global partner like
Volex. We are already seeing the benefits that scale can bring
through our recent acquisitions and expect the Cable Assemblies
business to be larger than our Power Cords business, in revenue
terms, over the coming year.
We were particularly pleased with the improvement in gross
margin during the year from 17.4% to 19.8% despite continued cost
inflation and competitive pressures on pricing. The improvement in
gross margin occurred in both our operating divisions and is a
result of the hard work by management to rationalise our factory
and office footprint, and a continuous focus on improving
profitability across all of our locations, product lines and
customers. Each of our factories improved their profitability year
on year, and the acquisitions that we have made also contributed to
the increase in gross margin in the Cable Assemblies division.
Underlying operating expenses at $51.9 million increased by
16.7% year on year. This was due to the acquisitions made during
the year and also as a result of our strong financial performance
triggering increased bonus payments for our staff.
Cost inflation is a common theme across all of the countries in
which we operate and we are therefore continuing to invest in
automation across the group to mitigate this inflation. In
addition, the effect of US import tariffs on Chinese production has
resulted in Volex moving certain production capacity to alternative
locations outside of China which has resulted in additional
administrative and investment costs for the group.
Overall underlying pre-adjustment operating profit for the year
was $21.6 million, up 87.8% from $11.5 million in the prior year.
Our operating margin is above 5% for the first time in seven
years.
Acquisitions
We have made three successful acquisitions during the year that
have added new customers, capability and geographic presence to the
Cable Assemblies division.
In April 2018 we acquired MC Electronics, with manufacturing
facilities in California and Mexico. MC brings a number of new
medical and industrial customers to Volex, and increased exposure
to the US market.
In July 2018 we acquired Silcotec Europe Limited, a manufacturer
of complex medical and industrial cables and sub-assemblies with a
manufacturing facility in Slovakia.
In December 2018 we acquired GTK, a UK-based manufacturer of
customised electronic solutions including cable assemblies,
displays and connectors, providing additional product expertise and
the opportunity for cross-selling. GTK has its head office and
manufacturing facilities in Basingstoke, with additional
manufacturing capacity in Romania.
Financial Flexibility
We ended FY2019 with a net cash balance of $20.6 million, up
from $9.9 million in FY2018. As a global group we rely on a portion
of this cash to support ongoing working capital fluctuations and
capital investment. However, a substantial proportion of this cash
is available to continue to grow Volex through acquisition and
allow us to increase our profitability and further diversify our
revenue mix.
We are currently in discussions with our banks Lloyds Banking
Group plc and HSBC Bank plc to extend our senior credit facility to
provide us with further financial flexibility. The current facility
is due to expire in June 2019, but is currently undrawn.
People
Our recent success can be attributed to the skill and dedication
of all of our employees across the globe, who accepted that without
wholesale change, Volex might not survive. The past few years have
been extremely difficult, and our employees have shown great
resilience as we have reduced production capacity and emerged with
a leaner and more competitive business.
On behalf of our Board and our shareholders, I would like to
thank all our employees for all of their hard work and
dedication.
As we start to aggressively grow the business once again, we
recognise the need to invest in and to motivate our people. We have
recently taken steps to strengthen our corporate leadership team,
including finance, legal and our global human resources function,
to ensure that we have the right resources, remuneration structures
and succession planning in place going forward.
Outlook
Volex's core markets are expected to remain highly competitive
in the near-term but we remain focused on improving our business
and our performance. Both our divisions occupy market-leading
positions and are well placed through their unique geographic
footprint.
There remain substantial identifiable opportunities for both
divisions to improve sales and margin performance through
disciplined execution of our strategy, in both the short and longer
term, and we expect to deliver further value to our shareholders in
the year ahead. I remain excited about the Company's prospects and
our team continues to actively look for new opportunities to grow
our business and technical capabilities.
Nathaniel Rothschild
Executive Chairman
Review of FY2019 Performance
Volex is a leading global supplier of power cords and cable
assembly solutions, servicing a diverse range of markets and
customers, including consumer electronics, medical equipment, data
centres, telecommunications, industrial robotics and the automotive
industry. Our products are sold through our own global sales force
and through distributors to Original Equipment Manufacturers and
Electronic Manufacturing Services companies.
Headquartered in the UK, following recent acquisitions we now
have 12 manufacturing facilities located across nine countries. The
factories are supported by sales and/or administrative offices in
another 11 countries, as well as a number of leased warehouses and
stock hubs close to our key customers in order to support their
global operational requirements.
FY2019 FY2018
$'000 Before
Before adjusting Adjusting
adjusting Adjusting items items
items and items and and share and share
share based share based based based
payments payments Total payments payments Total
Revenue
Power Cords 198,885 - 198,885 203,569 - 203,569
Cable Assemblies 173,219 - 173,219 118,808 - 118,808
------------- ------------- -------- ----------- ----------- --------
372,104 - 372,104 322,377 - 322,377
Gross profit
Power Cords 36,377 36,377 33,877 (146) 33,731
Cable Assemblies 37,141 - 37,141 22,112 - 22,112
------------- ------------- -------- ----------- ----------- --------
73,518 - 73,518 55,989 (146) 55,843
Gross margin 19.8% 19.8% 17.4% 17.3%
Operating profit
Power Cords 13,229 (1,672) 11,557 12,112 (628) 11,484
Cable Assemblies 13,473 (3,589) 9,884 3,522 (305) 3,217
Central costs (5,096) (965) (6,061) (4,177) (619) (4,796)
Share-based payments
expense - (2,388) (2,388) - (1,132) (1,132)
------------- ------------- -------- ----------- ----------- --------
21,606 (8,614) 12,992 11,457 (2,684) 8,773
Operating margin 5.8% 3.5% 3.6% 2.7%
Share of net
loss of associates (210) - (210) (192) - (192)
Net finance costs (1,147) - (1,147) (1,586) - (1,586)
Taxation (2,650) 221 (2,429) (1,519) (1,551) (3,070)
Profit after
tax 17,599 (8,393) 9,206 8,160 (4,235) 3,925
============= ============= ======== =========== =========== ========
Due to the different market environments and technical product
requirements, the Group reports under a two-divisional structure:
the Power Cords division and the Cable Assemblies division.
Power Cords Division
52 weeks
52 weeks ending
1 April
ending 2018
31 March
$'000 2019 (restated)**
Revenue 198,885 203,569
---------- --------------
Underlying* gross profit 36,377 33,877
---------- --------------
Underlying* gross margin 18.3% 16.6%
---------- --------------
Operating costs (23,148) (21,765)
---------- --------------
Underlying* operating profit 13,229 12,112
---------- --------------
Underlying* operating margin 6.7% 6.0%
---------- --------------
Operating profit 11,557 11,484
------------------------------ ---------- --------------
* Before adjusting items and share-based payments charge.
** Certain revenues and costs associated with specific customers
were transferred between the Power Cords and Cable Assemblies
division in order that each factory could be wholly identifiable as
a Power Cords or Cable Assemblies contributor.
Volex designs and manufactures power cords, duck heads and
related products that are sold to manufacturers 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, vacuum cleaners and electric
vehicles. Volex is one of the world's largest global power cable
suppliers. Our global presence differentiates us from our
fragmented China-based competition, and is increasingly important
as companies look to source products from outside of China.
The market for power cords is highly competitive, with customers
deploying multi-sourcing strategies and expecting regular
productivity improvements and price reductions over the product
lifecycle. In order to compete effectively, suppliers in the market
require efficient large-scale production facilities in low-cost
regions.
The Power Cords division's key manufacturing facilities are
located in South-East China, Indonesia and Vietnam. However, all
the Group's facilities throughout the world can be utilised to
manufacture power cord products if required. With the key raw
materials produced in China, our manufacturing tends to be
concentrated in the two South-East China factories.
The Power Cords divisional revenue for FY2019 was $198.9
million, down 2.3% on the prior period. This decrease included a
reduction in revenue of 42.8% from the largest customer in the
Power Cords division, where we have been managing the decline in
revenue for a number of years. This customer now ships a USB-C
charger rather than a traditional power cord with its laptops and
their current duck head products are due to go end of life over the
next 12 months. We are therefore expecting revenues from this
customer to continue to decline. As a result of this decline,
restructuring of the operations at the Shenzhen factory continued
during the year.
Other customers in the Power Cords division demonstrated strong
growth. Excluding the sales to our largest Power Cords customer
described in the previous paragraph, revenue grew by 10.3% from
$155.0 million to $171.1 million. In particular, sales with one of
the world's leading electric vehicle manufacturers more than
doubled year on year. This provides an indication of the how the
division is able to respond to changing technology and provide
innovative solutions.
