26th Jun 2024 10:41
(Alliance News) - Volex PLC on Wednesday reported double-digit growth in annual revenue and profit despite temporary headwinds caused by customer destocking.
In the financial year to March 31, the Basingstoke, England-based company reported pretax profit of USD51.6 million, up 13% from USD45.8 million a year prior. Revenue climbed 26% to USD912.8 million from USD722.8 million.
Volex, which is a specialist integrated manufacturer of critical power and data transmission products, said sales were driven by strong organic growth of 6.9%, in spite of temporary headwinds caused by customer destocking.
The underlying operating margin increased by 50 basis points to 9.8% from 9.3%, comfortably within the target range of 9% to 10%.
Despite the overall sales increase, there were differing fortunes across the business.
In Electric Vehicles, short-term customer destocking and prior year customer inventory building resulted in organic revenue reduction of 9.6%.
Sales also fell in Consumer Electricals, down 7.6%, resulting from supply chain normalisation in North America and Asian markets.
But the Medical unit saw organic sales jump 15% as improved component availability enabled customers to begin to address substantial backlogs.
It was also a brighter picture in the Complex Industrial Technology arm where organic revenue grew 32% driven by expansion in data centre products.
Executive Chair Nat Rothschild was optimistic.
"Our acquisition pipeline remains promising, alongside incremental organic initiatives, underscoring our commitment to achieving our strategic goals. Having started the new fiscal year with strong customer demand, we are confident of making further progress in [financial 2025] and we are firmly on track to achieve our five-year revenue target of USD1.2 billion by the end of [financial 2027]," he said.
Volex proposed a final dividend of 2.8p per share, up from 2.6p a year ago, making a total payout of 4.2p, up 7.7% from 3.9p.
Shares in Volex fell 6.6% to 330.50 pence in London on Tuesday morning.
By Jeremy Cutler, Alliance News reporter
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