- Sales seen topping $1 billion
- Profit to beat highest forecast
- Data centre demand strong
A positive full-year trading update from specialist power cable, plug and connector maker Volex (VLX:AIM) lifted the company’s shares slightly on a day when the FTSE 100 and the All-Share were nursing more than 5% losses.
The stock, which suffered a 10% fall on Friday as markets around the world sold off, climbed by as much as 19p or 9.5% to 218p making it one of the few stand-out gainers in Europe.
RESULTS ABOVE FORECASTS
In an update on trading for the year to the end of March, the company said it expected revenue to be at least $1.06 billion, a rise of 16% on the prior year, with at least half of the increase coming from organic sales growth.
Underlying operating margins are seen at the top end of the firm’s 9% to 10% target range, with operating profit of ‘at least $100 million’, ahead of the highest analyst forecast of $97.6 million.
Volex said its strong financial performance highlighted its ‘ongoing success in securing new projects through delivering cost-competitive and technically advanced manufacturing services’.
The improvement in underlying margins was due to a better second-half product mix including increased demand for data centre products ‘as well as a focus on incremental operational improvements’.
Volex’s products are embedded in its customers’ supply chains in specialist markets with ‘high customer lock-in’ and limited competition, with the firm reporting strong momentum in EVs (electric vehicles) and consumer electricals, as well as data centres, where one major customer accelerated their investment in the final three months of the financial year.
