Volex Share Discussion Threads

[vikeshm1] 18/4/2024 14:15

guys the reason shares are in a downtrend and disapponting response today is the massive debt which
no 1 has mentioned including the motley fool which just wants to sell you tips

Debt over 173m dollars at half yr results & over 143m exc leases and this statement
tells us it won't come down much from 1.3 to 1.1 "leverage" - therefore the current price i think is
2 high and will keep declining till debt reduces.

i would be interested buyer if debt went under 120m

[sundance13] 18/4/2024 14:05

Depends how bad but minimum 15-20% fall probably.

[johndoe23] 18/4/2024 14:02

Disappointing reaction. Wonder what a profit warning would have done!!

[eagle eye] 18/4/2024 11:54

Well done to Nat and everyone at Volex.
Great trading update and excellent outlook too.
I would expect the shares to tick up over the next few weeks as investors gradually wake up and digest the news.

[z1co] 18/4/2024 09:54

The second half of the year saw continuing increases in organic revenue, a result of leading positions in attractive, diversified end-markets that possess structural growth characteristics. Exposure to a number of growth sectors, provides the Board with confidence in the Group's ability to make strategic progress even in volatile market conditions. The acquisition of Murat Ticaret also delivered significant incremental revenue, in a largely new end-market.

[blusteradjuster] 18/4/2024 09:49

Beat me to it, zho.

It would be in people's best interests to read the whole update AND understand it.

zho 18 Apr '24 - 09:05 - 6934 of 6937

[74tom] 18/4/2024 09:28

I mean it's very simple really, a business with 10% operating margins can beat top line by $40m and *only* add $4m to the bottom line...

Looks at the past results, underlying operating margins are as follows;

2019 $21.6m on $372.1m revenue = 5.8%
2020 $31.6m on $391.4m revenue = 8%
2021 $42.9 on $443.3m revenue = 9.7%
2022 $56.2m on $614.6m revenue = 9.1%
2023 $67.3m on $722.8m revenue = 9.3%

So if 2024 was $88.4 on revenue of say $905m, it would imply margins of 9.8% and be entirely consistent with the 5 year trend...

[z1co] 18/4/2024 09:06

74tom

That post is suggesting the poor chap was and is still SHORT

[pcok] 18/4/2024 09:06

Reason the profit not such a big increase clearly explained by the stated investment to prepare for future increases in demand. Continuing to lay the foundations for a successful and growing company into the future shows a well run outfit planning for bigger things. This will rerate.

[zho] 18/4/2024 09:05

>>the problem is that the bigger profit beat was only a small ebit beat>>

Perhaps because "In response to increasing customer demand, the Group invested in the further expansion of its global manufacturing base" which I took to mean that Operating Profit would have been higher without additional investment to create "additional capacity to facilitate growth"

[74tom] 18/4/2024 09:03

I take it you haven't done the maths on that Aublune...

First half revenue was $397.5m, on which they reported an underlying operating profit of $37.4m, so margin was 9.41%

At $900m on the nose for full year (it'll be higher), H2 revenue = $502.5m, and if they are slightly ahead of the $84.2m consensus (I'd take that to mean ~5%), then full year underlying operating profit would be $88.4m

That would mean H2 delivered $51.1m on $502.5m revenue at a margin of 10.15%

They even say in the RNS "Operating profit margins improved in the second half of the year"

So no, you need to do more work before coming to incorrect conclusions!

[z1co] 18/4/2024 09:02

Never the less consensus underlying operating profit of $84.2m will also be slightly ahead of expectations.

The market likes company's that beat profits in the current environment.

Share price will rise strongly after the slight pull back at the opening.

Brokers upgrades will also help in the uplift.

[ali47fish] 18/4/2024 08:59

so aublune what is your conclusion

[aublune] 18/4/2024 08:53

the problem is that the bigger profit beat was only a small ebit beat

beat by revenues b $40m+ and maybe on ebit by like $1-2m

ordinarily you would expect operating leverage and a BIGGER percent profit beat on ebit not way smaller

Margin pressure

This is why I dont think it will kick higher than 305p by the close and may drift

read between the narrative spiel from the company

good performance but thats a lot of extra revenue lifting for only a slight profit beat. imagine if they hadnt beaten on revenue

[kadvfn1] 18/4/2024 08:52

Liking the key word "at least 900" Should rerate quickly from here

[z1co] 18/4/2024 08:49

The 5 five analysts covering VLX have a revenue forecast in the range of $849.8 million to $873.0 so there will be massive upgrades to come.

[z1co] 18/4/2024 08:44

Bought this morning after the slight pull back.

Revenue of at least $900m is significantly ahead of the consensus which is $859.5m.

[johndoe23] 18/4/2024 08:31

Exactly that 5-10% profits lol

[johndoe23] 18/4/2024 08:30

Exactly, why the UK is a disgrace

[igoe104] 18/4/2024 08:30

I wouldn't be surprised if some of those who purchased shares yesterday afternoon are selling now. We definitely live in a corrupt world..

[igoe104] 18/4/2024 08:26

These should be well over £4. Especially when they operate in the EV and Data centers market, big growth markets over the coming decade. If these were listed in the US these would be at least double the price..

[johndoe23] 18/4/2024 08:22

If this was some loss making tech company be up 30%

[pcok] 18/4/2024 08:21

I suspect there will be broker upgrades and positive press comment following this update. The share price should rerate upwards as a result. About time.