11th Nov 2016 07:35
LONDON (Alliance News) - Power and data cabling services company Volex PLC on Friday swung to a loss in the first half of its financial year on lower revenue and one-off restructuring charges.
Volex said it made a pretax loss of USD5.6 million in the 26 weeks to October 2, swung from a USD3.0 million profit in the comparable period a year prior. Profit was dragged lower by an impairment charge booked by the group on its power manufacturing assets and by a USD1.1 million charge related to restructuring its business in Brazil.
Underlying pretax profit, stripping out the one-offs, was flat at USD3.3 million in the half.
Revenue declined to USD166.1 million from USD189.4 million, primarily due to a 22% fall in sales to the company's largest customer. This loss of business volume was what triggered the impairment on its power manufacturing assets.
"I am pleased to report that underlying profitability has been maintained at prior year levels reflecting the actions that we have taken to address the continuing decline in revenues from several of our larger customers," said Nat Rothschild, Volex's executive chairman.
"We have an encouraging set of projects in the sales pipeline, however, we anticipate that the benefits arising from these will not be realised for at least another twelve months (the lead time to bring on new accounts). In the meantime, we expect our markets to remain fiercely competitive and we will continue the practice of ensuring our factory footprint and costs are aligned with revenue performance," Rothschild added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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