Last checked at 22 Sep 2008 07:00
22 September 2008
VOLEX GROUP plc
Strategic Review and Trading Update
Volex Group plc, the global electrical and electronic cable assemblies group, today announces a strategic review and an update on current trading.
The Board has carried out a strategic review with Rothschild of its business operations and the most effective way of generating value for shareholders. In considering all of the strategic options available, the Board has decided to investigate the potential for realising value from its Power Products division including its potential divestment or flotation of the business on an Asian stockmarket.
With its Headquarters in Singapore, the market leading Power Products division has over 10 global strategic locations situated in Asia, Europe and the USA, producing over 200 million electrical powercord and cable assemblies for major customers such as Sony, Dell, Samsung, Matsushita, Dyson and other original equipment manufacturers.
Summary financial results for Power Products are as follows:
| Financial year | 2008 | 2007 |
| Turnover (£'m) | 136.3 | 123.3 |
| Operating profit (£'m)* | 8.2 | 6.2 |
* before major restructuring programme and share based payment charges.
Following the intended divestment of its Power Products division, the Board proposes to use the proceeds to develop and strengthen the remaining Divisions and for other general corporate purposes. The Board would also seek to return surplus cash to shareholders. The streamlined Company will focus on building further value in the Interconnect business which, as announced at the time of the Group's preliminary results in June, is demonstrating significant potential through its rapidly expanding Chinese and Indian operations; and on concluding the turnaround of the Wiring Harness division
Any divestment, due to its size, will require shareholder approval at a General Meeting.
Trading during the second quarter has continued the positive trend reported in our Interim Management Statement of 23 July 2008. Revenue growth from Power Products and Interconnect India has remained very strong and there has also been some growth in the Telecommunications sector in Europe. There has been a detrimental impact in the quarter from changes in exchange rates, in particular the US Dollar, though overall trading remains in line with the Board's expectations.
Further announcements will be made in due course.
END
| Volex Group plc | 01925 844601 |
| Heejae Chae, Group Chief Executive | |
| N M Rothschild & Sons Limited | |
| Greg Cant | 0161 827 3800 |
| Scott Sheldon | 0207 280 5000 |
| Weber Shandwick Financial | 020 7067 0700 |
| Terry Garrett / Nick Dibden / James White |