13th May 2024 13:52
(Alliance News) - Victrex PLC's long-term prospects remain encouraging although it faces a challenge to hit full-year forecasts, analysts on Monday said.
Victrex on Monday said profit slumped in the first six months of its financial year, although the company expects to see improvements in the latter half.
The Lancashire, England-based innovative developer of high performance polymers reported a 34% fall in pretax profit to GBP28.0 million for the six months ended March 31 from GBP42.5 million the year prior.
Revenue over the same period declined 14% to GBP139.3 million from GBP162.2 million.
Victrex announced an interim dividend of 13.42 pence per share, unchanged year-on-year.
As previously announced, guidance for the year anticipated a slow start, with improvements expected in the second half in line with the wider gradual macro-economic recovery.
Jefferies thinks Victrex has a "lot of work to" in the second half of the financial year to be able to meet consensus numbers.
The broker said while there is no explicit downgrade statement, volume & average selling commentary for financial 2024 has been "tempered," second half gross margin is expected to be in line with the first half's 48.0% compared to prior guidance of slightly lower than 53%, and net interest is expected to be GBP2 to GBP3 million, "which we don't believe is in numbers."
As such, Jefferies believes consensus financial 2024 numbers look "aggressive."
But broker Peel Hunt took a brighter view.
"Victrex management is confident in the mid-to-long-term opportunities and, given the recent end-market improvements, we believe the growth moving into [financial 2025] looks encouraging," the broker remarked.
Shares in Victrex shrugged off a weak start to trade up 0.9% at 1,295.26 pence each in London early Monday afternoon.
By Jeremy Cutler, Alliance News reporter
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