Updates

Volex - Shares hit new highs

July 2010

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

The shares spiked to a new high of 166p after Volex announced final results marginally ahead of expectations. Although revenues fell 14% to Â£229m, pretax profit rose 22% to Â£10m, helped by a massive surge in gross margins from 15.9% to 20.2% as the fruits of previous restructuring and reorganisation kicked in. Eps jumped from 2.8p to 9.3p, helped by a low tax charge. Also encouraging was the halving in net debt from Â£14.8m to Â£7.6m. Volex has now reorganised to focus on four core sectors: telecoms / datacoms, consumer, healthcare and industrial and all are now recovering strongly. In its latest note broker, Charles Stanley expects Volex to further improve margins by raising the proportion of Volex designed connectors and assem ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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