LONDON (Alliance News) - Power and data cabling products company Volex PLC Friday said the trading recovery that it reported in June has continued, with its first quarter results ahead of expectations in terms of both revenues and profitability.
In an interim management statement released ahead of its annual general meeting Friday, Volex said its recent USD18.1 million fund raise and the renewal of its banking facilities means it can move forward with delivering its transformation plan at an accelerated pace.
On June 12, the company posted a pretax loss of USD14.2 million in the recent year, widened significantly from a loss of USD887,000 the year before, as revenue declined to USD400.2 million from USD473.2 million, and it posted higher exceptional costs.
Volex blamed the downturn in revenue on its failure to adapt to intensifying pricing competition, as it continued to chase the higher margins it had previously achieved. Volex said it had failed to meet the requirements of its core customers and as a result, it saw demand drop off in the first-half.
Due to this disappointing trading performance, Volex is overhauling its business with what it calls the "Volex Transformation Plan." This involves restructuring, cutting staff and recruiting new management.
Volex said as a result of its new strategy, its revenue in the second-half of the year was up 3.6%, compared to the first-half.
The stock was quoted up 4.7% at 81.65 pence Friday morning.