Cabling group bullish after encouraging final results

Volex, the Warrington-based cables group, has announced improved results for the year to April 5, today.

It also said it is well placed in the current pandemic situation and is further developing its acquisitions pipeline.

Revenues for the 53 weeks ended April 5, of $391.345m, compared with $372.104m for the 52 weeks ended March 31, 2019. Pre-tax profits of $15.861 were up from $11.635m the previous year.

A final dividend of 2.0p per ordinary share will be paid.

Executive chairman, Nat Rothschild, said: “Volex’s strategy over the past five years to diversify our customer base and geographic footprint has resulted in a resilient business with a renewed reputation for quality and reliability.

“Fiscal year 2020 has been another transformative year.

“We have strengthened our position, expanded our business, built a strong platform for growth and made two further acquisitions.

“Volex has demonstrated effective management during the COVID-19 pandemic, minimised disruption to our business and continued to supply and support our customers. We are grateful to all our employees for their outstanding efforts.”

He added: “Our strategy to reposition the group over the last five years has improved its resilience and, in particular, our diversified customer base has mitigated the worst effects of COVID-19.

“This, coupled with our early action in China to keep our sites operational, has enabled us to weather the subsequent global spread of the virus.

“Acquisitions are a key element of our overall growth strategy. The combination of a strong balance sheet and low interest rates provides an opportunity to increase scale, customer reach and capability. We are continuing to develop our acquisition pipeline.”

He concluded: “Volex is in a strong position and well placed to withstand any further downturns and maintain our dividend, whilst being able to pursue the opportunities that are presenting themselves and to create value for our shareholders.”

In current trading, unaudited revenue for the four months ended May 2020 was $126.2m, four per cent ahead of the same period a year earlier.

During this period, the business performed ahead of expectations, although it is now seeing areas of weakness primarily in the medical equipment installation sector as hospitals around the world remain closed for non-critical medical procedures.

In the electric vehicle business, after weakness in March and April due to customer factory closures, the group is starting to see a recovery.

The consumer and data centre businesses continue to perform well.

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