LONDON -- Volex (LSE: VLX.L ) issued a profit warning in an update this morning, as it blamed "a recent unexpected change in forecast demand from the company's largest customer in its Consumer sector," as well as the continuing economic conditions for the anticipated shortfall in revenues and profits for the year ending March 31.
The cable maker expects to see total group revenue year-over-year growth of approximately 5% for the full year. However, the lower-than-expected consumer revenue is set to impact the reported operating profit, which management now expects to be broadly in line with fiscal year 2012.
Volex has implemented a cost-reduction program across the company as a result of the revised expectations. The directors "believe the fundamentals of the business remain sound but recognise there is significant work ahead to bring margins and profitability back to a level commensurate with their objectives for the business."
The trading update stated: "Despite the weaker than expected near term outlook, the Directors are encouraged by an increasing pipeline of prospective new customers and expectations of the Group's third consecutive year of increasing revenue, a trend that is expected to continue in FY2014."
Despite this, shares in Volex have plunged by over 30%, sitting at the time of writing at 176.18 pence, down from yesterday's closing price of 255.25 pence. More results are due in the company's half-year statement, which is due on October 31.
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