Cables and power-cords provider Volex PLC (LON:VLX) said trading continues to be ahead of market expectations.
With less than a week of its current fiscal year remaining the company said full-year sales are expected to exceed US$365mln, versus sales of US$322mln in fiscal 2017/18.
READ: Acquisition of GTK
Cash as at 22 March was US$18.4mln, down from US$24.9mln at the end of September but that was after Volex splashed out US$16.5mln on the acquisition of GTK and related costs in December 2018.
A quick bit of maths stripping out the effects of the GTK acquisition indicates more than US$$10.0mln of net free cash flow in the second half of the fiscal year, prompting the company to signal a return to paying dividends in the 2019/20 fiscal year, assuming trading continues to perform in line with expectations.
The dividend was cancelled way back in 2013.
"As announced at the time of the first-half results in November 2018, competition continued to be intense in the second half, and cost inflation has continued across both our raw material and labour cost lines; however, Volex has again produced a solid performance in both sales and operating margins,” said Nat Rothschild, the executive chairman of Volex.
“There remain substantial identifiable opportunities for both divisions to improve sales and margin performance through disciplined execution of our strategy, in both the short and longer term, and we expect to deliver a robust trading performance for the full year, ahead of the board's expectations,” he added.
Shares in were up 10% at 92p in early deals and are up 42% over the last year.