The cables and power products group says every division grew in the first half, with full-year profit now tracking towards the top of forecasts.
Volex (LSE: VLX) notched up record first-half revenue of at least $710m, a rise of more than 21% on an organic basis, as demand across its end markets from aerospace to data centres kept momentum building into the new financial year. Despite the milestone, shares in the company were little changed in early trading on Monday.
The muted reaction suggests investors had already priced in much of the good news, with the update largely confirming a growth story that has been building for several reporting periods rather than delivering a fresh surprise.
Volex said growth was broad-based, with aerospace and defence, electric vehicles and data centres leading the charge, while its consumer, off-highway and medical units also expanded. The recently acquired Kepler SignalTek added around $11m to the top line, underlining the group's continued appetite for bolt-on deals to widen its product reach.
Management pointed to steady progress on margins, with the operating margin moving towards its medium-term target of 12% as product mix improves and efficiency gains feed through. The data centre arm, which had enjoyed an unusual surge last year when rivals struggled to meet demand, remained well ahead of the prior year even as supply conditions normalised across the industry.
Looking ahead, Volex flagged a new generation of higher-speed data centre products that it expects to support growth from 2028, while reiterating that full-year underlying operating profit should land towards the upper end of market expectations. With a £20m share buyback nearly complete and the balance sheet described as strong, attention now turns to whether the group can sustain this pace of organic growth as comparatives get tougher.
This report is based on Volex’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full markets 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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