Volex PLC (AIM:VLX) saw its shares surge 17% higher to 246.98p after the specialist maker of critical power and data transmission products said both revenue and profit for the year just ended would beat market expectations.
The company estimated that revenue for the 52 weeks to 2 April 2023 will be at least US$710mln, up 15.5% on the year before, with underlying operating profit set to come in 17.4% higher at US$66mln.
In addition, the underlying operating margin is expected to improve to 9.3% from 9.1%, as Volex continues to manage cost inflation and retain its “strong competitive positioning”.
“We continue to deliver against the long-term, strategic growth plan that we unveiled last year and I firmly believe that Volex's diverse global footprint, ongoing investment plans and reputation for excellence will continue to drive ongoing outperformance versus our competitors,” said Nat Rothschild, executive chairman of Volex, in a trading update.
“This, combined with our robust balance sheet and healthy cash generation, means that the group is well positioned as we enter the new financial year," he added.
Volex said it has an active acquisition pipeline which it believes will help it achieve its five-year strategy to grow revenues to US$1.2bn by the end of full-year 2027.
The company said its operating free cash flow was “substantially higher” in the second half of the year than the first six months, while net debt at the year-end was US$76mln, a fall of US$22mln since the half year.