London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Downing Strategic Micro Cap Quarterly new letter on Volex :-
https://assets-us-01.kc-usercontent.com/8c961317-6aee-00a7-e4b6-ae38cd847d2d/28cbb15e-1c16-4777-9292-7d9a2f8148ba/DSM3064_Downing%20Strategic%20Micro-Cap%20Investment%20Trust_Investor%20Letter_Aug%202021.pdf
VOLEX continues to impress us, so much so, that we have been adding modestly to our position on bad days – the market is becoming impatient, and we are more than happy to take advantage of this. The company reported an exceptional set of full year results which highlighted great progress across all divisions,
but particularly within the electric vehicle division which grew revenues by 193% to $53.1 million. The electronics division grew, aided by the acquisition of DE-KA which added $9.2 million of revenue and $1.8 million of adjusted
operating profit. Had DE-KA been owned for a full twelve months, the full year contributions would have been $60.7 million and $12.2 million, respectively. Medical was resilient and we are looking forward to a strong recovery
here. Also of note was progress in the industrial division, which includes data centre customers, which enjoyed strong growth and where an upgrade cycle could drive significant upside.
Management have consistently upgraded guidance since we have owned it and we think that there are several avenues for upside to consensus forecasts over the next year with current 2022 and 2023 adjusted operating profit
guidance at $52.0 and $56.9 million, respectively, versus $42.9 million delivered in FY2021. We present some of our upside assumptions below.
Firstly, assuming the full 12 months of DE-KA performance (rather than just two) would alone generate a small beat on the current $52.0 million forecast at just over $53.0 million. However, management have disclosed two key catalysts here – that they have won a significant new customer, and that they are investing in new manufacturing lines which will expand capacity by around 25%. We believe that most of this capacity expansion will be filled, such is the strength of current demand and that which will be introduced by the new large customer. Napkin maths
suggests that, all else equal, DE-KA alone could drive upside to the $52.0 million consensus of $2-4 million of adjusted operating profit on a fully annualised basis, with the capacity not likely to come online until H2 this year.
We keep margins constant in the above, but we would expect operating leverage to come through as more volume is put through facility.
Upside driver number two could lie in the electric vehicle (EV) segment which posted rapid growth this year, from $18.1 million in FY20 to $53.1 million in FY21. Consensus for this year indicates revenue estimates within EV of
around $70 million. Based on reported growth rates, we think this could be conservative. Whilst H1 electric vehicle revenues were not disclosed, we think these were likely $12.0-15.0 million and we think that H1 exited at around
$5 million per
FLYING...as in new territory now....
413p
Today may be a good day for the sp now the recent news is digested. :-)
Closing auction @16.35 (UT trade) gives the official closing price of 399.5p
CLOSE but no cigar....
Not far off at all now and plenty more to come I believe.
Copy over of post on ADVFN:-
Cannacord raises target to 500p…
“The acquisition of Irvine Electronics strategically enhances the group's North American IMS offering by adding capacity and technical know-how on the West Coast while strengthening its presence across attractive defence, military, aerospace and medical markets through a blue-chip customer base. We see EPS accretion of 1.8% in FY22E, 5.1% in FY23E and 5.0% in FY24E while noting our estimates see Volex hitting its 2024E revenue target of $650m and $65m of underlying operating profit without further M&A. We reiterate our BUY rating with an increased TP of 500p (from 475p).”
396p
NEW HIGH
Far more to come
Daddler1 you should have bet more than a pint on the 400+ sp in September. Good news all round for Volex "fans".
Absolutely, and demonstrates NR’s commitment to achieve his target of $650 million in revenues and $65 million of underlying operating profit by 2024, if not sooner at this rate !
Announcement this morning….
Volex has announced today that it has signed a share purchase agreement for the acquisition of the entire issued share capital of Irvine Electronics, Inc. for a total consideration of $16.4 million
Founded in 1990, Irvine is a US based manufacturer of electronic solutions supporting long-term projects in the defence sector with other significant customers in aerospace, medical and complex industrial technology sectors. It has a 50,000 square foot manufacturing site in Irvine, CA which provides ample capacity to grow and is accredited to stringent international quality standards.
The acquisition strengthens Volex’s existing profile in North America, adding further capabilities and capacity in California to complement the Group’s existing operations in Washington state and Mexico, creating a compelling value proposition for customers in the region with vertically integrated manufacturing solutions through enhanced printed circuit board assembly capabilities.
Commenting on the acquisition, Nat Rothschild, Executive Chairman of Volex said, “”The acquisition of Irvine increases our geographic coverage and technical capabilities in the key North American market. Our strategic intent is to develop Volex’s presence in the defence and military aerospace markets, adding further blue-chip customers involved in long-term programmes and partnerships.
