Further to the business' good trading performance throughout the COVID-19 pandemic, the closure of the restitution scheme, as detailed below, and the low levels of net debt, the Volex Board has decided to reinstate dividend payments and with these results announces an interim dividend of 1.2p per share which will be paid on 31 December 2020 to shareholders on the register at the close of business on 20 November 2020. As part of its review of strategy going forward, the Board will consider its final dividend policy and will make its recommendation at the time of release of the Company's preliminary results for FY21.
Other financial highlights iinclude:
Total revenue increased by 7% to £46.2m reflecting strong recurring revenues which now represent 89% of total revenue (H1-20: 90%). Recurring revenue has increased to £41m, a 6% increase on the equivalent period last year.
Adjusted operating expenditure reduced by £1.1m (6.3%) to £16.4m reflecting the impact of cost benefits realised through the operational efficiencies delivered in H2-20.
Adjusted EBITDA increased by 19% to £12.3m (H1-20: £10.3m) with margins improving to 26.5% (H1-20: 23.9%) reflecting 62.5% adjusted EBITDA flowthrough on incremental sales of £3.1m.
Adjusted EBITDA less reported capital expenditure increased by 80% to £10.1m due to increased levels of profitability and reduced capital expenditure.
Adjusted operating profit increased by 38.1% to £7.6m (H1-20: £5.5m) with operating margin improving to 16.4% (H1-20: 12.6%).
Cash flows continue to be very strong with £12.9m of adjusted operating cash flow in the period (H1-20: £10.3m) reflecting 105% cash conversion (H1-20: 100%).
Net debt reduced by £17.5m since 31 March 2020 to £17m, and excluding leases previously classified as operating leases under IAS17 was £1.1m (31 March 2020: £13.5m).