Volex Regulatory News (VLX)

29 Jan 2008 15:59

Volex Group PLC29 January 2008 29 January 2008 Volex Group plc Trading Update Volex Group plc, the global electrical and electronic cable assemblies company,is providing an update on recent trading performance. The restructuring of our Wiring Harness division is well advanced, however, ithas taken longer to deliver the operational efficiencies than we had expected.This has impacted operating margins, with higher costs incurred in maintainingcustomer service levels. These additional costs are expected to reduce to morenormalised levels by the end of the financial year when the restructuring willhave completed. We are seeing growth in Interconnect products (particularly from industries suchas medical and IT), despite a significant and well publicised downturn in thewireless infrastructure segment. However, the cost to support the ramp up of newproducts has been higher than we expected in terms of start up costs andinefficiencies. Nevertheless we remain confident that the Interconnect segmentrepresents a significant profit opportunity. As a consequence, whilst sales are expected to be broadly in line with ourexpectations, operating margins and profit before tax in the second half will besignificantly lower than those reported for the first half. Overall revenue growth has accelerated from the first half and we expect thatthe momentum will continue throughout the rest of the year. We continue to winnew projects across all three divisions that will provide a strong base tosupport the expected growth next year. We are gaining market share with our keytargeted customers in market segments which are currently experiencingstructural growth. The strategy to focus on key technologies for market leadingcustomers is yielding results. While we remain cautious about the impact of any change in global economicconditions, the Board is broadly comfortable with the trading outlook for thenext financial year. We will issue our next interim management statement onFebruary 15th. END Volex Group plc 01925 844601 Heejae Chae, Group Chief ExecutiveIan Degnan, Group Finance Director Weber Shandwick Financial 020 7067 0700Terry Garrett This information is provided by RNS The company news service from the London Stock Exchange