Ionix back in black after buy-out

A duo given an £850,000 incentive to take the lossmaking Leigh-based wiring harness business off the hands of Volex Group are to share a £3m dividend after turning the business around within a year of buying it.

The windfall for Ionix Systems’ chief executive Bill Taylor is revealed in the company’s inaugural accounts, which show that the company made a pre-tax profit of £7.5m on sales of £21.2m in its first year of trading to the end of March.

Although some of the profit can be attributed to a one-off goodwill payment, Taylor told TheBusinessDesk.com that the company had enjoyed “a great first year”.

“We’re ahead of where we thought we’d be,” said Taylor.

He said that the company’s immediate priority after becoming a standalone firm was to embark on a major restructuring to reduce its overheads. A third of all staff at its three factories in the UK, Croatia and in Estonia lost their jobs as headcount was reduced from more than 750 to around 520.

“It gave us the size of business we needed to give us sustainability going forwards,” said Taylor.

He said that in its last year under Volex’s ownership, the division had lost £4m and its cost base was unsustainable,

“It is painful making redundancies but the company couldn’t continue to afford to carry on losing £4m each year.”

Turnover also dropped, particularly in the construction sector where the firm makes wiring for site vehicles. However, he said that since the year end orders to construction clients had improved.

Taylor added that he expects the business to grow this year, both organically and through acquisitions.

The company has just opened an office in Germany which will be run by Heiner Rosenhofer,who is the former CEO of a Swiss competitor firm.

It also took on Adrain Gare, a corporate financier who had previously worked for Baker Tilly’s Manchester office, as a non-executive director to hunt for acquisition targets.

Taylor said the firm was in the flatter stages of negotiations with three competitor firms.

“We hope to complete the deal within six to nine weeks, although these things always seem to take longer than you expect.”

He added that contracts picked up as a result of Ionix’s purchase of the customer book of failed competitor Excel (Electronic Assemblies) was helping to build income.

Ionix finished the year with net assets of £4.5m and with cash of almost £2.4m.