Volex upbeat as it ends first half in line

The AIM-traded firm said it had traded in line with expectations, with full-year sales expected to show a modest return to growth, reversing a trend of a sales decline seen over the previous three years.

Excluding sales to its largest power customer, full year sales were expected to grow 5%.

The board said it managed to execute a successful diversification in revenue during the year, with the top three customers now accounting for 38% of sales, as compared with 47% of sales three years ago.

Net cash at year-end stood at $9.9m - an increase from the $5.8m reported at the half year.

Additionally, the Volex board announced on Wednesday that John Molloy, current chief executive officer of the Volex power division, had been appointed as chief operating officer of Volex, with profit and loss responsibility for all of its manufacturing sites.

He would work alongside CFO Daren Morris, who would continue to be responsible for all group commercial, legal, finance and administrative functions.

“As announced at the time of the first half results in November 2017, competition continued to be intense in the second half and cost inflation has continued across both our raw material and labour cost lines,” said executive chairman Nat Rothschild.

“However, our sales pipeline, developed over the past year, has started to convert into new revenues for the group, and we expect to deliver a robust trading performance for the full year in line with the board's expectations.

“We continue to review value accretive acquisitions in order to diversify our customer base, and expect to make further progress in this regard in the coming months.”