Volex sees full-year sales rise despite Q4 slip

Electrical, digital and optical connections provider Volex has reported 'resilient' trading in the final quarter despite continuing economic uncertainty.

Consumer revenue was in line with the previous year, while year-on-year revenue growth in the Healthcare sector was over 20%. Telecoms/Datacoms revenue in the quarter continued to be affected by reduced spend by telecoms operators while trading in the Industrial sector, as predicted, largely recovered from the customer destocking experienced in the third quarter.

Consequently, overall fourth quarter group revenue was down slightly on the same period last year, but still up almost 6% for the year as a whole.

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However, exceptional start-up costs have been winding down meaning costs for the full year are at the lower end of the $5-6m range previously announced.

Excluding start-up costs, normalised gross margin in the fourth quarter was "modestly" above management's stated objective of exiting the year at around 20%. As a result, full year normalised operating profit will be slightly ahead of market expectations for the year ended April 1st.

In a statement the firm said: "Whilst economic conditions are expected to continue to be challenging in FY2013, the board is confident that on-going investments, particularly in the areas of sales, operations and technology, will enable the business to deliver continued growth in revenues, margins and profit in line with management's expectations.

"Despite significantly increased investment in capital expenditures and other areas of the business, cash generation continues to be strong with a net cash position again reported at the year end, ahead of market expectations."

The share price rose 3.53% to 264p by 14:03.

NR