Volex Group, the British electronic cable group that employs 280 people in Mayo, issued a profit warning yesterday, saying sales last year are likely to be 10 per cent below expectations.

The company, which manufactures cables and power-cords, shed more than 500 jobs at the Castlebar plant in the 12 months to January 2002.

Volex blamed the underlying decline in the telecoms sector, traditionally its largest market. Although orders were buoyant in 2002, the translation into delivery schedules was slower than anticipated.

The company declined to say whether it would cut more jobs to trim overheads and was unwilling to be drawn on the future of the Castlebar facility.

Higher than predicted sales in eastern Europe and Asia failed to offset a sustained downturn in traditional markets. Nevertheless, the company said cost-cutting would help it turn a small operating profit before goodwill amortisation.

Positive cash-flow for the second half of the year is predicted, with net debt at €38 million, compared to €45 million for the same period 12 months ago.

Volex reported sales of €660 million and pre-tax profits of €48.6 million in the year to March 31st, 2001. More than 10,000 people are employed at the group worldwide.

In light of the time-lag in order take-off, the company said it would review its trading position and covenants with bankers. It said it believed it would be able to keep pace with scheduled payments to the banks over the next two years.