During the year the Group closed the factory in India and moved
production to other facilities in the Group. Investment has
continued in the factory in Batam, which is likely to become the
principal location for Power Cords production growth outside of
China, with some PVC production lines transferring across.
Gross margin has been improved by the removal of negative margin
products from our portfolio and improvements in productivity and
scrap rates following the roll-out of Kaizen manufacturing
initiatives. Negative margins have now been eliminated and the
focus has shifted to understanding and correcting product cost or
selling price, where margins are particularly low. We review our
prices each quarter to ensure that acceptable levels of
profitability are maintained.
A targeted automation programme is being rolled out in
Zhongshan, creating productivity gains. This is combined with the
reconfiguration of operations across the Chinese factories to
maximise factory output and achieve greater fixed-cost recovery.
Actions have included moving all PVC production from Shenzhen to
Zhongshan, which will allow us to remove fixed cost in Shenzhen and
benefit from lower labour rates in Zhongshan.
Further efficiency and automation benefits will come from the
standardisation of the Power product offering, reducing the number
of variants of essentially the same product. As a result, a new
range of products, "V-Novus Hybrid", was developed during the year.
The engineering team is currently working to secure safety
approvals on these new products and once certified all new sales
will be made using the new range, with Volex also looking to
transition existing customers to these products.
Many of our competitors operating in China have highly
vertically integrated supply chains which allow them to offer a
lower price on the end product. A review of opportunities to reduce
input costs by integrating parts of our supply chain is
ongoing.
The introduction of tariffs on Chinese manufactured goods
brought into the USA is likely to have an impact on decisions
around where to manufacture products to be sold into this market.
In addition, there is a risk that our competitors will be willing
to reduce prices to maintain volumes in their factories in response
to falling demand from US customers. This situation will be
monitored closely. The flexibility to re-locate manufacturing
across our global production estate is one option to mitigate the
impact of the tariffs.
Cable Assemblies Division
52 weeks
ending
52 weeks 1 April
ending 2018
31 March
$'000 2019 (restated)**
Revenue 173,219 118,808
---------- --------------
Underlying* gross profit 37,141 22,112
---------- --------------
Underlying* gross margin 21.4% 18.6%
---------- --------------
Operating costs (23,668) (18,590)
---------- --------------
Underlying* operating profit 13,473 3,522
---------- --------------
Underlying* operating margin 7.8% 3.0%
---------- --------------
Operating profit 9,884 3,217
------------------------------ ---------- --------------
* Before adjusting items and share-based payments charge.
** Certain revenues and costs associated with specific customers
were transferred between the Power Cords and Cable Assemblies
division in order that each factory could be wholly identifiable as
a Power Cords or Cable Assemblies contributor.
Volex designs and manufactures a broad range of cables and
connectors (ranging from high-speed copper and fibre optic cables
to complex customised optical cable assemblies) that transfer
electronic, radio-frequency and optical data. Volex products are
used in a variety of applications including data networking
equipment, data centres, wireless base stations and cell site
installations, mobile computing devices, medical equipment, factory
automation, vehicle telematics, agricultural equipment and
alternative energy generation.
The Cable Assemblies division has its manufacturing facilities
in North America, Mexico, Europe and China, all within close
proximity to many existing and potential new customers. It operates
in a fragmented market that is growing rapidly. Volex has several
strong niche positions within data centres and the telecoms and
healthcare sectors where customers utilise Volex expertise and
manufacturing competencies.
The division's product range is split into two categories:
-- High-speed - primarily copper, but also optical, passive and
active cabling solutions that transmit data at rapid rates.
High-speed products are used extensively in telecom and data centre
environments.
-- Interconnect - bespoke cabling solutions designed to transmit
data and DC power in the most effective means for our customers'
needs. Volex competes by producing highly engineered,
high-performance, application-specific cables, in close
collaboration with its customers.
Revenue for FY2019 was $173.2 million, up 45.8% on the prior
year. This includes revenue of $44.8 million from the three
acquisitions, all of which are reported within the Cable Assemblies
division. Excluding the acquisitions, revenue increased by $9.6
million, an improvement of 8.1% on the prior year. This increase
arose principally from the high-speed interconnect solutions and
healthcare sectors, with a large online retailer providing
significant growth in the period. However, that growth has been
partially offset by the decline seen from a key US transportation
and telematics customer. As we have noted previously, demand from
this customer is cyclical and after a year of high demand, this
year Volex is seeing reduced activity.
Underlying gross profit improved by $15.0 million, which
included $12.1 million from the three acquisitions. The $2.9
million organic improvement includes the benefit of selected price
increases agreed in the second half of FY2019 and a resolution of
certain operational issues that had a negative impact on the
performance of the Tijuana facility in the prior year. This
improvement represents an increase in the gross margin (excluding
acquisitions) from 18.6% in FY2018 to 19.6% in FY2019. The
acquisitions improve the margins further as a result of the
contribution from higher-margin products, delivering a blended
margin of 21.4%.
Of the $5.1 million increase in operating costs, $6.2 million
was attributable to the acquisitions with $1.1 million of savings
in the traditional business. The organic increase in operating
costs was broadly in line with the increase in like-for-like
revenue. Operating costs continue to represent an area of focus for
the division, in order to continue to improve the future
operational profit margins.
The acquisitions made during the year present a great
opportunity to develop and improve the Cable Assemblies division.
The acquired entities have a number of significant relationships
with customers that are either new to the Group or where there has
been little traction in the past. This creates a platform for the
cross-selling of the full suite of Volex Cable Assemblies and Power
Cords products.
Looking forward, the Cable Assemblies division is targeting
growth through new business development and further penetration of
existing accounts. The acquired businesses include talented sales
specialists who will complement the existing sales organisation.
There are plans to be first to market with next-generation
high-speed copper data cables that we expect will be popular with
data centre customers as demand for ever-increasing bandwidth
continues.
The focus on efficiency will continue in the coming year with
further Kaizen initiatives in the plants and the introduction of
automation where this improves our financial returns. By
maintaining a strong focus on quality and delivering products at
competitive prices, the division is targeting sales growth. This
will be underpinned by efforts to improve customer engagement in
the sales lifecycle through centralising the quotation process and
ensuring consistency in pricing.
Financial Review
52 weeks to 52 weeks to
31 March 2019 1 April 2018
Revenue Profit/(loss) Revenue Profit/(loss)
$'000 $'000 $'000 $'000
-------- -------------- -------- --------------
Power Cords division 198,885 13,229 203,569 12,112
-------- -------------- -------- --------------
Cable Assemblies division 173,219 13,473 118,808 3,522
-------- -------------- -------- --------------
Unallocated central costs (5,096) (4,177)
-------- -------------- -------- --------------
Divisional underlying
results 372,104 21,606 322,377 11,457
------------------------------- -------- -------------- -------- --------------
Adjusting operating items (6,226) (1,552)
-------- -------------- -------- --------------
Share-based payments (2,388) (1,132)
-------- -------------- -------- --------------
Operating profit 12,992 8,773
-------- -------------- -------- --------------
Share of loss from associates (210) (192)
-------- -------------- -------- --------------
Net finance costs (1,147) (1,586)
-------- -------------- -------- --------------
Profit before taxation 11,635 6,995
-------- -------------- -------- --------------
Taxation (2,429) (3,070)
-------- -------------- -------- --------------
Profit after taxation 9,206 3,925
------------------------------- -------- -------------- -------- --------------
Basic earnings per share:
-------- -------------- -------- --------------
Statutory 6.9 cents 4.4 cents
-------- -------------- -------- --------------
Underlying 13.1 cents 9.2 cents
------------------------------- -------- -------------- -------- --------------
Trading performance
During the year, the Group completed the acquisitions of MC
Electronics LLC ('MC'), Silcotec Europe Limited ('Silcotec') and
GTK (Holdco) Limited ('GTK'). These acquisitions are included
within the Cable Assemblies division and are currently trading in
line with their acquisition plans. The acquisitions present
opportunities to drive scale and efficiencies in respect of
procurement and sales so that Volex maximises the benefits arising
from an enlarged and global Cable Assemblies division.
The three acquisitions have contributed $44.8 million to
revenue, with over 90% of that revenue derived from customers that
Volex had little or no relationship with prior to acquisition. This
has made a significant contribution to the Group's strategy of
diversifying the customer base. The acquisitions deliver higher
margin than the rest of the group partly due to their product mix
(for example higher-margin healthcare cable assemblies as opposed
to commoditised power cords) and partly due to a lower overhead
cost structure.
