Volex expects top-end operating profit after "excellent" first half

Volex PLC on Monday forecast first-half revenue growth of around 22%, although it cautioned that headline year-on-year growth rates have started to "normalise".

The Hampshire, England-based maker of power and data transmission products said trading in the half-year ended September 30 was "excellent", with year-on-year growth in every end-market.

Revenue for the first half is expected to be at least USD710 million, including a contribution of around USD11 million from Kepler SignalTek, the acquisition of which was completed in July. This would be up from 22% from USD583.9 million the year prior.

On an organic constant currency basis, revenue is expected to have increased by at least 21% on the prior-year period.

As it indicated in the group's annual general meeting statement in August, Volex said headline year-on-year revenue growth rates have started to normalise from the 28% reported for the first four months of the year, as the data centre programmes that ramped up in the prior year annualise.

Volex suggests sequential trading "remains the better guide", with first half revenue expected to be around 7% higher than in the second half of financial 2026 on an organic constant currency basis.

Shares in Volex, which joined the FTSE 250 in September after the latest quarterly reshuffle, were down 3.8% at 613.00 pence each in London on Monday morning. They have risen 68% in the last 12 months.

Complex Industrial Technology again grew "significantly" year on year, led by strong growth in aerospace and defence applications, with commercial and industrial applications also growing, Volex said.

Data Centre revenues were well ahead of the prior-year comparator, although below the second half of financial 2026. Nonetheless, Volex said underlying demand for these products remains strong, and the transition to the next generation of higher-speed products, expected to ramp up during financial 2028, is expected to support further growth. "The board's view of the medium and long term growth opportunity is unchanged," it adds.

First half underlying operating profit margin is expected to show progress towards its medium-term target of 12%, reflecting an improving revenue mix, including the higher-margin contribution from KST, and further operational efficiencies. Operating expenses continue to be managed closely.

Second half revenues are expected to be broadly similar to the first half, with current trading conditions expected to continue across most end-markets. As a result, the board expects financial 2027 underlying operating profit to be towards the upper end of current market expectations.

Volex puts consensus for the financial year ending March 31, 2027, for revenue of USD1.37 billion, and underlying operating profit of USD150.4 million. This would be up from USD1.24 billion and USD127.3 million in the financial year ended March 2026.

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