Last checked at 12 Feb 2013 07:00
12 February 2013
VOLEX plc
Interim Management Statement
Volex plc ('Volex' or the 'Group), the global provider of electrical, digital and optical connections, today releases its second Interim Management Statement for FY2013, covering the 19 weeks to 11 February 2013.
Group trading
Trading conditions have remained challenging, as previously reported in our 14 December 2012 update. Despite the background of macro-uncertainty and general softening of demand, we have won new business with a major global technology company. We are making good progress with our restructuring programme. Our sales and finance functions have been strengthened and are more closely aligned with our sectors. Production cost and operating expense savings are being delivered as expected. Accordingly, management expects full year revenue and operating profit* for the year ending 31 March 2013 to be in line with revised market expectations**.
Update on improvement plan
Management is focused on a number of initiatives to improve performance and consequently rebuild shareholder value. These include strengthening the senior sales leadership team and the effectiveness of our sales organisation, executing our cost reduction initiatives and accelerating the Group's move to a higher margin product portfolio. While there is still much to do we have made good progress.
Daniel Abrams joined the Company, as Chief Financial Officer on 17 December 2012. We have reorganised the sales and finance functions to better serve key accounts, improve alignment with our sectors, and strengthen our forecasting processes. We have also appointed Roger Wendelken as Senior Vice President, Sales and Marketing. Most recently Roger was SVP Worldwide Sales at SMSC prior to its acquisition by Microchip and he has also held senior sales roles at Applied Micro Circuits Corporation (AMCC), Marvell Semiconductors and IBM.
We are on track to deliver the targeted cost savings of an annualised $10m. We have also increased production efficiency and lowered scrap rates.
On 14 January 2013, the Company successfully completed the acquisition of the active optical technology platform from Applied Micro Circuits Corporation, based in California. The acquisition of a patent portfolio, technology and product designs for active optical cable (AOC) assemblies provides Volex with accelerated entry into the multi-billion dollar AOC and optical transceiver market. It represents a modest yet important step towards developing new technological capabilities to drive higher margin revenue growth.
Financial position
Net debt at 31 December 2012 was $14.8m (31 March 2012: net cash $3.6m).
Outlook
Trading conditions have remained challenging in the early part of 2013. Management expects full year revenue and operating profit* for the year ending 31 March 2013 to be in line with revised market expectations**.
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Notes
* Operating profit is defined as normalised operating profit before exceptional restructuring costs and share based payment charges
** The average of analyst forecasts, updated since the trading update on 14 December 2012, is $473m in revenue and $11m in operating profit for the year ending 31 March 2013.
For further information please contact:
Volex plc
Ray Walsh Chief Executive Officer +44 20 3370 8830
Daniel Abrams Chief Financial Officer +44 20 3370 8830
Tulchan Communications
Christian Cowley / James Macey White +44 207 353 4200
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 or labour costs, 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.