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1. Company Snapshot

1.a. Company Description

Volex plc manufactures and supplies power products and cable assemblies in North America, Europe, and Asia.It provides integrated manufacturing services, such as box builds, wire and cable harnesses, electrical control panels, electromechanical assemblies and systems, printed circuit board assemblies, and ruggedized harness and overmoulding, as well as high mix and low volume manufacturing.The company also offers high-speed copper interconnect/data transfer cables; electric vehicle charging solutions; data centre power cables and power cords; and power cords, plugs, connectors, and receptacles.


Its products are used in complex industrial technology, consumer electronics, electric vehicle, and medical markets.The company sells its products through distributors to original equipment manufacturers and electronic manufacturing services companies.Volex plc was incorporated in 1919 and is headquartered in Basingstoke, the United Kingdom.

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1.b. Last Insights on VLX

Volex plc's recent performance has been positively influenced by the resolution of a significant patent dispute with Credo Technology Group Holding. The settlement agreement ended a lawsuit related to active electrical cable technology, potentially reducing litigation risks. Additionally, the company's strong fundamentals and recent insider buying have been highlighted, suggesting investor confidence. Although there are no recent earnings releases available, the company's positioning in the European small-cap sector presents opportunities for growth.

1.c. Company Highlights

2. Volex's Strong H1 Results Driven by Electric Vehicles and Data Centers Growth

Volex delivered an impressive first half with revenues reaching $584 million, a 13% organic growth, and an operating margin of 9.8%. The company's adjusted operating profit was $57.2 million, and basic earnings per share increased by 30% to $0.197 per share, slightly above the reported actual EPS of $0.1458, which was below estimates of $0.1599. As Jonathan Boaden noted, "We've delivered another excellent first half... with organic growth of 13%." The strong growth was driven by the company's expanding capabilities, particularly in electric vehicles and data centers.

Publication Date: Nov -30

📋 Highlights
  • 10-Year Revenue Growth: Revenues trebled from $7M in FY16 to $106M in FY25.
  • Strong H1 Performance: First-half revenue reached $584M with 13% organic growth and 9.8% operating margin.
  • Data Center Surge: Revenue in data center segment surged 80% year-on-year in H1.
  • Margin Expansion: Operating margins improved from 2% in FY16 to a consistent 9-10% range by FY25.
  • Balance Sheet Strength: Covenant net debt ratio reduced to 1.1x, reflecting improved financial flexibility.

Segmental Performance

The company's electric vehicles segment saw a 13% organic growth, driven by increasing consumer demand in key markets. Data centers revenue surged by 80% compared to the comparative period, driven by growing demand for data center products. In contrast, the medical segment declined by around 10% organically, but the company remains positive about its medium-term prospects.

Growth Drivers and Strategy

Volex's growth is driven by its investments in incremental capacity and capability, as well as its ability to support customers moving manufacturing between countries. The company has a strong focus on cash payback, with the majority of capital programs achieving cash payback within 2 years. It has also made significant investments in product development, focusing on power products for the EV space and next-generation data center cables.

Valuation and Outlook

With a P/E Ratio of 20.06 and an EV/EBITDA of 9.53, the market appears to be pricing in a certain level of growth. Analysts estimate next year's revenue growth at 6.5%. Given the company's strong track record of organic growth and its ability to deliver consistent returns, investors may be justified in valuing Volex on a higher multiple. As Nat Rothschild noted, "We've come a long way with Volex since joining 10 years ago, transforming a business in decline to a standout success story in U.K. industrials." The company's net debt ratio has improved to 1.1x, indicating a strong balance sheet and flexibility.

Risk Factors and Opportunities

The company faces customer concentration risk, but it has a broad range of customers. Volex is also exposed to copper price volatility, but it has a repricing mechanism in place to pass on the risk to customers. The company sees opportunities in consumer electricals, particularly in harnesses, where it can grow its share of the market. Additionally, Volex is implementing AI and other technologies to enhance efficiency in the back office, which will help achieve operating leverage and improve margins.

