REG - Volex PLC - Full Year Trading Update

VolexAnnouncement

07/04/2025 07:00

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RNS Number : 8418D  Volex PLC  07 April 2025

 

 

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7 April 2025

 

Volex plc

 

("Volex", the "Company" or the "Group")

Full Year Trading Update

Full year growth and profit ahead of market expectations

Volex (AIM: VLX), the specialist integrated manufacturer of critical power and
data transmission products, today releases a trading update for the financial
year ended 30 March 2025 ("FY2025").

Revenue growth and improved profitability driven by strong Q4 momentum

Following a strong fourth quarter, revenue for FY2025 is now expected to be at
least $1,060 million, representing a year-on-year increase of at least 16%,
and organic constant currency growth of at least 8%. Underlying operating
margins are anticipated to be at the upper end of the target corridor of 9% to
10%, with operating profit of at least $100 million, well ahead of the top end
of market estimates(1).

This robust financial performance highlights Volex's ongoing success in
securing new projects through delivering cost-competitive and technically
advanced manufacturing services.

Improved underlying operating profit margins in the second half were driven by
a favourable product mix, including increased demand for data centre products,
as well as a focus on incremental operational improvements.

Harnessing manufacturing technology to deliver organic growth

The significant organic growth achieved this year reflects the Group's strong
market positions across a diverse range of specialist sectors, where Volex
leverages deep technical expertise to meet complex customer requirements.

Our embedded presence in global technology supply chains continues to generate
exciting opportunities and deliver consistent, high-quality solutions for
customers, while the Group's focus on specialist markets with high customer
lock-in and limited competition means that we are an essential and trusted
partner to the global technology companies we work with.

Electric Vehicles (EV) and Consumer Electricals continued their strong
momentum, securing several new key customer relationships, positioning the
Group well for FY2026.

Complex Industrial Technology experienced notable strength, delivering low
double-digit organic growth, supported by increased data centre product
demand, particularly driven by accelerated infrastructure investments from a
major customer in the last quarter of the year.

Medical sector revenues declined against a prior-year comparative period that
benefitted from one-time customer catch-up orders.

Integration activity continues in the Group's Off-Highway business, delivering
planned productivity improvements and efficiencies. Growth in this segment
normalised during the year, with softer macroeconomic conditions in some
end-markets offset by several strategic customer wins in North America and
Europe, resulting in flat year-on-year organic revenue.

Strategic investment driven by customer demand

The Group continued to invest strategically in capacity expansion, automation,
and vertical integration initiatives during the year, all closely aligned with
servicing ever evolving customer needs. Additional capacity in key locations
positions Volex for site consolidation opportunities in FY2026, supporting
long-term operational efficiencies.

After targeted capex investment to support growth of approximately $45
million, covenant leverage(3) at 30 March 2025 was approximately 1.1x,
consistent with the prior-year.

Embedded customer relationships mitigate trade volatility

The breadth and rapid evolution of recent changes in international trade
policies and market dynamics are unprecedented, making precise quantification
of direct and indirect impacts challenging and increasing operational
complexity.

However, Volex's strategic investments in geographic diversification and
global manufacturing flexibility have created a highly resilient platform that
is well-positioned to support customers navigating these dynamic market
conditions.

Leveraging deep expertise and an agile global footprint, Volex proactively
engages with customers to adapt production locations and mitigate potential
disruptions effectively. Given the evolving tariff landscape, customers are
cautious about making short-term supply chain decisions, further enhancing the
value of Volex's embedded and critical roles supporting their procurement
activities.

The majority of Volex's products represent essential components within complex
supply chains. In many instances, Volex is either the sole provider or one of
very few qualified manufacturers capable of meeting demanding technical and
operational requirements, fostering strong customer reliance. Incremental
costs arising from tariff changes are expected to be passed through to
customers, underscoring the robustness of Volex's competitive positioning.

 

Nat Rothschild, Executive Chairman, said:

"We are delighted with another year of very significant progress at Volex,
delivering a performance that has comfortably exceeded market expectations,
clearly demonstrating the effectiveness of our strategy.

 

"For the first time in Volex's history, revenue and profits have exceeded $1
billion and $100 million respectively. This is a direct result of our
continued investment in advanced manufacturing capabilities, coupled with our
strategic focus on key growth sectors, whilst simultaneously maintaining
strong returns on capital employed.

 

"Although wider market uncertainty has increased in recent days, particularly
around tariffs, Volex's current market valuation fails to adequately reflect
our embedded presence in global technology supply chains, alongside the unique
geographic and end-market diversification that has become such a feature of
the Volex that our team has built in recent years.

 

"I am very confident that these elements mean we are well placed to navigate
prevailing market conditions and continue to deliver on the significant growth
opportunities that lie ahead."

 

 

For further information please contact:

 Volex plc                                             +44 (0) 1256 442570
 Nat Rothschild, Executive Chairman                    investor.relations@volex.com
 Jon Boaden, Chief Financial Officer

 Peel Hunt LLP - Nominated Adviser & Joint Broker      +44 (0) 20 7418 8900
 Ed Allsopp
 Dom Convey
 Tom Graham

 Jefferies - Joint Broker                              +44 (0) 20 7029 8000
 Philip Noblet
 Sam Barnett
 Harry Le May

 Sodali & Co - Media Enquiries                         +44 (0) 20 7250 1446
 James White
 Nicholas Johnson

 

 
 
About Volex plc

Volex plc (AIM:VLX) is a driving force in integrated manufacturing for
mission-critical applications and a global leader in power and data
connectivity solutions. Our diverse operations support international blue-chip
customers in five key sectors: Electric Vehicles, Consumer Electricals,
Medical, Complex Industrial Technology and Off-Highway. Headquartered in the
UK, we orchestrate operations across 27 advanced manufacturing facilities,
uniting 14,000 dynamic individuals from 25 different nations. Our
extraordinary products find their way to market through our localised sales
teams and authorised distributor partners, supporting Original Equipment
Manufacturers and Electronic Manufacturing Services companies across the
globe. In a world that grows more digitally complex by the day, customers
trust us to deliver power and connectivity that drives everything from
household essentials to life-saving medical equipment. Learn more at
www.volex.com.

 

 

Notes

1.  As at 2 April 2025, the average of company compiled analysts' forecasts
for the 52 weeks ending 30 March 2025 for revenue is $1,032.6 million with a
range of $1,027.7million to $1,040.0 million, the average for underlying
operating profit is $96.7 million, with a range of $95.8 million to $97.6
million.

2.  Underlying operating profit is before adjusting items which are one-off
in nature and significant (such as restructuring costs, impairment charges or
acquisition-related costs), the amortisation and impairment of acquired
intangible assets and share-based payment charges. This trading update is
based upon unaudited management accounts information. Forward-looking
statements have been made by the Directors in good faith using information
available up until the date that they approved this statement. Forward-looking
statements should be regarded with caution because of the inherent
uncertainties in economic trends and business risks.

3.  Covenant leverage is net debt (before operating lease liabilities)
divided by underlying EBITDA adjusted for depreciation of right-of-use assets
and pro-rated for acquisitions.

 

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