Volex making good progress as firm lays out 2027 growth targets
Volex managed to navigate a sluggish demand environment over the past year, reporting that revenue and profit had climbed significantly.
In a trading update covering the year to March, the manufacturer of critical power and data transmission products reported that revenue rose by over a quarter (26 per cent) to $913m (£720m).
The firm said this was driven by “strong organic growth” despite “temporary headwinds” caused by destocking.
Volex’s statutory pretax profit rose 13 per cent on the prior year to $51.6m (£41m). It proposed a final dividend of 2.8p, bringing the total dividend to 4.2p, an increase of 7.7 per cent on last year.
Revenue growth was concentrated in the firm’s medical and ‘complex industrial technology’ divisions.
Volex noted that “improved component availability has enabled customers to begin to address their substantial backlogs” on medical equipment. Revenue for industrial technology was boosted by expansion in data centre products.
This helped to offset falling revenue in electric vehicles and consumer electricals. However, the company pointed to “improved demand from Electric Vehicles and Consumer Electricals customers toward year end, indicating reducing destocking impact.”
The firm also acquired Murat Ticaret Kablo Sanayi in the period to help it push into the Off-Highway segment as a fifth end-market.
“We have doubled our revenues in three years, while maintaining impressive operating margins within our target range of 9-10 per cent. This demonstrates the success of our strategy to diversify our business, increasing the share of our sales involving complex products and managing costs effectively as we grow,” Nat Rothschild, Volex’s Executive Chairman said.
“Our acquisition pipeline remains promising, alongside incremental organic initiatives, underscoring our commitment to achieving our strategic goals. Having started the new fiscal year with strong customer demand, we are confident of making further progress in full-year 2025 and we are firmly on track to achieve our five-year revenue target of $1.2bn (£950m) by the end of full-year 2027,” he continued.