3. NewsRoom

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Solid State Leads These 3 UK Penny Stocks To Consider

Dec -03

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December 2025's European Undervalued Small Caps With Insider Buying

Dec -03

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Volex PLC (VLXGF) (H1 2026) Earnings Call Highlights: Strong Growth in Data Centers and ...

Nov -20

Source:

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3 Undervalued European Small Caps With Recent Insider Buying

Nov -04

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3 Undervalued Small Caps In Global With Insider Buying

Oct -06

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UK Penny Stocks: Corero Network Security And Two More Promising Picks

Sep -29

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UK Market: NIOX Group And Two Other Stocks Estimated Below Intrinsic Value

Sep -29

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Should You Think About Buying Volex plc (LON:VLX) Now?

Sep -15

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.00%)

6. Segments

Cabling Solutions

Expected Growth: 12%

Volex plc's 12% growth in Cabling Solutions is driven by increasing demand for high-speed data transmission, proliferation of IoT devices, and rising adoption of electric vehicles. Additionally, growing investments in 5G infrastructure, data centers, and smart buildings are fueling growth. The company's focus on innovation, quality, and customer relationships has enabled it to capitalize on these trends and deliver strong growth.

7. Detailed Products

Power Cords

Volex plc offers a wide range of power cords that cater to various industries, including data centers, industrial, and medical devices.

DC Power Supplies

Volex plc provides DC power supplies that are designed for high-reliability applications, including telecommunications, industrial, and medical devices.

Toroidal Transformers

Volex plc offers toroidal transformers that are designed for high-efficiency and low-noise applications, including audio equipment, medical devices, and industrial control systems.

Wire Harnesses

Volex plc provides wire harnesses that are custom-designed for various industries, including automotive, aerospace, and industrial applications.

Cable Assemblies

Volex plc offers cable assemblies that are designed for high-reliability applications, including data centers, industrial, and medical devices.

Electromechanical Assemblies

Volex plc provides electromechanical assemblies that are custom-designed for various industries, including industrial, medical, and aerospace applications.

8. Volex plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Volex plc operates in the electrical manufacturing industry, which has a moderate threat of substitutes. While there are some substitutes available, they are not highly attractive to customers, and Volex plc's products have a unique value proposition.

Bargaining Power Of Customers

Volex plc's customers have low bargaining power due to the company's strong brand reputation and the lack of alternative suppliers. This gives Volex plc an upper hand in negotiations.

Bargaining Power Of Suppliers

Volex plc's suppliers have moderate bargaining power due to the availability of alternative suppliers. However, Volex plc's long-term relationships with its suppliers and its ability to negotiate prices mitigate this risk.

Threat Of New Entrants

The threat of new entrants in the electrical manufacturing industry is low due to the high barriers to entry, including significant capital requirements and the need for specialized expertise.

Intensity Of Rivalry

The electrical manufacturing industry is highly competitive, with many established players competing for market share. Volex plc must differentiate itself through innovation and customer service to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 35.90%
Debt Cost 8.73%
Equity Weight 64.10%
Equity Cost 8.73%
WACC 8.73%
Leverage 56.01%

11. Quality Control: Volex plc passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
AQ Group

A-Score: 5.4/10

Value: 2.9

Growth: 8.1

Quality: 6.9

Yield: 1.2

Momentum: 9.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
FW Thorpe

A-Score: 5.3/10

Value: 5.9

Growth: 7.2

Quality: 8.0

Yield: 2.5

Momentum: 4.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Zumtobel

A-Score: 4.6/10

Value: 9.5

Growth: 2.8

Quality: 2.7

Yield: 3.8

Momentum: 1.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Volex

A-Score: 4.4/10

Value: 4.6

Growth: 6.9

Quality: 4.8

Yield: 1.2

Momentum: 6.5

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
Fagerhult

A-Score: 3.5/10

Value: 4.7

Growth: 3.4

Quality: 4.1

Yield: 3.8

Momentum: 1.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
LEM Holding

A-Score: 1.9/10

Value: 1.6

Growth: 1.4

Quality: 3.0

Yield: 3.1

Momentum: 0.0

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

4.0$

Current Price

4.0$

Potential

-0.00%

Expected Cash-Flows