Volex hints at significant order uplift on back of China’s 4G surge

Ditched by Apple, London cable maker now looks back on track

pleased @strength of data cablin- eisenhardt

London-based mobile cabling provider Volex looks set to provide shareholders with some good news at last after reporting that China’s roll-out of 4G is boosting its own order books. Just under a year ago the firm’s chairman Mike McTighe stepped down, following in the footsteps of CEO Ray Walsh after full year results in May 2013 showed how revenues had dropped to $473 million during the year, compared to $517 million twelve months earlier. Since then Volex’s shares have been on something of a rollercoaster ride, currently standing at around 96 pence compared a year high of 132 pence.

Previously the Aim-listed manufacturer’s fortunes also took a severe dive when key customer Apple opted to source elsewhere for its iPhone ‘Lighting’ cable, a component that accounted at the time for a major part of the British supplier’s revenues.

But now Volex is hinting at better times ahead. It claims that in recent years it has established a strong presence as a supplier to the expanding 4G mobile market, where it provides data cabling systems for mobile phone base station masts, each of which can require up to 70 cables.

It points to the fact that in the Peoples Republic, especially, China Mobile – the world’s largest mobile service provider – is rapidly expanding its 4G network, potentially involving the installation of up to one million mobile phone base station masts.

It says that local Chinese telecom equipment manufacturers Huawei and ZTE, which it describes as “significant customers” of Volex are benefiting from the infrastructure expansion with the result that its own order books are now showing an uplift.

Commented Christoph Eisenhardt, CEO of Volex, “We are pleased that the strength of our data and power cabling solutions in the telecoms sector is increasingly being recognised by our customers in China.”

“The Telecom/Data-Centre sector represents approximately 15 per cent of the Group’s total revenues and is a meaningful contributor to Group profitability.”

Volex’s preliminary annual results are due to be announced in just over a month’s time, on June 12 [2014].

In early trading today [7th May 2014] Volex’s shares were up nearly 5 per cent to the 101 pence mark.

About Dave Evans

Dave Evans is a long established commentator on both the IT and cellular industries. His current focus is on share price trends within the sector. You can email him here
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