Volex Regulatory News (VLX)

19 Feb 2009 07:00



19 February 2009

VOLEX GROUP plc

Interim Management Statement for the 17 weeks ended 1 February 2009

Volex Group plc, the global electrical and electronic cable assemblies group, today releases its Interim Management Statement for the 17 weeks ended 1 February 2009.

Highlights for the 17 week period since the half year results:

Revenues from continuing operations up 17% (down 7% on constant currency basis)

Operating profit from continuing operations up 190% (up 45% on constant currency basis)

Operating cash inflow of £7m compared with net outflow of £3m in same prior year period; YTD operating cash inflow of £15m

Contracts exchanged for disposal of loss-making Wiring Harness division

The Power Products revenue was flat year on year for the 17 week period, and down 27% in constant currency terms. This revenue performance is in line with the consumer electronics market in general reflecting the current global economic environment. Aggressive cost control combined with reducing commodities prices have allowed the company to maintain operating margins in this division. Having explored opportunities to divest the Power Products division, the company has recently discontinued any such discussions and is working to leverage the strengths of the Power Products and Interconnect businesses.

Our Interconnect business continues to demonstrate strong growth in revenues and profits. Revenues for the 17 weeks are up £13m or 48% relative to the same period last year (£8m and 29% on a constant currency basis). Having returned to profitability during the first half of the year the division generated significant operating profit during the latest 17 week period.

As announced on 9 February, the Group has exchanged contracts for the disposal of its Wiring Harness division, and has already received irrevocable consents from a majority of shareholders to proceed with the transaction. Following approval from the UKLA and the holding of an extraordinary shareholders meeting the disposal is expected to complete before the end of the current financial year. The Wiring Harness division recorded an operating loss of over £4m in the 44 weeks to 1 February 2009. 

The Group has continued its focus on cash generation and balance sheet. Significant improvements in working capital management have resulted in strong cash generation during both the first half of the year and the subsequent 17 week period.

Given current global economic uncertainties, the Board continues to take a prudent view of the market. However, with continuing strong performance in Interconnect coupled with aggressive cost management, combined with the favourable impact of lower commodity prices and the stronger US Dollar, the Board remains comfortable with the trading outlook for the current financial year.

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