Victrex melts as sales slide in weaker first half

Victrex reported weaker interim results on Monday as revenue, profit and sales volumes fell due to a poor performance from its automotive division, adverse currency movement and consumer electronics headwinds.

The polymer provider saw group revenue fall 13% to £145.7m compared to the same period a year ago, after a 16% dip in sales volumes to 1,899 tonnes.

Pre-tax profit fell 21% to £50.2m and earnings per share dropped by 21% to 51.4p.

The interim dividend was held at 13.42p per share, while cash and cash equivalents came in at £49.1m, down from £64.8m at the same point the year before.

Ongoing emissions testing regime and weaker demand sent automotive sales volumes down by 13%, with a first quarter drop of 23%, while electronics volumes fell 42% to 251 tonnes and VAR sales volumes dropped 15% to 733 tonnes.

Medical revenues bucked the trend, rising 1% to £27.9m, though Victrex admitted that planned growth of its dental business had been "slightly slower than we anticipated".

The FTSE 250-traded company said it booked a loss of £2.9m on foreign currency net hedging.

After a 21% decline in first quarter sales volumes, a statement from Victrex added that its second quarter performance had shown signs of improvement as it declined by just 11%, with its automotive performance "stabilising" and growth observed in the oil & gas sector.

"Looking towards the second half, headwinds in the form of currency and cost inflation will be broadly neutral, and incremental operating investment will be limited. We will also benefit from no bonus accrual. However, with some of our key industrial markets remaining weak, our base assumption is that any improvement would be gradual and back-end weighted," the company said.

Victrex's shares were down 4.42% at 2,121.96p at 0801 BST.