TIDMVLX
RNS Number : 0290R
Volex PLC
24 October 2023
Volex plc
("Volex" or the "Group")
Update on H1 Trading and Cyber Incident
Volex (AIM: VLX), the specialist integrated manufacturer of
critical power and data transmission products, today issues an
update on trading for the 26 weeks ending 1 October 2023 (the
"Period" or "H1") and the cyber security incident announced on 9
October 2023.
Trading update
The Group continues to maintain strong financial momentum and is
well positioned to achieve full-year results in line with market
expectations(1,2) .
Revenues for the first half of the year were 4% higher than last
year on an organic, constant currency basis, against a strong
comparative period.
The Group continues to benefit from its diversification
strategy, now operating in five market sectors and with a broader
product offering to provide bespoke solutions to customers. This
approach creates a high degree of resilience and flexibility during
a period where demand has not been uniform across the Group's
market sectors. The easing of pressure in supply chains and higher
interest rates have caused some Electric Vehicles and Consumer
Electricals customers to closely manage inventory levels. This has
been more than offset by strong demand in Medical and Complex
Industrial Technology supported by better availability of key
components. There is evidence of de-stocking slowing in some
channels, as order patterns are starting to normalise, particularly
in Electric Vehicles.
The $195 million acquisition of Murat Ticaret completed during
the first half of the year. Integration activities are well
underway and initial customer engagement has been very encouraging.
There is a strong focus on delivering incremental customer
projects, and the Board also believes there will be opportunities
to realise cross-sales opportunities for the wider Group. Murat
Ticaret will contribute seven months trading in the current
financial year, whilst structurally improving Group operating
margins.
Following the acquisition, the Group's covenant leverage was 1.3
times(3) . With a strong balance sheet, Volex continues to make
targeted investments to position the business for sustainable
long-term growth in markets with attractive structural
characteristics.
Cyber incident
On 9 October 2023, the Group announced that it was the subject
of a cyber incident resulting in unauthorised access to certain IT
systems and data at some of the Group's international sites.
The Group confirms that all of its manufacturing sites are
operational, and now delivering full production output. The
effective deployment of the Group's business continuity strategy
minimised customer disruption and there is not expected to be any
material adverse impact to revenue or underlying operating profit
as a result of the incident. Costs for the recovery and remediation
of systems are anticipated to be approximately $2 million, which
will be reported as an exceptional item in the second half of the
year.
Current trading and outlook
Volex delivered a robust performance during the first half of
the year, despite the challenging backdrop, whilst executing its
most significant acquisition to date. The Board remains optimistic
of a number of potential near-term sales opportunities to make
further progress in the second half of the year, and remains on
track to deliver full-year results in line with market
expectations.
Notice of results
The Group expects to release its interim results on 23 November
2023.
Nat Rothschild, Executive Chairman of Volex, commented:
"Volex has delivered another period of growth, with our strategy
of diversification affording the Group a high degree of resilience
and flexibility, ensuring that we remain on course to deliver on
our full-year expectations. The integration of Murat Ticaret is
progressing to plan, and we continue to identify cross-selling and
incremental revenue opportunities with both existing and potential
customers."
For further information please contact:
Volex plc +44 (0)7971 156 431
Nat Rothschild, Executive Chairman investor.relations@volex.com
Jon Boaden, Chief Financial Officer
Peel Hunt LLP - Nominated Adviser & Joint
Broker
Ed Allsopp
Tom Ballard
Ben Harrington +44 (0)20 7418 8900
HSBC Bank plc - Joint Broker
Simon Alexander
Joe Weaving +44 (0)20 7991 8888
Powerscourt - Media Enquiries
James White
Nicholas Johnson +44 (0)20 7250 1446
Notes:
1. 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.
2. The Company has compiled forecasts from four analysts with
current market forecasts for the 52 weeks ending 31 March 2024 for
revenue to be in the range of $849.8 million to $891.0 million,
with a consensus of $864.6 million, and for underlying operating
profit to be in the range of $82.3 million to $87.0 million, with a
consensus of $84.3 million.
3. Covenant leverage represents the ratio of net debt, excluding
operating lease liabilities, to underlying EBITDA excluding the
impact of right of use amortisation arising on operating lease
arrangements, adjusted to include the EBITDA from the last twelve
months of acquisitions on a proforma basis. This measure is aligned
with the covenant calculations used for external debt
facilities.
About Volex
Volex plc (AIM: VLX) is a global leader in integrated
manufacturing for performance-critical applications and a supplier
of power products. We serve a diverse range of markets and
customers, with particular expertise in cable assemblies,
higher-level assemblies, data centre power and connectivity,
electric vehicles, and consumer electricals. We are headquartered
in the UK and operate from 27 manufacturing locations with a global
workforce of over 11,500 people across 24 countries. Our products
are sold through our own locally based sales teams and through
authorised distributor partners to Original Equipment Manufacturers
('OEMs') and Electronic Manufacturing Services ('EMS') companies
worldwide. All of the products and services that we offer are
integral to the increasingly complex digital world in which we
live, providing power and connectivity from the most common
household items to the most complex medical equipment. For more
information, please visit www.volex.com
-ENDS-
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