Group revenue increased by 1.5% excluding the impact of
acquisitions (the 'traditional' Group), from $322.4 million in
FY2018 to $327.3 million in FY2019. The like-for-like growth was
driven by a strong sales performance in the Cable Assemblies
division, where revenue increased by 8.1%, from $118.8 million in
FY2018 to $128.4 million. Power Cords revenue fell by 2.3%, from
$203.6 million to $198.9 million. It is important to note in Power
Cords, that revenue from our historically largest customer
continued to decline from $48.6 million to $27.8 million. Excluding
this customer, the remaining Power Cords revenue increased by
10.3%.
We were able to drive revenue growth in areas where we have
invested in compelling solutions and are able to deliver
high-quality products for technically demanding applications. This
included strong growth in Cable Assemblies for healthcare products
and high-speed cables for deployment in data centres and a
continuation in Power Cords of our push into the promising electric
vehicle segment.
As a Group, we continue to focus on delivering products at
competitive prices by optimising the production process and
identifying the most efficient ways of working. Where increases in
our cost base are unavoidable, we aim to have transparent
conversations with our customers regarding price increases. By
matching the types of products and product volumes to the different
characteristics of our factories, we ensure that we deliver a level
of production which covers the factory overheads and delivers an
acceptable return at each and every location. Our work to improve
productivity, manage scrap rates and roll out Kaizen manufacturing
initiatives helped increase the underlying gross margin in our
traditional business to 18.8% (FY2018: 17.4%). This was also helped
by the introduction of automated production lines in the second
half of the year, which is expected to drive further productivity
improvements in future periods.
The underlying operating profit from the traditional Volex
business (before unallocated central costs) increased by $5.2
million to $20.8 million (FY2018: $15.6 million). Controlling
operating costs continues to be an area of focus to maximise the
benefit from increases in profitability. During the year, the three
acquisitions added a further $5.9 million to operating profit. This
is an encouraging performance and we expect to make further
progress in improving profit margins in future periods.
Adjusting operating items and share-based payments
The Group has incurred costs of $8.6 million in FY2019 (FY2018:
$2.7 million).
As part of managing declining revenues from a significant Power
Cords customer, it was necessary to down-size our factory in
Shenzhen, China. This resulted in severance costs of $1.5 million.
In the previous year we incurred restructuring costs in Shenzhen,
as well as costs associated with restructuring our European and
South Korean sales teams and our Singapore regional head
office.
The Group closed its Indian manufacturing facility during the
year. Several of the key accounts previously served by the Indian
factory have been retained and will be serviced from other
factories. Volex has incurred closure costs of $0.5 million, in
relation to redundancies, asset sales and retention bonuses
(several key personnel were paid bonuses to help close the factory
in an orderly manner). During the review of the balance sheet,
certain accounting irregularities were identified that have been
fully provided for and appropriate action taken. This gave rise to
an additional net $0.3 million charge.
As a result of the three acquisitions during the year, we
incurred legal charges and some additional costs to ensure the
retention of certain key individuals who are critical to the
ultimate integration of the acquired businesses and their continued
successful operation immediately following the transaction. In
total, these costs came to $1.8 million in the period. The Group
also recognise $2.0 million of amortisation expense associated with
intangible assets recognised on acquisition.
The Group recognised a one-off pension past service cost of $0.5
million as a result of Guaranteed Minimum Pension (GMP)
equalisation. This was partially offset by a $0.3 million release
of a provision no longer required.
The share-based payments charge in the year was $2.4 million
(FY2018: $1.1 million). The increase in the charge reflects the
impact of the acquisitions as well as revised expectations of the
likelihood of meeting non-share price related performance
conditions.
Share of net loss from associates
During the year, the Group made a further investment of $1.3
million in cumulative preference shares of Kepler SignalTek
('KST'), a manufacturer of medical high-frequency data transmission
and specialist medical and industrial cable assemblies. This
product range complements the current Volex Cable Assemblies
product offering providing opportunities for cross selling. As at
year end, we hold preference shares with a value of $1.8 million in
respect of our investment.
With KST in its start-up phase, it has generated losses in the
period to 31 March 2019. As a result, the equity element of the
investment has been equity accounted to nil. The business has made
good progress in its objectives and is working with a solid list of
customers on several promising projects. The current trading
performance is in line with expectations for a business at this
point in its lifecycle, and management are confident that it has
the opportunity to develop successfully in the future.
The Group's other associate, Volex-Jem Co Ltd ('JEM'), is a
Taiwanese holding company that owns a controlling interest in a
Chinese cable production company. JEM is one of our options to
attempt to deliver vertical integration to support further
efficiencies in the Power Cords division. We continue to explore
ways to accelerate the pace and scale of vertical integration.
Net finance costs
Total net finance costs in FY2019 were $1.1 million (FY2018:
$1.6 million). The underlying reduction in net finance costs is due
to the lower average net debt level throughout FY2019 in comparison
to the prior year.
Refinancing
In June 2018, the Group raised $46.7 million through the issue
of 48 million shares at GBP0.75 each. Some of the proceeds were
used to fund the three acquisitions that were made during the
year.
The Group's $30 million senior credit facility with Lloyds
Banking Group plc and HSBC Bank plc, which was undrawn at year end,
expires in June 2019. Discussions are currently ongoing in respect
of a replacement facility to provide capacity for further
acquisitions and business growth in the future. These negotiations
are expected to be concluded successfully in due course. We do not
believe we will need to draw on the facility to meet our
operational working capital requirements in the next year.
Tax
The Group incurred a tax charge of $2.4 million (FY2018: $3.1
million) representing an effective tax rate (ETR) of 20.9% (FY2018:
43.9%). The rate in 2018 was significantly impacted by the adoption
of the US 'Tax Cuts and Jobs Act 2017' which resulted in an
adjusted tax expense in 2018 of $1.8 million in the period.
The underlying tax charge of $2.6 million (FY2018: $1.5 million)
represents an ETR of 13.1% (FY2018: 15.7%).
The underlying tax charge of $2.6 million (FY2018: $1.5 million)
comprises an underlying current tax charge of $3.4 million (FY2018:
$0.7 million) and an underlying deferred tax credit of $0.8 million
(FY2018: charge of $0.8 million).
The underlying current tax charge is calculated by reference to
the taxable profits in each individual entity and the local
statutory tax rates. Where tax losses are available, these have
been used to the fullest extent possible to extinguish the taxable
profit.
An underlying deferred tax credit of $1.5 million (FY2018:
charge of $0.8 million) arose due to an increase in the deferred
tax asset recognised on trading losses due to the utilisation based
on future forecast taxable profits in certain regions.
The adjusted tax credit of $0.2 million (FY2018: charge of $1.6
million) arises mainly on the amortisation charge on acquisitions.
In 2018 the adjusted tax charge of $1.8 million on the new US tax
legislation was off-set by a $0.2 million tax credit arising from
the adjusted operating items.
As at the reporting date the Group has recognised a deferred tax
asset $4.3 million (FY2018: $2.3 million). The Group recognised a
deferred tax asset of $3.4 million (FY2018: $1.9 million) in
relation to tax losses.
Earnings per share
Basic earnings per share for FY2019 was 6.9 cents compared to
4.4 cents in FY2018, reflecting the improved performance in FY2019.
The underlying fully diluted earnings per share was 12.7 cents
compared to 8.9 cents in FY2018.
Cash flow and net debt
Net cash increased from $9.9 million at 1 April 2018 to $20.6
million at 31 March 2019. This increase was primarily due to the
$46.7 million raised through the equity issue in June 2018 (48
million shares issued at GBP0.75 each) less the net $24.9 million
consideration paid on the acquisition of MC Electronics, Silcotec
and GTK. Immediately after the acquisition of Silcotec, the Group
funded Silcotec Europe with $2.3 million in order that it could pay
off its external loan.
Operating cash flow before movement in working capital was an
inflow of $21.2 million (FY2018: $12.5 million). The impact of
working capital movements was an outflow of $24.7 million (FY2018:
outflow $4.1 million). The outflow comprises:
-- a reduction in inventory leading to a cash inflow of $0.6
million (FY2018 outflow of $4.0 million). This improvement is due
to tighter controls on inventory in key factories.
-- an increase in receivables leading to a cash outflow of $10.2
million (FY2018: $1.7 million). This increase is due to the
increased level of trade, the acquisitions of GTK and MC
Electronics plus the fact that the Silcotec business was acquired
without any trade receivables. The cash collection of invoices
raised prior to the acquisition date was left with the seller, with
Volex responsible only for cash collection on sales
post-acquisition. At year-end, Silcotec trade debtors totalled $4.8
million.
-- an outflow related to payables of $15.1 million (FY2018: $1.5
million inflow). Following the equity raise the Group decided to
take advantage of prompt payment discounts offered by several key
suppliers in order to improve margins, resulting in a reduction in
payables.
