13th May 2019 07:57
LONDON (Alliance News) - Victrex PLC on Monday said interim results were significantly lower than the previous year due to a weak performance in the Automotive sector.
For the six months to March 31, the FTSE 250 polymer supplier posted a pretax profit of GBP50.2 million, down 21% from GBP63.3 million in the comparative period a year ago.
Revenue reduced to GBP145.7 million from GBP166.6 million, while costs remained stable.
Sales volumes were 16% lower at 1,899 tonnes from 2,256 tonnes, mainly due to weakness in Automotive. Since the start of the second half, however, the company has seen an improving trend.
"As expected, Victrex saw a much weaker first half year, driven principally by Automotive, the associated impact on value-added resellers, the expected headwinds in Consumer Electronics, together with the impact of adverse currency, cost inflation and investment phasing," Chief Executive Jakob Sigurdsson said.
He continued: "Our second quarter showed some signs of improvement, with Automotive starting to stabilise. We also saw a continuation of the improving trend in Medical, where revenues were ahead for the first half, including growth in our HA-Enhanced product. Actions taken to improve manufacturing efficiency and reduce cost also started to take effect."
Due to the weaker first half and some "key" industrial markets remaining weak, the company proposed a flat interim dividend at 13.42 pence per share.
Looking towards the second half, Victrex expects currency and cost headwinds to be "broadly neutral", as it will also benefit from a 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. Overall, our expectations are that it will now be challenging to achieve year-on-year growth in the second half, compared to the prior year period," Sigurdsson said.
He added: "We remain well placed for the medium to long term, with strong structural growth opportunities, a healthy new product pipeline and a highly cash generative business model."
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