Trading Statement

Volex Group PLC 11 February 2005 EMBARGOED UNTIL 7.00 a.m. 11TH FEBRUARY 2005 VOLEX GROUP plc TRADING UPDATE In the interim results announcement on 10th November 2004, the Chairman, commenting on current trading, stated that the Group remained cautious about the sustainability of the current demand profile and the challenges the Group faced. The Chairman also reported on the action being taken in North America to bring the Group back to more acceptable levels of performance. Since that update, the North American operation has been brought firmly under control with the new management team now in place and costs have already been taken out of that business unit as it returns to profitability. The operation has substantially recovered from the effects of the fire in Tijuana, Mexico, in September 2004. There has been an adverse effect on the operational results of the division as work has been rapidly transferred to higher cost facilities as a temporary measure but this has enabled the successful mitigation of the impact on the customer base and all customer relationships have been maintained. However, commodity prices, in particular copper, have continued to escalate faster than the Group's ability to recover these increases from its extensive customer base. This factor together with the prospect of somewhat weaker than expected sales in the final quarter of the year is currently expected to produce a profit before tax towards the bottom of the current range of market expectations. Through the course of the current financial year Volex has been working to resolve a number of overseas tax issues relating to earlier years. Negotiations, ongoing with local tax authorities, now indicate that the level of these exposures is greater than previously estimated. The Board therefore considers it will be prudent to increase the level of provisions in the current financial year by up to £3m. The Board is also conducting a review of the Group's balance sheet and currently intends to provide for two property leases and for the goodwill in respect of the Brazilian business. In addition, the Board currently proposes to write off an automated manufacturing line, previously intended for redeployment within the Group but now determined not to be economically viable. The provisions arising from this review are currently expected to reduce net assets at the end of the year by approximately £5m. The insurance claim process in respect of the September 2004 fire in one of the factories in Tijuana, Mexico is continuing and it is not possible at this stage to estimate how much of the insurance claim currently carried as a £2.2m receivable in the Group's balance sheet will be recovered. Upon completion of its budget process, the Group will, in March, start discussions with its three principal banks to extend its existing bank facilities by a further year to 30th June 2006 and to provide sufficient flexibility to carry out operational restructurings aimed at improving the competitiveness of the Group. Whilst the above issues are significant to the Group they are mostly one-off and historical in nature. The Group continues to revitalise its management team, hiring expertise in areas for business growth and has excellent prospects for new business with new customers. The operational performance of the Group is beginning to deliver the benefits of the restructurings over the past number of years. The Group has continued to generate cash from its properties and has realised £3m in the second half of the year from this initiative. The Board believes that actions that have been, and are being, taken throughout the business will continue to position it firmly in the marketplace as a competitive provider of value cable assembly solutions to our customers. D.J. Molloy J. Corcoran Chairman Group Chief Executive For further information please contact: Volex Group p.l.c. Tel: 01925 830101 Dom Molloy, Chairman John Corcoran, Group Chief Executive Derek Walter, Group Finance Director Weber Shandwick Square Mile Tel: 020 7067 0700 Chris Lynch/Nick Dibden This information is provided by RNS The company news service from the London Stock Exchange

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