Volex's revenue and profit on the rise following cable acquisitions
Volex reported growth in revenue and profit after a six-month period in which the power cord and cable assembly maker completed two acquisitions.
Revenue improved by 13% over the half-year ended 30 September, reaching $182.4m, while statutory profit before tax jumped 16.7% to $4.9m and underlying PBT pretty much doubled to $9m.
Cash and cash equivalents stood at $24.6m at 30 September, up from $22.5m at the same point last year.
The AIM-traded company acquired both MC Electronics and Silcotec Europe during the period as part of its strategy to grow its cable assemblies division organically and through targeted acquisitions.
Both acquisitions are trading in line with plan, the company said, having to date contributed $15.3m to group revenue and $1.8m to underlying operating profit, with further integration expected for the second half of the year.
Nat Rothschild, executive chairman of Volex, said: “The acquisitions have not detracted from the performance of the 'traditional' Volex business where we continue to drive efficiency, process and supply chain improvements across our facilities through a renewed commitment to lean manufacturing.”
Moving forward, Volex said uncertainty had been sowed due to US tariffs placed on China, though believes that it will work to the company’s advantage as few competitors have an international factory footprint.
The outfit also plans to reduce production costs through a focus on automation and product standardisation, a process which has already begun with the August introduction of two automated production lines for EU and US power cord production.
“Going forward, we are seeing the cost price pressure ease with the copper price dropping back and the US dollar strengthening against our key manufacturing currencies. With a continuing strong sales pipeline, the board is optimistic about the future outlook and expects full year trading performance slightly ahead of market expectations,” said Rothschild.
Volex’s shares were up 3.41% at 88.00p at 0853 GMT.