Volex has enjoyed a huge boost in revenues this year – driven by a raft of acquisitions from the power and connectivity specialists.
The London-listed company completed four buys over the 12-month period up to April 2022, including three businesses in North America: Irvine, Prodamex and TC.
The deals strengthened manufacturing footprint for domestic appliances, integrated manufacturing services and defence in the world’s biggest free market.
It also snapped up inYantra from the high-growth Indian market, where it is involved in the manufacture of printed circuit board assemblies and box builds.
This flurry of activity contributed to a 38.6 per cent rise in revenues to $614.6m, while earnings spiked 31 per cent to $56.2m.
While net debt has soared from $27.3m to $95.3m, this is a reflection of heavy investment from Volex amid the pandemic rebound.
The group’s operating margin has remained solid at 9.1 per cent despite inflationary headwinds.
It has also ramped up its engineering and sales teams, with the expectation this continue to support further organic growth.
Multiple divisions experienced strong trading performance over the full-year, with electric vehicles (EVs) sales almost doubling, growing Volex’s total sector revenue for EVs to over $100 million
There was also a six per cent hike in revenues for complex assemblies and box builds, despite some delays in the take up of next generation data centre products, due to semiconductor shortages
With Volex’s financial performance significantly ahead of its existing strategic plan, the company is launching a new five-year plan.
Its ambition is to deliver revenue of $1.2bn by the end of 2027, with underlying operating profit margin in the range of 9-10 per cent.
Nat Rothschild, Volex’s Executive Chairman said: “We continue to see significant opportunities across our market. The infrastructure and acquisition investments we have made in 2022 are focused on our pursuit of further growth, capitalising on the leading position we have in attractive sectors. With an exciting acquisition pipeline and access to funding, we will continue this successful strategy.”
Commenting on results, Andy Chambers, Director at Edison Group said: “Volex has started the full-year strongly as high levels of customer demand for Volex’s products and services to continue while managing ongoing inflationary pressures and supply chain lead times. It has an exciting pipeline of acquisition opportunities and financial flexibility. Given the success in delivering growth and the new extended plan the rating looks undemanding.”
The company trades on the FTSE AIM UK 50 Index – and was trading at 240p per share at close of play yesterday.