After aggregated outflows for tax and interest of $3.2 million
(FY2018: $3.4 million) the net cash generated from operations was
an outflow of $6.7 million (FY2018: $4.9 million inflow). Of this a
$3.4 million outflow had been generated from normal trading
activity (FY2018: $5.9 million inflow) with $3.3 million spent on
adjusting items. These adjusting items include restructuring fees
(such as severance payments) and professional fees associated with
corporate activity.
The acquisition of businesses, net of cash acquired, led to an
outflow of $23.9 million (FY2018: nil). Capital expenditure in
FY2019 was $3.2 million (FY2018: $2.4 million). A further $1.3
million was invested in Kepler SignalTek preference shares (FY2018:
$0.8 million investment in associates).
Under the senior credit facility, the Group repaid $12.8 million
(FY2018: $7.3 million) in the year.
As a result of the above cash flows, the Group experienced a
$1.9 million net cash outflow (FY2018: $6.1 million) for the year.
As at 31 March 2019, the Group held net funds of $20.6 million
compared with net funds of $9.9 million at 1 April 2018.
Banking facilities, covenants and going concern
During the year, the Group had access to a $30 million
multi-currency combined revolving credit, overdraft and guarantee
facility ('RCF'). This facility was provided by a syndicate of two
banks (Lloyds Banking Group plc and HSBC Bank plc), and was undrawn
at year end.
The key terms of the facility were as follows:
-- Available until 30 June 2019;
-- No scheduled facility amortisation; and
-- Interest cover and total debt: EBITDA leverage covenants.
As at 31 March 2019, the loan facility was undrawn (FY2018:
facility was drawn in the amount of $13.6 million) with a further
$0.3 million drawn under the cash pool facility (FY2018: $1.8
million). After accounting for bonds, guarantees and letters of
credit, the remaining headroom as at 31 March 2019 was $29.1
million (FY2018: $14.2 million).
Under the terms of the facility, the two covenant tests above
must be performed at each quarter end date. Throughout FY2019 both
covenants were met.
The Group's forecasts show that the Group should, taking account
of the cash reserves available at year end, continue to operate in
compliance with its banking covenants during the remaining term of
the facility. Given the equity raise that occurred during the year,
the Directors believe that on expiry of the facility on 30 June
2019, the Group can continue its normal operations without drawing
on a facility in the next 12 months. The Group is in advanced
discussions with banks to agree a new facility to provide future
financial flexibility.
The Directors have, at the time of approving the financial
statements, a reasonable expectation that the Company and the Group
have adequate resources to continue in operational existence for at
least 12 months from year end. Accordingly, they continue to adopt
the going concern basis in preparing the financial statements.
Financial instruments and cash flow hedge accounting
The Group enters into contracts with financial institutions
which are linked to the average copper price as published by the
London Metal Exchange ('LME'). The purpose of these contracts is to
mitigate the Group's exposure to copper price volatility observed
in the Group's cost of sales.
These contracts act as an economic hedge against the impact of
copper price movements. They meet the hedge accounting requirements
of IFRS 9 and therefore are accounted for as cash flow hedges of
forecast future purchases of copper. As at 31 March 2019, a
financial asset of $0.1 million (FY2018: $0.2 million) has been
recognised in respect of the fair value of open copper contracts
with a corresponding $0.1 million credit recognised in reserves.
This credit is retained in reserves until such time as the forecast
copper consumption takes place at which point it will be recycled
through the income statement.
A credit of $0.1 million has been recognised in cost of sales in
FY2019 (FY2018: credit of $0.8 million) in respect of copper
hedging contracts that closed out during the period. This credit
has arisen since the average LME copper price in the period has
been above the contracted price.
Defined benefit pension schemes
The Group's net pension deficit under IAS 19 as at 31 March 2019
was $2.4 million (FY2018: $3.3 million). The decrease is primarily
due to the $0.9 million pension contributions made by the Company
during the period.
UK referendum on EU membership
At the time of writing, the exact nature of the UK's future
trading relationship with the EU is still unclear. At present our
power cord sales into Europe are manufactured in Asia and then
shipped to Tilbury docks in Essex before onward shipment to the end
customer. Annual European sales from our Power Cords division are
approximately $14 million, with roughly half of these sales
remaining in the UK for a UK end-customer. We have identified
alternate landing locations in mainland Europe to take delivery of
the half of sales destined for EU end-customers. For our Cable
Assemblies sales, the level of sales to UK customers is small.
Therefore we believe the impact upon the business will be
minimal.
Consolidated Income Statement
----------------------------------------------------------------------------------------------------------------------
For the 52 weeks ended 31 March 2019 (52 weeks ended 1 April
2018)
2019 2018
Adjusting Adjusting
Before items Before items
adjusting and share-based adjusting and share-based
items and payments items payments
share-based (Note and share-based (Note
payments 3) Total payments 3) Total
Notes $'000 $'000 $'000 $'000 $'000 $'000
------------------- ----- ------------ ---------------- --------- ---------------- ---------------- ---------
Revenue 2 372,104 - 372,104 322,377 - 322,377
Cost of sales (298,586) - (298,586) (266,388) (146) (266,534)
------------------- ----- ------------ ---------------- --------- ---------------- ---------------- ---------
Gross profit 73,518 - 73,518 55,989 (146) 55,843
Operating
expenses (51,912) (8,614) (60,526) (44,532) (2,538) (47,070)
------------------- ----- ------------ ---------------- --------- ---------------- ---------------- ---------
Operating profit
/ (loss) 2 21,606 (8,614) 12,992 11,457 (2,684) 8,773
Share of net loss
from associates
and
joint ventures (210) - (210) (192) - (192)
Finance income 129 - 129 20 - 20
Finance costs (1,276) - (1,276) (1,606) - (1,606)
------------------- ----- ------------ ---------------- --------- ---------------- ---------------- ---------
Profit / (loss)
on
ordinary
activities
before taxation 20,249 (8,614) 11,635 9,679 (2,684) 6,995
Taxation 4 (2,650) 221 (2,429) (1,519) (1,551) (3,070)
------------------- ----- ------------ ---------------- --------- ---------------- ---------------- ---------
Profit / (loss)
for
the period
attributable
to the owners of
the parent 17,599 (8,393) 9,206 8,160 (4,235) 3,925
------------------- ----- ------------ ---------------- --------- ---------------- ---------------- ---------
Earnings per
share
(cents)
Basic 5 13.1 6.9 9.2 4.4
Diluted 5 12.7 6.7 8.9 4.3
------------------- ----- ------------ ---------------- --------- ---------------- ---------------- ---------
Consolidated Statement of Comprehensive Income
For the 52 weeks ended 31 March 2019 (52 weeks ended 1 April 2018)
2019 2018
$'000 $'000
------------------------------------------------------------------------------------ ---- ------- --------
Profit for the period 9,206 3,925
Items that will not be reclassified subsequently to profit or loss
Actuarial gain on defined benefit pension schemes 305 870
305 870
Items that may be reclassified subsequently to profit or loss
Gain / (loss) arising on cash flow hedges during the period 180 (265)
Exchange gain / (loss) on translation of foreign operations 579 (3,631)
759 (3,896)
Other comprehensive income / (loss) for the period 1,064 (3,026)
------------------------------------------------------------------------------------------ ------- --------
Total comprehensive income for the period attributable to the owners of the parent 10,270 899
------------------------------------------------------------------------------------------ ------- --------
Consolidated Statement of Financial Position
2019 2018
As at 31 March 2019 (1 April $'000 $'000
2018) Notes
-------------------------------------- ------ --- -------- ------------------------
Non-current assets
Goodwill 17,531 2,633
Other intangible assets 11,115 498
Property, plant and equipment 20,420 17,406
Interests in associates and
joint ventures - 226
Other receivables 2,704 1,560
Deferred tax asset 4,271 2,283
-------------------------------------- ------ --- -------- ------------------------
56,041 24,606
-------------------------------------- ------ --- -------- ------------------------
Current assets
Inventories 49,122 40,686
Trade receivables 71,307 56,199
Other receivables 8,448 7,376
Current tax assets 1,092 948
Derivative financial instruments 374 192
Cash and bank balances 8 20,913 24,830
-------------------------------------- ------ --- -------- ------------------------
151,256 130,231
-------------------------------------- ------ --- -------- ------------------------
Total assets 207,297 154,837
-------------------------------------- ------ --- -------- ------------------------
Current liabilities
Borrowings 8 320 1,849
Trade payables 45,863 54,181
Other payables 30,212 25,576
