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(Alliance News) - Volex PLC on Thursday said its five-year plan was "on track" after it reported a yearly earnings hike, and the electronic components maker said it will fork out EUR178 million for an acquisition.
It also announced a GBP60 million placing, to help fund its growth plans.
The Basingstoke, England-based firm said its pretax profit for the year ended April 2 rose 27% to USD45.8 million, from USD36.2 million the previous year. Revenue increased by 18% to USD722.8 million from USD614.6 million.
Volex declared a final dividend of 2.6 pence per share, up 8.3% from 2.4p the prior year. Its total dividend for the year totalled 3.9p per share, also up 8.3% year-on-year.
Going forward, Volex said it had started the current year "with good momentum and high levels of customer demand" and increased production thanks to improved supply chains. It said it is confident in making "making continued excellent progress towards [our] five-year plan".
"With strong cash generation, a healthy balance sheet and access to funding we are well-placed to capitalise on the significant opportunities across our markets," said Executive Chair Nat Rothschild.
"With our track record over the past five years, we are confident that our strategy and operating model continues to provide us with the opportunity to deliver long-term organic growth alongside complementary, earnings-enhancing acquisitions."
Volex also said it has agreed to acquire Turkish wire harness manufacturer Murat Ticaret Kablo Sanayi AS for a total consideration of up to approximately EUR178.1 million. This will be satisfied through EUR136.5 million in initial cash and up to EUR41.6 million of deferred consideration over two years, subject to performance conditions.
The acquisition is expected to completed within the next two or three months, subject to approval by the Turkish and Macedonian competition authorities.
"We believe this transaction is truly transformational for Volex, further diversifying our end market and customer exposure by adding a new, fifth growth end market, broadening our product and knowledge offering, whilst structurally improving the profitability of the group," Volex's Rothschild commented.
Finally, Volex said it has completed a share placing and retail offer of 21.8 million new ordinary shares at 275 pence each, raising gross proceeds of approximately GBP60 million.
Volex said the fundraise was not conditional on the Murat Ticaret acquisition being completed.
Shares in Volex were down 3.5% at 276.00 pence each in London on Thursday afternoon.
By Emma Curzon, Alliance News reporter
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