Volex recommences dividend in strong results announcement
Volex plc the global provider of Complex Assemblies, has today announced the reintroduction of an interim dividend in half year results released to the market today. Revenues were up 7% to £196m with statutory profit before tax nearly doubling to $9.7m.
Nat Rothschild, Executive Chairman, said:
“I am delighted to announce that Volex plc will recommence the payment of a dividend, starting with an interim dividend of one pence per share. This is the first dividend we have paid since 2013 and it has been made possible due to the significant re-positioning seen across our business during that period. We are now cash generative, creating healthy profits across our two business divisions, and in acquisitive growth mode.
We have a clear strategy to grow this business and increase shareholder value. We understand where we have the capability and expertise to be competitive in our chosen markets. For the first time, the higher-margin Complex Assemblies business made up the majority of our revenue in the first half of FY2020, in accordance with our strategy of repositioning Volex towards higher-margin value-added business. We are well known as a high-volume manufacturer of power cords but it is our Complex Assemblies business that now leads the way in terms of profit generation.
We continue to invest through acquisitions of complementary capabilities and, alongside our customers, in new programmes for data centres and electric vehicles. The businesses that we acquired in the prior year are now embedded within our organisation and operating successfully within the Group. We made another two acquisitions in the first half of this year. Servatron, a US-based integrated solutions manufacturer, expands our capability set and provides additional routes to service customer demand. Ta Hsing, a Chinese manufacturer of cable products, provides us with additional control over our power product supply chain while also reducing our costs.
Within Complex Assemblies we continue to deliver solutions to customers who value our engineering expertise. We use our knowledge in this area to ensure we deliver to the highest quality standards with economical pricing in defensible niche markets such as medical, instrumentation and advanced data centre applications.
Certain customer segments play to the strengths in our Power Cords division. We work best with customers who value high-quality products at a competitive price point. We are highly skilled at developing solutions that balance aesthetics and reliability, which positions us well to work with premium brands. We are working hard to develop new customer relationships as well as deliver innovation and efficiency to our existing customers.
Looking forward, we are taking the opportunity to selectively invest in increasing capacity in our key facilities and leverage our global footprint. We are continuing to vertically integrate our power cord manufacturing capability and optimise our supply chain and production capacity to reflect economic trends.
Volex has again delivered a solid first-half performance with growth in trading profit and margins. Despite macroeconomic headwinds, our business is proving resilient. There are further significant opportunities for each of our business units to improve both sales and margin performance through rigorous execution of the strategy, in both the short and longer term. The Board remains confident of delivering its full-year expectations and in the Company’s ability to drive shareholder value.”
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