LONDON (ShareCast) - Power and data cabling solutions provider Volex disappointed investors on Wednesday morning after revealing it had experienced a reduction in gross margins and operating profit.

The group explained that while changes had resulted in second half revenue coming in ahead of consensus market expectations, these had in the short-term also had a negative effect on profit.

In the past, the group has delivered second half revenue below that seen in the first, but in the past year the trend was reversed, which Volex attributed to its better leveraging its global presence, operational performance and increased focus on price competitiveness, which formed part of its wider transformation plan.

As had been previously announced, the company's underlying operating profits in the year were "materially lower" than prior year, but within the range of market expectations.

Chief Executive Christoph Eisenhardt remained upbeat, saying: "I am delighted with the good progress that is being made with the transformation plan and we are particularly pleased with the revenue growth delivered in the second half of the financial year. Order intake for the new financial year is also encouraging.

"This reflects our strong focus upon addressing the growing markets of power and data cable solutions, leveraging our global presence and improving cost competitiveness. As we move through 2014 we look forward to delivering further cost savings as set out in our plan."

Revenue growth within both the Power and Data Divisions have been identified as key objective for the year ahead, with progress already being made with both.

Growth in order intake is being delivered from existing and new customers, the firm added, with increased allocations of current products and new products also being launched.

The group also revealed that net debt at the year-end was $33m lower than expected.

The share price fell 8.55% to 99p by 08:40.

NR

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