Victrex revenue and earnings strong, though H2 visibility low

High-performance polymer company Victrex posted its interim results for the six months to 31 March on Monday, with group sales volumes rising 5% year-on-year to 1,859 tonnes.

The FTSE 250 firm’s group revenue grew by even more, improving 12% to £130.9m, while gross profit was also up 12% at £82.4m.

Its gross margin remained stable at 62.9%.

Profit before tax as 5% higher than the same time last year at £50.1m, while earnings per share improved 2% to 46.4p.

The board declared an interim dividend per share of 12.2p, and increase of 4% over the 11.73p paid to shareholders at the interim in 2016.

“Victrex delivered a positive performance across most of our markets in the first half, with the strength of our core business offsetting much lower year on year volumes in consumer electronics,” said chief executive David Hummel.

“Automotive, electronics (ex-consumer) and value added resellers performed particularly well whilst as anticipated, medical remains muted, reflecting the maturity of the US spine market.”

Hummel said the company made continued progress in its new products pipeline, including an initial production opportunity for gears.

“Our investments to support our ‘Polymer & Parts’ strategy include a joint venture for new and differentiated aerospace products and our Zyex PEEK fibres acquisition, which will enhance our semi-finished and differentiated products offering.

“Our aspirations are for new differentiated products to be 10-20% of sales in the medium term.”

While the company delivered a strong first half performance and the group continued to be “highly” cash generative, Hummel noted there was potential for variability in the scale of consumer electronics volumes during the second half, with visibility remaining low.

“Consequently, although our positive growth momentum has continued into the second half and helps to underpin 2017, our overall expectations are unchanged.

“We are focused on driving growth, on cost efficiency and making progress in delivering our ‘Polymer & Parts’ strategy.”