Current tax liabilities 4,811 4,030
Retirement benefit obligation 975 947
Provisions 9 1,121 292
83,302 86,875
------ --- --------
Net current assets / (liabilities) 67,954 43,356
-------------------------------------- ------ --- -------- ------------------------
Non-current liabilities
Borrowings 8 - 13,033
Other payables 988 1,080
Deferred tax liabilities 4,447 2,008
Non current tax liabilities 1,134 1,242
Retirement benefit obligation 1,460 2,370
Provisions 9 318 85
8,347 19,818
------ --- --------
Total liabilities 91,649 106,693
-------------------------------------- ------ --- -------- ------------------------
Net assets 115,648 48,144
-------------------------------------- ------ --- -------- ------------------------
Equity attributable to owners
of the parent
Share capital 11 58,792 39,755
Share premium account 44,532 7,122
Non-distributable reserves 2,455 2,455
Hedging and translation reserve (7,391) (8,150)
Own shares 12 (1,890) (867)
Retained earnings 19,150 7,829
-------------------------------------- ------ --- -------- ------------------------
Total equity 115,648 48,144
-------------------------------------- ----------- -------- ------------------------
Consolidated Statement of Changes in Equity
For the 52 weeks ended 31 March 2019 (52 weeks ended 1 April 2018)
Hedging
Share and
Share premium Non-distributable translation Retained Total
capital account reserves reserve Own shares earnings equity
$'000 $'000 $'000 $'000 $'000 $'000 $'000
-------------------------- --------- --------- ------------------ ------------- ----------- ---------- --------
Balance at 2 April
2017 39,755 7,122 2,455 (4,254) (867) 2,096 46,307
Profit / (loss)
for the period
attributable
to the owners of
the parent - - - - - 3,925 3,925
Other comprehensive
income / (loss)
for the period - - - (3,896) - 870 (3,026)
-------------------------- --------- --------- ------------------ ------------- ----------- ---------- --------
Total comprehensive
income / (loss)
for the period - - - (3,896) - 4,795 899
Credit to equity
for equity-settled
share-based payments - - - - - 938 938
Balance at 1 April
2018 39,755 7,122 2,455 (8,150) (867) 7,829 48,144
Profit / (loss)
for the period
attributable
to the owners of
the parent - - - - - 9,206 9,206
Other comprehensive
income / (loss)
for the period - - - 759 - 305 1,064
-------------------------- --------- --------- ------------------ ------------- ----------- ---------- --------
Total comprehensive
income / (loss)
for the period - - - 759 - 9,511 10,270
-------------------------- --------- --------- ------------------ ------------- ----------- ---------- --------
Share issue 18,886 37,410 - - - - 56,296
Exercise of deferred
bonus shares 151 - - - - (151) -
Own shares
sold/(utilised)
in the period - - - - 75 (31) 44
Own shares purchased
in the period - - - - (1,098) - (1,098)
Credit to equity
for equity-settled
share-based payments - - - - - 1,992 1,992
-------------------------- --------- --------- ------------------ ------------- ----------- ---------- --------
Balance at 31 March
2019 58,792 44,532 2,455 (7,391) (1,890) 19,150 115,648
-------------------------- --------- --------- ------------------ ------------- ----------- ---------- --------
Consolidated Statement of Cash Flows
For the 52 weeks ended 31 March 2019 (52 weeks ended 1 April 2018)
Notes 2019 2018
$'000 $'000
--------------------------------------------------------------- ----- ---------------------- ----------------------
Net cash generated from / (used in) operating activities 7 (6,743) 4,893
Cash flow generated from / (used in) investing activities
Interest received 11 12
Acquisition of businesses, net of cash acquired (23,843) -
Proceeds on disposal of intangible assets, property, plant &
equipment 512 44
Purchases of property, plant & equipment (3,180) (2,436)
Purchases of intangible assets (163) (2)
Acquisition of own shares (net of funds received on option
exercise) (1,023) -
Purchase of Preference shares (1,300) (400)
Investment in associates - (400)
Net cash generated / (used in) investing activities (28,986) (3,182)
Cash flows before financing activities (35,729) 1,711
Cash generated / (used) before adjusting items (32,457) 2,735
Cash utilised in respect of adjusting items (3,272) (1,024)
---------------------- ----------------------
Cash flow generated from / (used in) financing activities
Refinancing costs paid - (496)
Repayment of borrowings 8 (12,826) (7,285)
Proceeds on issue of shares 46,685 -
Net cash generated from / (used) in financing activities 33,859 (7,781)
Net increase / (decrease) in cash and cash equivalents (1,870) (6,070)
Cash and cash equivalents at beginning of period 8 22,981 29,565
Effect of foreign exchange rate changes 8 (518) (514)
--------------------------------------------------------------- ----- ---------------------- ----------------------
Cash and cash equivalents at end of period 8 20,593 22,981
--------------------------------------------------------------- ----- ---------------------- ----------------------
1. Basis of preparation
The preliminary announcement for the 52 weeks ended 31 March
2019 has been prepared in accordance with the accounting policies
as disclosed in Volex plc's Annual Report and Accounts 2018, as
updated to take effect of any new accounting standards applicable
for the period as set out in Volex plc's Interim Statement
2019.
The annual financial information presented in this preliminary
announcement is based on, and is consistent with, that in the
Group's audited financial statements for the 52 weeks ended 31
March 2019, and those financial statements will be delivered to the
Registrar of Companies following the Company's Annual General
Meeting. The independent auditors' report on those financial
statements is unqualified and does not contain any statement under
section 498 (2) or 498 (3) of the Companies Act 2006.
Information in this preliminary announcement does not constitute
statutory accounts of the Group within the meaning of section 434
of the Companies Act 2006. The full financial statements for the
Group for the 52 weeks ended 1 April 2018 have been delivered to
the Registrar of Companies. The independent auditor's report on
those financial statements was unqualified and did not contain a
statement under section 498 (2) or 498 (3) of the Companies Act
2006.
Going concern
The Group has raised GBP36.0 million in equity proceeds during
the year. After deducting issue costs and conversion into US
Dollars, the net funds raised totalled $46.7 million. An element of
this funding has been used to deleverage the balance sheet and fund
the acquisitions that took place during the year. The remaining
funds will be available for future accretive M&A transactions,
investment in automation and general working capital
requirements.
The Group's forecast and projections, taking reasonable account
of possible changes in trading performance, show that the Group
should operate within the level of the proposed facility for the
period in which the facility is available and should comply with
the revised covenants over this period. Given the above equity
raise, the Directors believe that on expiry of the facility on 30
June 2019, sufficient funds will be available such that the
facility can be repaid and the Group can continue its normal
operations.
The Board is therefore confident that the combination of the
above facility and the cash on hand at the end of the year provides
adequate liquidity headroom for the successful execution of the
Group's operations.
This preliminary announcement was approved by the Board of
Directors on 12 June 2019.
2. Business and geographical segments
Operating 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 the products supplied. In addition to
the operating divisions, a Central division exists to capture all
of the corporate costs incurred in supporting the operations.
Power Cords The sale and manufacture of electrical power products
to manufacturers of electrical / electronic devices
and appliances. These include laptop / desktop computers,
printers, televisions, power tools, vacuum clears and
electric vehicles.
---------------- ----------------------------------------------------------
Cable Assemblies The sale and manufacture of cables permitting the transfer
of electronic, radio-frequency and optical data. These
cables can range from simple USB cables to complex
high speed cable assemblies. Data cables are used in
numerous devices including medical equipment, data
centres, telecoms networks and the automotive industry.
---------------- ----------------------------------------------------------
Central Corporate costs 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 Board believes that the segmentation of the Group based upon
product characteristics allows it to best understand the Group's
performance and profitability. The Group considers the executive
members of the Company's Board and the Chief Operating Officer to
be the chief operating decision-makers.
Following a change in reporting lines and in an attempt to
improve the transparency and accountability of each site, a number
of sites which had been classified as "hybrid" and had their
revenues and costs allocated across the reporting divisions have
now been reclassified to either the Power Cords or the Cable
Assemblies division. As a result, the prior year segmental
reporting has been restated so that it is presented on a comparable
basis to the current year.
