Trading Update

RNS Number : 4751M

Volex PLC

18 September 2012

 



For immediate release

18 September 2012

VOLEX plc

Trading Update

Volex plc ('Volex' or together with its subsidiaries, the 'Group'), the global provider of electrical, digital and optical connections, today provides the following trading update.

In light of a recent unexpected change in forecast demand from the Company's largest customer in its Consumer sector and the continuing adverse macro-economic conditions, the Company now anticipates that revenue and profit for the year ending 31^st March 2013 will fall short of Management's prior expectations. Whilst total Group revenues for the full year are anticipated to show year-on-year growth of approximately 5%, the lower than expected Consumer revenue and resulting loss of operational leverage will impact the reported operating profit, which Management now expects to be broadly in line with that of FY2012.

These lower growth expectations are driven primarily by a delay in product launches and a change in product component strategy by our largest customer. Furthermore, we are also experiencing lower current and forecast demand from a number of other Consumer sector customers reflecting the broader economic conditions. We expect revenues and margins in our Industrial, Telecoms/Datacoms and Healthcare sectors to be broadly in line with our previous expectations.

Management has initiated a programme of material cost reductions across the Group to reflect the revised revenue and operating profit expectations.  In addition, Management is continuing its focus on improving gross margins through improved labour efficiency and productivity, reduced scrap rates, other operational improvements and the introduction of new, higher margin products.

Despite the weaker than expected near term outlook, the Directors are encouraged by an increasing pipeline of prospective new customers and expectations of the Group's third consecutive year of increasing revenue, a trend that is expected to continue in FY2014. The Directors believe the fundamentals of the business remain sound but recognise there is significant work ahead to bring margins and profitability back to a level commensurate with their objectives for the business.

Further details will be provided in our Half Year announcement to be released on 31 October 2012.

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For further information please contact:

 

Volex plc

Ray Walsh                                          Group Chief Executive                                                                    [phone]

Andrew Cherry                                Group Finance Director                                                                    [phone]

Buchanan

Charles Ryland / Louise Hadcocks                                                                                                            [phone]

 

Forward looking statements

Certain statements in this announcement are forward-looking statements which are based on Volex's expectations, intentions and projections regarding its future operating performance and objectives, anticipated events or trends and other matters that are not historical facts. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'anticipates', 'aims', 'could', 'may', 'should', 'expects', 'believes', 'intends', 'plans', 'targets', 'goal' or 'estimates'. By their very nature forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, by way of example only and not limited to, general economic conditions, currency fluctuations, competitive factors, the loss or failure of one or more major customers, changes in raw materials, labour costs or product mix, and issues associated with implementing our strategic plan among other risks. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, Volex undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

 

END

 

 

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