Volex on track to meet full-year market expectations

24th Oct 2023 10:31

(Sharecast News) - Critical power products manufacturer Volex said on Tuesday that it had continued to maintain "strong financial momentum" and was "well positioned" to achieve full-year results in line with market expectations.

Volex said interim revenues were 4% higher year-on-year on an organic, constant currency basis, against "a strong comparative period".

The AIM-listed group did note that the easing of pressure in supply chains and higher interest rates had caused some electric vehicles and consumer electricals customers to "closely manage inventory levels". However, this was "more than offset" by strong demand in medical and complex industrial technology supported by better availability of key components.

Integration activities related to Volex's $195m acquisition of Murat Ticaret during the first half were already "well underway", with initial customer engagement said to have been "very encouraging". Following the acquisition, the group's covenant leverage was 1.3x.

"Volex delivered a robust performance during the first half of the year, despite the challenging backdrop, whilst executing its most significant acquisition to date. The board remains optimistic of a number of potential near-term sales opportunities to make further progress in the second half of the year, and remains on track to deliver full-year results in line with market expectations," it said.

Following a cyber incident earlier in the month, Volex confirmed that all of its manufacturing sites were operational and now delivering full production output.

The "effective deployment" of its business continuity strategy minimised customer disruption and there was not expected to be any material adverse impact to revenues or underlying operating profits as a result of the incident.

Costs for the recovery and remediation of systems were anticipated to be approximately $2.0m, which will be reported as an exceptional item in the second half of the year.

As of 1030 BST, Volex shares were up 1.25% at 284.50p.

Reporting by Iain Gilbert at Sharecast.com