Volex has lost more than a third of its value after the electrical equipment group warned full year profits and revenues would be much lower than expected. This follows a similar warning in September, when it blamed component changes made by its largest customer, Apple. Now it says:
Contrary to earlier expectations of growth in second half revenue, the company has experienced a general softening of demand across all sectors as well as delays in specific project timelines, which does not include our largest customer.
It said profits would now be in the range of $11m to $14m, prompting Investec to cut its forecast by 59% to $10.5m. Volex has also made some board changes, appointing Daniel Abrams (previously group finance director at Fiberweb) as finance director and Karen Slatford, currently a non-executive director, as deputy chair.
Analysts at Jefferies said:
Volex has issued a hugely disappointing trading update, with general market softness and project deferrals resulting in a material downgrade in sales/profit expectations. A further reorganization plan and a new finance director and deputy chairman have also been announced. This update is likely to be taken badly by the market, and management has a huge amount of work to do in order to restore its credibility.
Its shares have slumped 48.25p to 92p.
