Volex’s share price (LON:VLX) added +2.83% today as its trading update pointed to continuing growth at the business.
Volex, the manufacturer of power and data transmission products, showcased impressive growth in its latest trading update.
Year-to-date revenue hit $789.4 million, a +21.8% increase year over year, growth at the company has been delivered organically, and through the successful integration of a series of acquisitions.
Volex produced a +9.60% organic growth rate, that was complemented by a +13.10% growth rate from acquisitions.
The electric vehicle,or EV sector, remains a standout performer for the business , a trend that firm hopes will continue in the longer term, as global EV adoption rates accelerate.
Medical sales have softened slightly, on a comparative basis, however, this appears to be more of a normalization, from a previous high point, than a downturn.
The company’s strategic focus on high-growth economies can be seen in its continiung investments in India and Indonesia.
Net debt currently stands at $151 million, allowing Volex to maintain financial flexibility, while continuing to invest in automation and vertical integration.
The firm’s management is confident that it can sustain operating margins of between 9.00% & 10.00%, thanks to what is described as its strong pricing power and operational efficiency.
Executive Chairmen Nat Rothschild said of the update :
“Our Q3 performance reflects the strength of our business model and our ability to deliver consistent growth across diverse markets. With robust momentum, strategic investments in high-growth areas and a strong financial position, we are well-placed to capitalise on opportunities and deliver sustained profitable growth, keeping us firmly on track to achieve our full-year expectations and five-year strategy.”
Looking ahead, market forecasts of over $1.0 billion in revenues for the full year appear to be achievable, making Volex an interesting player in the critical power and data transmission space.
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