A blistering start to the new financial year has sent Volex shares sharply higher, with management now pointing to profit ahead of City forecasts.
Volex (LSE: VLX) shares surged 20% on Tuesday after the power and data transmission specialist told investors it now expects full-year underlying operating profit to come in ahead of market expectations, following a strong opening four months to its 2027 financial year.
The rally followed a trading update, issued alongside the group's annual general meeting, which showed organic revenue growth of 28% at constant currency in the four months to 31 July, with every one of Volex's five end-markets contributing to the advance.
The strongest contribution came from the Complex Industrial Technology division, where data centre demand remained at the elevated levels seen towards the end of the last financial year, alongside continued momentum in electric vehicle and electrification products. Consumer electricals, off-highway and medical divisions also posted growth, while the completed buyout of the remaining stake in Kepler SignalTek extended the group's medical offering into patient-to-device applications.
Volex was careful to temper enthusiasm slightly, noting that the headline 28% growth figure is flattered by a softer comparative period a year earlier, when data centre programmes were still ramping up, and that growth rates are expected to normalise as the year progresses. Management pointed to tight cost discipline and improved operating leverage as the drivers behind a strengthening underlying margin, consistent with the group's medium-term targets.
With company-compiled consensus currently pointing to revenue of around $1.34 billion and underlying operating profit of about $138 million for the year to March 2027, the board's guidance that profit will beat these expectations sets a high bar heading into the rest of the year. Investors will now watch for confirmation at half-year results of whether the early-year momentum, particularly in data centres and electrification, can be sustained as comparatives toughen.
This report is based on Volex plc’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full results calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Homa Appliances on Unsplash.
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