12th Nov 2015 09:29
LONDON (Alliance News) - Power and data cabling provider Volex PLC on Thursday said it made its first pretax profit since the first half of 2013 thanks to restructuring costs falling and despite revenue declining.
Volex said it made a pretax profit of USD3.0 million in the 26 weeks to October 4, compared to a USD5.8 million loss a year earlier. In its 2015 financial year, the group booked USD7.6 million in one-off restructuring costs, but that fell to only USD329,000 in the first half of financial 2016, its current year. Stripping out the one-offs, underlying pretax profit rose to USD3.3 million from USD1.8 million.
Revenue, however, declined to USD189.4 million from USD220.9 million a year earlier, reflecting the market pressures faced in both of the company's operating divisions. The revenue decline was mitigated, though, by Volex maintaining a 16.7% gross margin through cost cutting.
"Trading conditions in the first half of the financial year have been tough. Demand from the core personal computer, tablet and printer markets has slowed and key customer new product launches have been deferred into the second half. Despite this, the group has returned to profitability. This has been achieved through tight cost control with further savings identified," said Karen Slatford, Volex's chairman.
"We expect our markets to remain highly competitive in the near term. We will continue to monitor costs to ensure they are aligned with revenue performance," Slatford added.
Shares in Volex were up 4.7% to 56.30 pence on Thursday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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