With advanced manufacturing located in Southern California, in the center of one of the most dynamic electronics manufacturing environments in North America, Irvine will enhance our footprint, further complementing our total integrated manufacturing solutions strategy and strengthening our global capabilities in new and existing markets.”
Another acquisition, of Irvine Electronics, in the USA, for $16.4m. Looks a cracking deal - low multiple of EBITDA (current run rate $3-4m pa). Good strategic fit, with most of Irvine's customers being in the defence sector.
Will be watching this one next week ££££££
Don’t look as though it will drop much so added still looks good value.
Markets doing a knee jerk. Hope the sp drops a good bit today 5% would be nice.
From today’s Times…
If you own a laptop, vacuum cleaner or television, it is likely that at least part of it was produced by Volex, a maker of high-spec cables.
The AIM-listed company, which traces its roots to the 1890s, also makes cables for charging electric cars and scanners in hospitals, and wiring for data centres.
Cables have become big business, helping Volex to transform from a small-cap horror story to one of the bright lights of London’s junior market. Until a few years ago, it had been all but written off. The share price fell from a high of £20 in 2000 to a low of 39p in 2003, a drop of 98 per cent. This prompted a switch to medical and industrial sectors.
It was the arrival of Nat Rothschild, the financier, as a shareholder, non-executive and then executive chairman that transformed its fortunes. He began building a stake in 2008, and now owns 26 per cent, making him the largest shareholder. On Rothschild’s watch, Volex has increased its prices and ditched low-margin businesses, which helped to boost its operating margins from 2.8 per cent in 2017 to 9.7 per cent.
Now the turnaround is under way, Volex is targeting growth. It has 17 factories on three continents, and employs 7,000 people, including in Basingstoke. Its fastest-growing divisions make parts for data centres and electric vehicles. The latter represent 12 per cent of revenues, rising 193 per cent to $53 million in the year to April 4. Volex is increasing production capacity, particularly in Asia.
The company has done well over the past 18 months despite lockdowns. In March last year, when professionals were forced to work at home, its customers reported a surge in demand for laptops, monitors and printers. Then there was a shift to home entertainment. Once families had built up savings, sales of white goods soared as homeowners renovated. The question now will be how long the spike in consumer spending lasts. Either way, Volex is diversified enough to benefit. As hospitals are opening up, its medical business should rebound.
In the year to the end of April, Volex reported its best profit performance for 20 years. Pre-tax profits rose 84.9 per cent to $29.4 million on revenues up 13.3 per cent to $443.3 million. It also increased its dividend by 10 per cent to 3.3p.
Volex’s acquisition of European power cord-maker Deka is likely to be repeated with further bolt-on deals. HSBC has a target of 445p on the shares, while Stifel is predicting 410p. The shares closed at 357p on Friday, valuing the company at £565.4 million. This is one to watch. Buy.
I think in the not to far off future most parking bays will have ev chargers in and there will not be any petrol stations as we know it. So to my mind volex will end up being a very big company or taken over. Even with the obvious competition that will emerge they should not have any problems considering the massive market that’s emerging for electric vehicle charging stations .
Nothing is certain on the stock market,, but It seems obvious that this will go above its 52 week high before long, would wager a pint it’s over 400p by September.
Think many of us would buy more on any SP collapse ( provided it wasn’t Company specific ! ) as VLX has engineered itself into the right sectors at the right time under Nats leadership. Will be interesting to see how he eventually monetises his own investment !
Took some profit today not a lot but enough to keep me happy and my account. Still holding my 1000 which I will add to on any decent falls. :-)
Cannacord upgrades Volex…
• Increased guidance provides an early upgrade: While we flagged upside risk
to our estimates in June, the early guidance upgrade (FY22E underlying operating profit to be slightly ahead of previous $50m consensus average) suggests customer demand and visibility across consumer electronics/white goods, EV, data centres and medical is stronger than we expected. Accordingly, we have increased both our adj. PBT and EPS estimates by 7.4% in FY22E, 5.0% in FY23E and 3.3% in FY24E.
• Navigating supply-side challenges: The group has successfully passed through copper price inflation and continues to manage supply-chain headwinds, including freight. There is no suggestion of margin dilution relative to previous guidance levels.
• Market read-across suggests positive outlook: We note recent results and commentary from leading medical equipment, white goods and EV OEMs which, in our opinion, suggests further financial outperformance could be on the cards for Volex as structural demand drivers and the COVID-19 recovery continues to play out. To this point we note that Q2 order intake for Philips Healthcare's Diagnosis & Treatment vertical increased 29% y/y, with strong double-digit growth in Image-Guided Therapy, Ultrasound and Diagnostic Imaging.
• Maintain BUY, increase TP to 475p (from 440p): Our target price is based on CY22E sector P/E average of 25x applied to our respective EPS estimate
Yes this and Novacyt I would say.
Dead right, that’s why I’ve just added another 1000 .
This is the stingiest SP on the LSE.
Tell me I'm wrong.