52 weeks to
52 weeks to 1 April 2018
31 March 2019 (Restated)
Revenue Profit/(loss) Revenue Profit/(loss)
$'000 $'000 $'000 $'000
-------------------------------------- ------- ------------- ------- -------------
Power Cords 198,885 13,229 203,569 12,112
Cable Assemblies 173,219 13,473 118,808 3,522
Unallocated central costs - (5,096) - (4,177)
-------------------------------------- ------- ------------- ------- -------------
Divisional results before share-based
payments and adjusting items 372,104 21,606 322,377 11,457
Adjusting operating items (6,226) (1,552)
Share-based payment charge (2,388) (1,132)
-------------------------------------- ------- ------------- ------- -------------
Operating profit 12,992 8,773
Share of net loss from associates (210) (192)
Finance income 129 20
Finance costs (1,276) (1,606)
-------------------------------------- ------- ------------- ------- -------------
Profit before taxation 11,635 6,995
Taxation (2,429) (3,070)
-------------------------------------- ------- ------------- ------- -------------
Profit after taxation 9,206 3,925
-------------------------------------- ------- ------------- ------- -------------
Charges for share-based payments and adjusting items have not
been allocated to divisions as management report and analyse
division profitability at the level shown above. The accounting
policies of the reportable segments are in accordance with the
Group's accounting policies.
Geographical segments
The Group's revenue from external customers and information
about its non-current assets (excluding deferred tax assets) by
geographical location are provided below:
Revenue Non-Current Assets
2019 2018 2019 2018
$'000 $'000 $'000 $'000
----------------------- ------------- ------------- -------------- --------------
Asia (excluding India) 164,343 175,266 16,618 16,525
North America 119,623 90,421 2,067 1,088
Europe 85,883 51,959 33,083 3,899
India 2,255 4,731 2 811
South America - - - -
372,104 322,377 51,770 22,323
----------------------- ------------- ------------- -------------- --------------
3. Adjusting items and share-based payments
2019 2018
$'000 $'000
----------------------------------------- ---------------- -------------------
Amortisation of acquired intangibles 1,983 -
Restructuring costs 1,942 860
Acquisition costs 1,821 135
Pension past service costs 480 -
Transition to AIM - 513
Impairment of Goodwill - 74
Movement in onerous lease provision - (30)
Total adjusting operating items 6,226 1,552
----------------------------------------- ---------------- -------------------
Adjusting items tax expense (see note 4) (221) 1,551
----------------------------------------- ---------------- -------------------
Total adjusting items 6,005 3,103
----------------------------------------- ---------------- -------------------
Share-based payments 2,388 1,132
----------------------------------------- ---------------- -------------------
Adjusting items and share-based payments 8,393 4,235
----------------------------------------- ---------------- -------------------
Adjusting items replace the previously disclosed non-recurring
items. The new description expands on the previous disclosure to
not only include costs that are one-off in nature and significant
(such as restructuring costs, impairment charges or acquisition
related costs) but to also include the non-cash amortisation of
intangible assets.
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.
During the current year, the Group has incurred $1,942,000
(2018: $860,000) of restructuring costs. Following a further
decline in revenue with the Power Cords division's largest
customer, further restructuring costs of $1,459,000 were incurred
at our Shenzhen factory, primarily in relation to severance costs.
In addition, during the period, the decision was taken to close the
Indian factory. As part of this closure, the Group has incurred
$478,000 of closure costs, principally in relation to severance
fees, retention bonuses paid to several key staff (in order that
they remain and work on an orderly closure of the factory) and the
write off of assets no longer deemed recoverable. Following a
review of the organisational structure, a number of senior roles
were made redundant resulting in an expense of $270,000.
Off-setting these charges was a $265,000 credit resulting from the
release of a provision made several years ago for minimum order
quantity commitments that have now become time barred.
In the prior year, the Group incurred $860,000 of restructuring
spend following the downsizing of an Asian factory, the downsizing
of the European and South Korean sales team and the restructuring
of the Singapore regional head office.
Acquisition related costs of $1,821,000 (2018: $135,000) are
split between $1,171,000 for Silcotec Europe Limited, $460,000 for
MC Electronics LLC and $190,000 for GTK (Holdco) Limited. These
costs cover legal fees associated with the transactions and
post-acquisition remuneration charges linked to the retention of
key staff.
Associated with the acquisitions, the Group has recognised
certain intangible assets including customer relationships and
customer order backlogs. The amortisation of these intangibles is
non-cash and totals $1,983,000 for the period, split $980,000 for
Silcotec Europe Limited, $251,000 for MC Electronics LLC and
$752,000 for GTK (Holdco) Limited.
During the year the Group recognised a one-off pension past
service cost of $480,000 as a result of Guaranteed Minimum Pension
(GMP) equalisation. This is a past service cost that pension
schemes that had "contracted out" of the State Earnings Related
Pension Scheme must now recognise following the Lloyds Banking
Group judgement in October 2018. This judgement requires the
equalisation of male and female members' benefits for the effect of
unequal GMPs.
4. Taxation
2019 2018
--------------------------- ------------------------------ ------------------------------
Before Before
adjusting Adjusting adjusting Adjusting
items items Total items items Total
$'000 $'000 $'000 $'000 $'000 $'000
--------------------------- ---------- --------- ------- ---------- --------- -------
Current tax - expense
for the period (4,241) (74) (4,315) (441) 255 (186)
Current tax - adjustment
in respect of previous
periods 709 - 709 (236) - (236)
Current tax - impact
of $965 on deferred
foreign income 108 - 108 - (1,349) (1,349)
--------------------------- ---------- --------- ------- ---------- --------- -------
Total current tax (3,424) (74) (3,498) (677) (1,094) (1,771)
Deferred tax - origination
and reversal of temporary
differences 1,211 295 1,506 (842) (457) (1,299)
Deferred tax - adjustment
in respect of previous
periods (437) - (437) - - -
--------------------------- ---------- --------- ------- ---------- --------- -------
Total deferred tax 774 295 1,069 (842) (457) (1,299)
--------------------------- ---------- --------- ------- ---------- --------- -------
Income tax expense (2,650) 221 (2,429) (1,519) (1,551) (3,070)
--------------------------- ---------- --------- ------- ---------- --------- -------
The adjusting items income tax expense of $1,551,000 in 2018
comprised the tax credit arising on the adjusting items of $255,000
offset by the implementation cost of the US Tax Cuts and Jobs Act
2017. This Act reduced the US tax rate from 34% to 21%. As a
result, the deferred tax asset recognised on US tax losses in 2018
reduced by $457,000.
The US Tax Cuts and Jobs Act 2017 imposed a tax liability on US
deferred foreign income under S965 of the internal revenue code. In
accordance with the new tax legislation, in 2018 the Group
recognised a liability of $1,349,000. This liability will be paid
over 8 instalments through to 2025 in accordance with the payment
arrangements set out in the new section. As a consequence,
$1,134,000 (2018: $1,242,000) of this tax liability is recognised
in non-current liabilities.
5. Earnings per ordinary share
The calculations of the earnings per share are based on the
following data:
Earnings 2019 2018
$'000 $'000
-------------------------------------------------- --- --------------------- --------------------
Profit for the purpose of basic and diluted
earnings per share being net profit attributable
to equity holders of the parent 9,206 3,925
Adjustments for:
Adjusting items 6,226 1,552
Share-based payments charge 2,388 1,132
Tax effect of above adjustments and other
adjusting item tax movements (221) 1,551
------------------------------------------------------- --------------------- --------------------
Underlying earnings 17,599 8,160
No. shares No. shares
-------------------------------------------------- --- --------------------- --------------------
Weighted average number of ordinary shares
for the purpose of basic earnings per share 134,382,209 88,956,532
Effect of dilutive potential ordinary shares
/ share options 3,892,712 3,162,104
------------------------------------------------------- --------------------- --------------------
Weighted average number of ordinary shares
for the purpose of diluted earnings per
share 138,274,921 92,118,636
------------------------------------------------------- --------------------- --------------------
2019 2018
Basic earnings per share Cents Cents
-------------------------------------------------- --- --------------------- --------------------
Basic earnings per share 6.9 4.4
Adjustments for:
Adjusting items 4.6 1.7
Share-based payments charge 1.8 1.3
Tax effect of above adjustments and other
adjusting item tax movements (0.2) 1.8
------------------------------------------------------- --------------------- --------------------
Underlying basic earnings per share 13.1 9.2
2019 2018
Diluted earnings per share Cents Cents
------------------------------------------------ ----- -----
Diluted earnings per share 6.7 4.3
Adjustments for:
Adjusting items 4.5 1.7
Share-based payments charge 1.7 1.2
Tax effect of above adjustments and other
adjusting item tax movements (0.2) 1.7
------------------------------------------------- ----- -----
Underlying diluted earnings per share 12.7 8.9
------------------------------------------------- ----- -----
The underlying earnings per share has been calculated on the
basis of profit before adjusting items and share-based payments,
net of tax. The Directors consider that this calculation gives a
better understanding of the Group's performance in the current and
prior period.
6. Bank facilities
During the 52 weeks ended 31 March 2019 the Group utilised a
multi-currency combined revolving overdraft and guarantee facility.
