Cables and connectors manufacturer Volex Group PLC (LON:VLX) managed to maintain operating profitability in its first half despite a fall in revenues from some of its major customers.
In the six months to 2 October, the company managed to shave US$19mln from its cost base, balancing out a 22% decline in revenues from its largest client.
That allowed underlying profit before tax to match the US$3.3mln posted last year.
“I am pleased to report that underlying profitability has been maintained at prior year levels reflecting the actions that we have taken to address the continuing decline in revenues from several of our larger customers,” said executive chairman Nat Rothschild.
Liberum praised the cost control, but was more impressed with Volex’s net cash position of US$5.2mln at the end of the period, compared to the net debt of US$5.4mln a year earlier.
“First half net cash has beaten our full year estimate on encouraging working capital management,” the City broker said in a note today.
Overall, revenues slipped by 12% to US$166.1mln for the period.
Volex expects its core markets to remain “highly competitive” in the second half of the year and told investors that revenues will be slightly lower than those achieved in the first six months.
Costs will continue to be monitored as it continues to focus on profitability, the firm added.
Shares were down 2% to 35.9p in early deals on Friday.