13th Nov 2014 10:24
LONDON (Alliance News) - Volex PLC Thursday expressed confidence in further growth in sales and profitability as benefits from its 'Volex Transformation Plan' start to show, despite posting a widened pretax loss in its first half.
The power and data cabling company posted a pretax loss of USD5.8 million in the half year to October 5, widened from a USD4.1 million loss a year before, as a rise in revenue to USD220.9 million from USD196.5 million was offset by USD7.6 million in exceptional costs.
The company posted a USD5.8 million impairment of product development costs following a review of its product portfolio, as it opted to allocate elsewhere resources from two projects, Active Optical Cables and Internal Power Adaptors. A further USD2.0 million was incurred in restructuring costs, although this was reduced from USD5.8 million in the previous year.
It saw an exceptional USD500,000 credit from the lapse of two share option issues following their failure to meet targets.
Stripping out exceptional costs and share-based payment credit, the company posted an underlying pretax profit of USD1.8 million, up from USD100,000 a year before.
Volex attributed its improved revenue performance to the 'Volex Transformation Plan'. In its power division, revenue rose 15%, driven by its existing customer base and new business wins. In the data division, revenue was up 8.0%, boosted by one-off projects including a project with Cielo SA in the run up to the FIFA World Cup.
Volex said it was on track to be cash flow neutral in the current year.
"We have made important investments in people and infrastructure and continue to remain focused on delivering the procurement benefits within our plan that are expected to feature more strongly in the second half and beyond," said Chairman Karen Slatford in a statement.
"With the group's well invested, global manufacturing footprint, high-quality customer base and our commitment to continuous improvement, the board has confidence that the company will deliver further sustainable growth in both sales and profitability," Slatford added.
Shares in Volex are trading down 15% at 64.00 pence Thursday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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