The facility expiry date is 30 June 2019. The amount available
under the facility at 31 March 2019 was $30,000,000 (2018:
$30,000,000). The facility was secured by fixed and floating
charges over the assets of certain Group companies.
The terms of the facility require the Group to perform quarterly
financial covenant calculations with respect to leverage (adjusted
total debt to adjusted rolling 12-month EBITDA) and interest cover
(adjusted rolling 12-month EBITDA to adjusted rolling 12-month
interest). Breach of these covenants could result in cancellation
of the facility.
7. Notes to cash flow statement
2019 2018
$'000 $'000
----------------------------------------------------- -------- -------
Profit for the period 9,206 3,925
Adjustments for:
Finance income (129) (20)
Finance costs 1,276 1,606
Income tax expense 2,429 3,070
Share of net loss from associates 210 192
Depreciation on property, plant and equipment 3,318 3,095
Amortisation of intangible assets 2,451 115
Impairment loss - 74
Loss on disposal of property, plant and equipment 324 89
Share option payment charge 2,388 1,132
Decrease / (increase) in provisions (390) (810)
Effects of foreign exchange rate changes 67 -
Operating cash flow before movement in working
capital 21,150 12,468
Decrease / (increase) in inventories 606 (3,974)
Decrease / (increase) in receivables (10,196) (1,661)
(Decrease) / increase in payables (15,068) 1,508
----------------------------------------------------- -------- -------
Movement in working capital (24,658) (4,127)
Cash generated from / (used in) operations (3,508) 8,341
-------- -------
Cash generated from / (used in) operations
before adjusting items (236) 9,365
Cash utilised by adjusting items (3,272) (1,024)
-------- -------
Taxation paid (2,501) (2,469)
Interest paid (734) (979)
Net cash generated from / (used in) operating
activities (6,743) 4,893
----------------------------------------------------- -------- -------
8. Analysis of net funds
Cash and Bank Debt issue
cash equivalents loans costs Total
$'000 $'000 $'000 $'000
----------------------- ----------------- -------- ---------- -------
At 2 April 2017 29,565 (18,720) 490 11,335
Cash flow (6,070) 7,285 496 1,711
Exchange differences (514) (2,115) 69 (2,560)
Other non-cash changes - - (538) (538)
At 1 April 2018 22,981 (13,550) 517 9,948
Cash flow (1,870) 12,826 - 10,956
Exchange differences (518) 724 (33) 173
Other non-cash changes - - (387) (387)
----------------------- ----------------- -------- ---------- -------
At 31 March 2019 20,593 - 97 20,690
----------------------- ----------------- -------- ---------- -------
Debt issue costs relate to bank facility arrangement fees.
Analysis of cash and cash 2019 2018
equivalents:
$'000 $'000
--------------------------- ---- ---- ------- --------
Cash and bank balances 20,913 24,830
Bank overdrafts (320) (1,849)
--------------------------------------- ------- --------
Cash and cash equivalents 20,593 22,981
--------------------------------------- ------- --------
9. Provisions
Corporate
Property restructuring Other Total
$'000 $'000 $'000 $'000
At 2 April 2017 52 64 326 442
Charge / (credit) in the period (34) - - (34)
Utilisation of provision 1 - (64) (63)
Unwinding of discount - - - -
Exchange differences 1 1 30 32
--------------------------------- --------- --------------- ------- -------
At 1 April 2018 20 65 292 377
Acquired through business
combination 485 - 500 985
Charge / (credit) in the period 52 - 126 178
Utilisation of provision (146) - (7) (153)
Unwinding of discount 76 - - 76
Exchange differences - (2) (22) (24)
--------------------------------- --------- --------------- ------- -------
At 31 March 2019 487 63 889 1,439
--------------------------------- --------- --------------- ------- -------
Less: included in current
liabilities 232 - 889 1,121
Non-current liabilities 255 63 - 318
--------------------------------- --------- --------------- ------- -------
Property provisions
During the prior year, the Group incurred a small number of
costs, received several refunds and released the remaining
provision following the exit of Greenfold Way (the old UK
headquarters and factory based in Leigh). The $20,000 remaining
balance relates to the Group's Asian property portfolio.
During the current year the Group recognised an onerous lease
provision of $485,000 relating to surplus property leased by MC
Electronics LLC. This provision will be released evenly over the
remaining term of the lease.
Other
Other provisions include the Directors' best estimate, based
upon past experience, of the Group's liability under specific
product warranties, purchase commitments and legal claims. The
timing of the cash outflow with respect to these claims is
uncertain.
Included within this provision is a $500,000 liability
associated with a pending legal case which was recognised upon
acquisition of MC Electronics LLC. This liability represents the
Directors' best estimate to settle the claim which had been
identified prior to acquisition. An indemnity in respect of this
matter was obtained from the seller of MC Electronics LLC as part
of the sale and purchase agreement.
10. Reconciliation of operating profit to underlying EBITDA
(earnings before interest, tax, depreciation, amortisation,
adjusting items and share-based payment charge)
2019 2018
$'000 $'000
---------------------------------------------- ------ ------
Operating profit 12,992 8,773
Add back:
Adjusting items 6,226 1,552
Share-based payment charge 2,388 1,132
---------------------------------------------- ------ ------
Underlying operating profit 21,606 11,457
Depreciation of property, plant and equipment 3,318 3,095
Amortisation of acquired intangible assets 468 115
---------------------------------------------- ------ ------
Underlying EBITDA 25,392 14,667
---------------------------------------------- ------ ------
11. Share Capital
Par Share
Value Premium Total
Group Number of Shares $'000 $'000 $'000
---------------------------------------- ----------------- ------- --------- --------
At 2 April 2017 and 1 April 2018 90,251,892 39,755 7,122 46,877
Acquisition of MC Electronics LLC 3,000,000 1,052 2,126 3,178
Placing 48,000,000 15,980 31,944 47,924
Acquisition of Silcotec Europe Limited 3,521,437 1,173 1,626 2,799
Issue of deferred bonus shares 470,588 151 - 151
Acquisition of GTK (Holdco) Limited 2,124,016 681 1,714 2,395
---------------------------------------- ----------------- ------- --------- --------
At 31 March 2019 147,367,933 58,792 44,532 103,324
---------------------------------------- ----------------- ------- --------- --------
On 30 April 2018, the Group issued 3,000,000 shares as part of
the acquisition of MC Electronics LLC.
On 5 June 2018, the Group issued 48,000,000 ordinary shares at a
price of 75 pence per share.
On 8 June 2018, the Group issued 3,521,437 shares as part of the
acquisition of Silcotec Europe Limited.
On 7 September 2018, the Group issued 470,588 shares under the
2017 deferred share bonus plan.
On 10 December 2018, the Group issued 2,124,016 ordinary shares
as part of the acquisition of GTK (Holdco) Limited.
12. Own shares and non-distributable reserves
2019 2018
Own shares $'000 $'000
-------------------------------- ------- -------
At the beginning of the period 867 867
Sale of shares (75) -
Purchase of shares 1,098 -
-------------------------------- ------- -------
At end of the period 1,890 867
-------------------------------- ------- -------
The own shares reserve represents both the cost of shares in the
Company purchased in the market and the nominal share capital of
shares in the Company issued to the Volex Group plc Employee Share
Trust to satisfy future share option exercises under the Group's
share option schemes.
The number of Ordinary shares held by the Volex Group plc
Employee Share Trust at 31 March 2019 was 2,159,277 (2018:
1,295,360). The market value of the shares as at 31 March 2019 was
$2,614,000 (2018: $1,160,000).
Unless and until the Company notifies a trustee of the Volex
Group plc Employee Share Trust, in respect to shares held in the
trust in which a beneficial interest has not vested, rights to
dividends in respect to the shares held in the trust are
waived.
During the year 136,083 (2018: nil) shares were utilised on the
exercise of share awards. During the year the Company purchased
1,000,000 shares (2018: nil) at a cost of $1,098,000.
In December 2013, the Volex Group plc Employee Share Trust sold
3,378,582 shares at GBP1.16 per share to the open market. The
average price of shares held by the Trust at the time was GBP0.70
with a number of the shares having been issued by Volex plc to the
Trust at nominal value. In accordance with the Accounting
Standards, the difference between the sales price of GBP1.16 and
the average share price of GBP0.70 was recorded as a
non-distributable reserve, giving rise to the $2,455,000
non-distributable reserve balance.
13. Business Combinations
In the first 12 months following acquisition, fair value
adjustments are provisional and will be finalised within 12 months
of the acquisition date. Any resulting changes in the fair values
will have an impact on the acquisition accounting and will result
in a reallocation between the assets and goodwill and a possible
adjustment to the amortisation charge shown in the income
statement. None of the goodwill recognised is expected to be
deductible for income tax purposes.
