Volex PLC Trading Update (7982J)
16 Aprile 2020 - 8:00AM
UK Regulatory
TIDMVLX
RNS Number : 7982J
Volex PLC
16 April 2020
16 April 2020
Volex plc
("Volex" or the "Company")
Trading Update
Volex plc (AIM: VLX), the global provider of complex assemblies
for performance critical applications and power products, issues
the following trading update ahead of the announcement on 18 June
2020 of its full-year results for the year ended 5 April 2020.
-- The Company reiterates current guidance for the financial year ended 5 April 2020;
-- Full-year sales expected to exceed $392 million (FY2018/19:
$372 million). Combined sales for February and March (the period
since the outbreak of the COVID-19 virus) were $68 million
(FY2018/19: $63 million);
-- Net cash as at 5 April 2020 of $31.7 million compares with
$7.9 million reported at the half year. We intend to declare a
final dividend of 2 pence per share based on our full-year
results;
-- Looking ahead, it appears likely that economic activity and
consequently trading will be impacted by restrictive governmental
measures put in place to contain the spread of Covid-19. However,
the quantum and precise impact will depend on the length of time
such measures are in place and their severity, offset against our
defensive exposure to medical devices and data-centre products,
which make up approximately two-thirds of our complex assemblies
division;
-- Our medical sites have been assigned "essential business"
status in the US and Mexico, and our other sites are similarly
deemed essential manufacturing locations by respective governments
in the countries in which they operate. As of 16 April 2020, all
Volex sites are operational.
Nat Rothschild, Executive Chairman of Volex, commented:
" The worldwide COVID-19 pandemic is forcing governments to
implement extreme, restrictive measures in an attempt to curb the
spread of the virus. Our priorities are first and foremost: to
safeguard the health and safety of our employees and our local
communities; where possible to support government actions to slow
the spread of COVID-19; and to assess and mitigate the risks to our
business continuity.
However, despite this 'perfect storm', Volex's business has
proved remarkably resilient, continuing to produce a solid
performance in both sales and operating margins. Our strategy to
diversify our products, customers and geographic footprint,
together with our exposure to medical devices (and high-speed data
centre products, which are in even greater demand as much of the
world's population works from home), has resulted in continued
growth and strong cash generation, despite significant
headwinds.
In order to mitigate any unforeseen financial impact should the
macroeconomic outlook deteriorate further, the group is taking
steps to optimise cash flow. However, we have today announced a
recommended final dividend of 2 pence per share, which reflects our
robust financial position.
We are closely monitoring all available forms of relief from
governments on direct and indirect taxes, social charges, and
employee relief funds, and assessing their relevance to Volex.
Current headroom under our existing facility, combined with our
cash balances, provides the group with circa $60 million of
liquidity and, in line with our strategy, our team continues to
actively look for new opportunities to grow our business and
technical capabilities.
Operationally, 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. While the duration and impact of the
COVID-19 virus remains uncertain, we remain confident that Volex
will continue to progress in the year ahead.
We thank all of our customers, suppliers and employees for their
dedication and commitment at this difficult time."
This announcement, released by Volex plc, contains inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) 596/2014 (MAR), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
For further information please contact :
+44 7909 995
Volex plc 887
Nat Rothschild, Executive Chairman
Daren Morris, Chief Financial Officer and Company
Secretary
N+1 Singer - Nominated Adviser & Joint Broker +44 20 7496 3000
Shaun Dobson
Iqra Amin
+44 20 7659
Whitman Howard - Joint Broker 1234
Hugh Rich
Nick Lovering
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END
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