Summary
- Volex expects first-half revenue of at least $710 million, with organic constant currency growth of at least 21%.
- Data centre revenue remains ahead year on year but declined sequentially following an exceptional period of supply-constrained demand.
- The manufacturer expects its next generation of higher-speed connectivity products to begin ramping up during FY2028.
British power and data transmission manufacturer Volex expects record first-half revenue of at least $710 million, supported by growth across its markets, although sales to data centre customers have eased from the exceptional levels recorded in the preceding six months.
In a trading update issued on 19 October, the company said organic revenue at constant exchange rates was expected to increase by at least 21% for the six months ended 30 September 2026.
The reported revenue estimate includes approximately $11 million from Kepler SignalTek, the business acquired in July.
Volex said data centre revenue was substantially ahead of the corresponding period last year but below the second half of its 2026 financial year. The reduction follows a period when shortages affecting competing suppliers allowed the company to take a larger share of some customers’ requirements.
The manufacturer had secured critical components early, enabling it to maintain production while other suppliers faced constraints. As component availability improved, that temporary advantage began to diminish.
The company maintains that underlying demand remains strong and that its medium- and long-term expectations for the data centre market have not changed.
Its update offers a distinction between continuing investment in computing infrastructure and the exceptional trading conditions experienced by individual equipment suppliers.
Supply shortages influence component sales
Volex produces electrical and data transmission components used across industrial equipment, computing infrastructure, and other applications.
Its data centre activity includes connectivity products supporting high-speed communications between processors, networking equipment, and associated systems.
As demand for AI computing accelerated, customers required large quantities of components within comparatively short delivery periods. Suppliers able to obtain materials and maintain manufacturing output could secure orders that would otherwise have been distributed across several manufacturers.
Volex says that occurred during the second half of FY2026, when it was able to meet immediate capacity requirements that competing suppliers could not satisfy.
Normalisation of those supply conditions changes the year-on-year and sequential comparisons. A reduction from an unusually strong six-month period does not necessarily mean that customers have reduced their overall investment in data centres.
Nor does growth in component sales establish that equivalent additional computing capacity has already entered operation. Customers may purchase assemblies before installing equipment, completing facilities, or commissioning the associated electrical systems.
The group expects the transition towards its next generation of higher-speed products to provide another source of growth during FY2028.
Higher data transmission rates require attention to signal integrity, electrical losses, connector performance, and the compatibility of complete assemblies with the systems in which they operate.
Product development and qualification can therefore extend beyond increasing manufacturing volumes. Customers must validate new components against the performance requirements of their intended computing and networking platforms.
Volex has not disclosed a separate revenue forecast for the forthcoming product generation or identified a completed deployment programme underpinning that expectation.
Group performance remains stronger than one end-market
Across the business, Volex expects first-half organic constant currency revenue to be approximately 7% higher than in the second half of FY2026.
That group-wide comparison should not be applied to data centre sales, which the company specifically reported as lower on a sequential basis.
The Complex Industrial Technology market continued to grow significantly year on year, supported by aerospace, defence, commercial, and industrial demand as well as data centre activity.
EV and Electrification also recorded strong growth, particularly from a larger share of an established customer’s requirements. Other end-markets, including Off-Highway, Consumer Electricals, and Medical, contributed to the group’s overall performance.
Volex is consolidating manufacturing operations in the United States. To maintain supply during the transition, customers took additional deliveries during the first half, bringing forward approximately $10 million of revenue that would otherwise have been expected later in the year.
That timing effect is separate from the $11 million revenue contribution from the Kepler SignalTek acquisition.
The company expects second-half revenue to be broadly comparable with the first half after allowing for the deliveries brought forward by the restructuring programme.
Its underlying operating margin is expected to move closer to the medium-term target of 12%, helped by changes in product mix and operational efficiencies.
For FY2027, Volex expects underlying operating profit towards the upper end of current analyst expectations. Company-compiled forecasts dated 16 October put that range at $145.9 million to $153.3 million.
These are forecasts rather than reported annual profits. The October update was based on unaudited management information, with detailed first-half results scheduled for 12 November.
The company’s expected covenant leverage at the end of September was no more than 1.2 times, providing headroom under its financing arrangements.
Its latest figures show that data centre component demand remains an important growth driver, but the revenue contribution of any one supplier can change as capacity shortages ease and customers return to more typical purchasing patterns.
The November results will offer a fuller account of margins, cash generation, and the extent to which the next phase of infrastructure demand is replacing the earlier benefit from exceptional supply constraints.
