Volex (VLX) H2 2024 earnings summary

Executive summary

• Revenues doubled since FY21, reaching $912.8m in FY24, with record profits and a 6.9% organic revenue growth year-over-year.

• Underlying operating margin improved by 50bps to 9.8%, remaining within the 9-10% target range.

• Diversified end-markets and strategic investments, including the Murat Ticaret acquisition, drive resilience and future growth.

• Destocking impact in Electric Vehicles and Consumer Electricals is reducing, with Off-Highway sector launched and scaling rapidly.

• Confident in delivering the five-year plan, targeting $1.2bn revenue and maintaining margins.

Financial highlights

• FY24 revenue grew 26.3% to $912.8m compared to FY23; underlying operating profit rose 33.3% to $89.7m.

• Profit before tax increased 12.7% to $51.6m; total dividend per share up 7.7% to 4.2p.

• Underlying free cash flow was $56.8m; underlying EBITDA reached $111.6m.

• Net debt (pre-operating leases) increased to $121.1m, reflecting acquisition and investment activity.

• Return on capital employed (ROCE) was 20.3%; underlying basic EPS was 33.7c.

Outlook and guidance

• Promising start to FY25, with continued investment in capacity and automation to support growth.

• FY25 capex expected at ~5% of revenue; depreciation guidance $25m–$30m; effective tax rate 22.5%.

• Dividend payments projected at ~$10m; earn-out payments ~$24m.

• Confident in achieving $1.2bn revenue and 9-10% operating margin by FY27.