Volex - on course for FTSE 250 after profit upgrade and 28% revenue growth
It’s been a good morning for investors in critical power and data transmission products manufacturer Volex (LSE: VLX) whose shares are up by 20% to 643p. A trading statement has revealed that the firm made a very strong start to the new financial year (to end-March 2027), delivering 28% constant currency organic revenue growth, year on year, in the four months to July 2026.
Given the strong start to the financial year and the operating leverage inherent within the business model, Volex expects its FY2027 underlying operating profit to be ahead of current market expectations. Those forecasts, based on the consensus of five analysts who have relevant, updated numbers, are for underlying operating profit of $138.3 million, with a range of $135.3 million to $141.3 million.
The business
Volex is a specialist integrated manufacturer of critical power and data transmission products. It serves international blue-chip customers in five end-markets: Complex Industrial Technology, Consumer Electricals, EV & Electrification, Medical and Off-Highway. Based in the UK, the firm operates 23 manufacturing sites, with a presence in 25 countries, and employs c.12,500 people.
In July, the firm completed a move from AIM to the Main Market of the London Stock Exchange, with the board thinking that the LSE listing better reflects the company’s scale and maturity, and that it will broaden the range of potential investors. After today’s share price move the firm is valued at £1.17 billion, which means that it will probably be promoted to the FTSE 250 after the next quarterly review.
Growth across the board
This growth rate seen so far this financial year is said to partly reflect a prior-year comparator in which revenue built progressively as new Data Centre programmes ramped up, and headline year-on-year growth rates are therefore expected to normalise over the remainder of the financial year as this effect annualises. Sequential trading, which the firm argues is a better guide to underlying momentum, has seen average monthly revenues for the period 8% higher than the monthly average for the second half of FY2026.
In the four months to end-July, growth was broad-based across all five end-markets, led by Complex Industrial Technology, where Data Centre customer demand has been sustained at the elevated exit rate of FY2026, and by increased demand for EV & Electrification products, supported by continued electrification trends and customer focus on energy efficiency. Good growth is also said to have been delivered in Consumer Electricals, Off-Highway and Medical.
Also, operating expenses continue to be managed closely, with efficiency savings and enhanced operating leverage supporting improved underlying operating margin performance, in line with the firm’s medium-term strategic plan.
Volex 5-year share price chart
KST acquisition completed
In July, Volex completed the acquisition of the remaining 64.3% of shares in Kepler SignalTek, for up to $89.4 million. KST is a specialist manufacturer of patient-connected medical products and adds an adjacent and complementary product category to Volex's existing Medical business. In the year ended 31st March 2026, KST achieved organic revenue growth of 10%, delivering revenue of $51.8 million, with the integration of KST said to be progressing in line with plan. The deal is expected to be immediately earnings enhancing, and to improve underlying operating margins, with KST's EBIT margin ahead of Volex’s underlying operating margin.
Strategic plan
Volex’s results for FY2026 revealed revenues up by 14.4% to $1.24 billion and underlying operating profits up by 19.9% to $127.3 million. These numbers meant that the firm had delivered on its 2022 five-year strategic plan one year early. The plan was replaced with a new one, with management now having a medium-term target for $2 billion in revenue (with $500 million of organic revenue growth and c.$300 million from targeted M&A). Volex is also looking for 12% underlying operating margins and a 20%+ return on capital employed.
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Disclosures
Volex is not a corporate client of Optimo Research Ltd.
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