Volex PLC AGM Statement (2204F)

TIDMVLX

RNS Number : 2204F

Volex PLC

26 July 2016

26 July 2016

Volex plc

AGM and Trading Update

Volex plc ("Volex"), one of the world's largest power cord and harness assemblers, is today holding its Annual General Meeting during which the Chairman will make the following statement on trading for the three months ended June 2016.

"As reported on 9 June 2016, and confirmed today, our revenues have stabilized at close to the level seen in the second half of FY2016 and restructuring actions have had a positive affect on our operating margins. I can confirm that Volex was profitable in the first quarter of FY2017, reversing the loss experienced in the first quarter of last year.

In both our power cord and cable assembly businesses, our year to date revenue is marginally ahead of our budget. The mix in the cable assembly business has been less favorable than during the same period last year and this further underlines the importance of the cost saving initiatives we have undertaken. Our pipeline of new business opportunities is encouraging.

As at the end of June 2016 we have reduced our inventory levels to $39 million, from a high-point of $48 million at the end of February 2016. Our target is to reduce our inventory to below $35 million by the end of our first half. The key areas of focus have been to liquidate excess and obsolete inventory, and to work with our customers to maintain delivery schedules, in spite of lower inventory levels.

Since the year-end we have negotiated an exit from an onerous legacy lease in respect of a former UK-based, production facility. This transaction will result in total cash-savings of $2.3million over the next four years. We are also in advanced discussions to exit a US facility, which if successful, will result in additional total cash-savings of $1.7million over the next four years. Further cost savings across our factory footprint have been identified that will result in additional annualized cost savings, by the end of this financial year, of at least $3 million.

I would like to thank our employees across the globe for their dedication, commitment and hard-work, as we improve our competitiveness and profitability. We have made extensive changes to the organization and work practices over the last year, and I am proud of how the people in Volex have responded to this change."

For further information please contact:

Volex plc

   Nat Rothschild, Executive Chairman                           [phone] 
   Daren Morris, Group Chief Financial Officer              [phone] 

Forward looking statements

Certain statements in this announcement are forward-looking statements which are based on Volex's expectations, intentions and projections regarding its future operating performance and objectives, anticipated events or trends and other matters that are not historical facts. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'anticipates', 'aims', 'could', 'may', 'should', 'expects', 'believes', 'intends', 'plans', 'targets', 'goal' or 'estimates'. By their very nature forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, by way of example only and not limited to, general economic conditions, currency fluctuations, competitive factors, the loss of one of our major competitors, failure of one or more major suppliers and changes in raw materials or labour costs among other risks. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, Volex undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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(END) Dow Jones Newswires

July 26, 2016 02:59 ET (06:59 GMT)