Tough consumer electronics markets meant only modest sales growth in the year for power cord and interconnect cable maker, Volex. But operational improvements have boosted the gross margin to 19.8 per cent from 18.8 per cent, with adjusted operating profit having risen 23 per cent year-on-year to $32m (£20m) – leaving the shares looking too modestly rated.
Divisionally, the core consumer unit – which generates 64 per cent of group sales – grew turnover 9 per cent to $330.4m, with tough end markets and supply chain shortages (reflecting Asian natural disasters) weighing on performance. Sales rose just 6 per cent to $36.3m at the industrial division, too, despite continued manufacturing automation. That was attributed to de-stocking, although this has now concluded. Sales soared 24 per cent to $51.7m at healthcare division. However, it saw robust demand from Asia and Europe and benefited from forays outside of its core imaging market. But a spending hiatus among service providers has dragged sales in the telecoms unit down 10 per cent to $99.4m. That said, the rollout of the next generation networks (4G) should prompt a recovery here.
Broker Investec Securities has raised its 2013 forecast by 3.6 per cent and expects pre-tax profit of $33.2m, giving EPS of 45.3¢ ($28.2m and 42.5¢ in 2012).
VOLEX (VLX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 245p | MARKET VALUE: | £153m | |
| TOUCH: | 235-245p | 12-MONTH HIGH: | 365p | LOW: 206p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 82¢ | NET CASH: | $3.6m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 223 | 2.10 | -0.70 | nil |
| 2009 | 265 | 3.50 | 2.80 | nil |
| 2010 | 229 | 6.90 | 9.30 | nil |
| ($m) | ($m) | (¢) | (¢) | |
| 2011 | 490 | 20.3 | 29.3 | 2.00 |
| 2012 | 518 | 19.2 | 30.4 | 4.50 |
| % change | +6 | -5 | +4 | +125 |
Ex-div: 25 Jul Payment: 24 Aug £1 = $1.57 | ||||
