Volex sees ongoing improved customer demand

Power products and integrated manufacturing company Volex said on Thursday that the levels of customer demand it experienced in the second half of the 2021 financial year had continued into the first quarter of 2022.

The AIM-traded firm, which was holding its annual general meeting, said performance in consumer electricals remained “very strong”, with electric vehicle revenue continuing to grow, which the board said reflected its “leading position” in the sector.

Its medical and complex industrial technology customers were also experiencing a “healthy recovery” in areas where there had been reduced demand in 2021, due to challenges imposed by the pandemic.

DE-KA, the leading European domestic appliance power cord supplier, which was acquired in February, had continued to trade well.

“Against this continued, robust performance, we remain mindful of the potential impact on trading caused by supply chain shortages, material cost inflation and freight challenges, as well as the ongoing operational issues posed by the Covid-19 pandemic,” the board said in its statement.

“We successfully passed through the copper price inflation experienced earlier in the year and our global supply chain and customer service teams remain focused on ensuring that we continue to meet our customers' expectations.”

Volex said cash flow in the first quarter had been “robust” which, combined with its balance sheet strength, provided the company with the financial flexibility to advance further opportunities from its acquisition pipeline.

“Overall, whilst still early in the year, the positive trends in the first quarter lead the board to expect to deliver full-year underlying operating profit slightly ahead of current market expectations.”

At 1610 BST, shares in Volex were up 4.82% at 356.4p.