MC Electronics LLC
On 30 April the Group acquired 100% of the units of MC
Electronics LLC, a North-American based manufacturer of customised
complex medical and industrial cables, wire harnesses and
electro-mechanical assemblies for medical and industrial
applications. The acquisition expands the Group's presence in the
Cable Assemblies market and brings new customer relationships to
Volex as well as providing an opportunity to integrate the Group's
North American operations to improve profitability and
competitiveness.
The purchase has been accounted for as a business combination.
Details of the purchase consideration, the net assets acquired and
goodwill are as follows:
Fair value of consideration transferred $'000
----------------------------------------- ------
Cash paid 435
Ordinary shares issued 3,178
Contingent consideration 416
------
Total purchase consideration 4,029
------
The fair value of the 3,000,000 shares issued as part of the
consideration was based on the published closing share price on the
last trading date preceding the share issue of GBP0.753.
The contingent consideration is dependent upon certain revenue
targets being met post-acquisition, the outcome of a specific legal
case and the recovery of certain historic tax overpayments.
Depending upon variables mentioned up to 500,000 shares in Volex
plc may be issued in addition.
The fair value amounts recognised in respect of the identifiable
assets acquired and liabilities assumed are set out in the table
below:
Fair Value
$'000
-------------------------------- -----------
Identifiable intangible assets 500
Property, plant and equipment 448
Deferred taxes 385
Inventories 3,154
Trade receivables 1,959
Trade payables (2,372)
Other debtors and creditors 119
Cash & overdrafts (134)
Provisions (983)
Total identifiable assets 3,076
-------------------------------- -----------
Goodwill 953
-------------------------------- -----------
Net assets acquired 4,029
-------------------------------- -----------
An exercise has been conducted to assess the fair value of
assets and liabilities assumed. This exercise identified a
$1,388,000 write down on inventory for non-moving stock and a
$485,000 onerous lease provision adjustment to the initial book
value. The intangible assets acquired as part of the acquisition
relate to customer relationships and order backlogs. The fair value
of trade receivables above is net of a $39,000 provision.
The goodwill balance recognised above represents certain
intangible assets that cannot be separately identifiable and
measured due to their nature. This includes control over the
acquired business, the skills and experience of the assembled
workforce and the anticipated synergies arising on integration.
None of the goodwill recognised is expected to be deductible for
income tax purposes.
In FY2019, MC Electronics contributed $17,381,000 to Group
revenue and $1,343,000 to adjusted operating profit. Associated
acquisition costs of $460,000 and intangible asset amortisation of
$251,000 have both been expensed as adjusting items in the period.
If MC Electronics had been acquired at the beginning of the year,
it would have contributed estimated revenue of $19,200,000 and
estimated operating profit of $1,530,000 to the results of the
Group.
Silcotec Europe Limited
On 8 June 2018 the Group completed the acquisition of the trade
and assets of Silcotec Europe Limited ('Silcotec Europe'), a
manufacturer and seller of cable harnesses and electronic
sub-assemblies for the medical, telecommunications and computer
industries. Silcotec Europe comprises a sales office in Ireland and
a factory in Slovakia. The acquisition expands further the Group's
Cable Assemblies activities in Europe and is consistent with the
strategy of consolidating the highly fragmented cable assembly
industry to generate synergies in group-wide procurement, sales and
operations. The acquisition brings new medical and scientific
customers to Volex.
The purchase has been accounted for as a business combination.
Details of the purchase consideration, the net assets acquired and
goodwill are as follows:
Fair value of consideration transferred $'000
----------------------------------------- -------
Cash paid 8,990
Ordinary shares issued 4,038
Contingent consideration 1,165
-------
Total purchase consideration 14,193
-------
The fair value of the 3,521,437 shares issued as part of the
consideration was based on the published closing share price on the
last trading date preceding the share issue of GBP0.861.
The contingent consideration was dependent upon certain revenue
targets being met post-acquisition and was paid subsequent to the
year end.
The fair value amounts recognised in respect of the identifiable
assets acquired and liabilities assumed are set out in the table
below:
Fair value
$'000
-------------------------------- -----------
Identifiable intangible assets 7,132
Property, plant and equipment 3,585
Inventories 4,701
Trade payables (1,599)
Other debtors and creditors (758)
Cash 161
Deferred taxes (993)
Loans (2,332)
Total identifiable assets 9,897
-------------------------------- -----------
Goodwill 4,296
-------------------------------- -----------
Net assets acquired 14,193
-------------------------------- -----------
An exercise has been conducted to assess the fair value of
assets and liabilities assumed. This exercise identified a $700,000
increase to the book value of the Slovakian factory (land and
freehold held by Silcotec Europe) with the valuation provided by an
independent surveyor. The intangible assets acquired as part of the
acquisition relate to customer relationships. The Silcotec Europe
business was acquired without any trade receivables. The cash
collection of invoices raised prior to the acquisition date was
left with the seller, with Volex responsible only for cash
collection on sales post-acquisition.
The goodwill balance above represents certain intangible assets
that cannot be separately identifiable and measured due to their
nature. This includes control over the acquired business, the
skills and experience of the assembled workforce and the
anticipated synergies arising on integration. None of the goodwill
recognised is expected to be deductible for income tax
purposes.
Immediately after the acquisition, the Group funded Silcotec
Europe with $2,332,000 in order that it could pay off its external
loan. This funding has been recorded as an intercompany balance
between Volex plc and Silcotec Europe and therefore has been
excluded from the consideration paid.
In FY2019, Silcotec Europe contributed $20,401,000 to Group
revenue and $3,493,000 to adjusted operating profit. Associated
acquisition costs of $1,171,000 and intangible asset amortisation
of $980,000 have both been expensed as adjusting items in the
period. If Silcotec Europe had been acquired at the beginning of
the year, it would have contributed estimated revenue of
$24,870,000 and estimated operating profit of $4,426,000 to the
results of the Group.
GTK (Holdco) Limited
On 10 December 2018 Volex Plc completed the acquisition of 100%
of the share capital of GTK (Holdco) Limited ('GTK'), a global
provider of electronics solutions including cable assemblies,
connectors, displays and manufacturing solutions. GTK is
headquartered in Basingstoke and has operations in the UK, Romania
and Taiwan The acquisition expands the Group presence in the cable
assembly market and brings more than 300 active customers across
Northern European markets.
The purchase has been accounted for as a business combination.
Details of the purchase consideration, the net assets acquired and
goodwill are as follows:
Fair value of consideration transferred $'000
----------------------------------------- -------
Cash paid 16,101
Ordinary shares issued 2,395
Total purchase consideration 18,496
-------
The fair value of the 2,124,016 shares issued as part of the
consideration was based on the published closing share price on the
last trading date preceding the share issue of GBP0.88.
The provisional fair value amounts recognised in respect of the
identifiable assets acquired and liabilities assumed are set out in
the table below:
Provisional
Fair value
$'000
-------------------------------- ------------
Identifiable intangible assets 5,446
Property, plant and equipment 315
Inventories 2,469
Trade receivables 3,948
Trade payables (3,695)
Other debtors and creditors (552)
Cash 1,656
Deferred taxes (941)
Total identifiable assets 8,646
-------------------------------- ------------
Goodwill 9,850
-------------------------------- ------------
Net assets acquired 18,496
-------------------------------- ------------
An exercise has been conducted to assess the provisional fair
value of assets and liabilities assumed. The intangible assets
acquired as part of the acquisition relate to customer
relationships. The fair value of trade receivables above is net of
a $94,000 provision.
In FY2019, GTK contributed $6,998,000 to Group revenue and
$1,066,000 to adjusted operating profit. Associated acquisition
costs of $190,000 and intangible asset amortisation of $752,000
have both been expensed as adjusting items in the period. If GTK
had been acquired at the beginning of the year, it would have
contributed estimated revenue of $23,042,000 and estimated
operating profit of $2,722,000 to the results of the Group.
Net cash outflow on acquisitions $'000
-------------------------------------------------- -------
Cash consideration
- MC Electronics 435
- Silcotec Europe 8,990
- GTK 16,101
Total cash consideration 25,526
Less: cash and cash equivalent balances acquired
- MC Electronics (134)
- Silcotec Europe 161
- GTK 1,656
-------------------------------------------------- -------
Net outflow of cash - investing activities 23,843
-------------------------------------------------- -------
14. Events after balance sheet date
There are no disclosable events after the balance sheet
date.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR LFFVFRSIFLIA
(END) Dow Jones Newswires
June 13, 2019 02:01 ET (06:01 GMT)
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