14th May 2018 08:54
LONDON (Alliance News) - Polymer-based products maker Victrex PLC hiked its interim dividend Monday and looked to a further special dividend for the full year after profit and revenue jumped on strong volumes growth.
For the six months to March-end, pretax profit increased 26% to GBP63.3 million from GBP50.1 million the year prior. This was after revenue rose 27% to GBP166.6 million from GBP130.9 million the year before.
Revenue and profit performance was helped by a 21% jump in sales volumes during the period. Victrex sold 2,256 tonnes, up from 1,859 tonnes the year before. This was impacted by a large order within its consumer electronics business, excluding this core business volumes were 13% higher.
Victrex proposed a 13.42 pence per share interim dividend, up 10% from 12.20 pence the year prior.
"This has been a record first half, with broad based growth across our Industrial markets, offset by weakness in Medical," Victrex Chief Executive Officer Jakob Sigurdsson said. "I am also pleased to report several milestones in our new product pipeline, including a supply agreement in Dental to help gain greater market access, the first parts for our Gears mega-programme and a deployment for our Magma oil & gas programme, together with a new long term opportunity offshore Brazil.
"After six months as CEO," Sigurdsson added, "it is clear that alongside having a strong core polymer business, by moving further downstream through our Polymer & Parts strategy we are further differentiating Victrex in a competitive market."
"With strong cash generation, our first priority is to continue investing to support future growth, as well as reviewing partnership and acquisition opportunities," Sigurdsson said. "Alongside our ability to invest, our cash generation continues to offer the opportunity of attractive returns to shareholders, and we expect to update on distribution options at the end of the year."
Victrex plans to pay a special dividend of around 50% of net cash, with a 50p per share minimum distribution. The company added its threshold for such a special dividend payout stands at net cash GBP85 million. As of the end of March, Victrex had net cash of GBP91.8 million.
"Looking towards the remainder of 2018," Sigurdsson continued, "currency will be much less of a tailwind compared to the first half and we are also mindful of the currency headwind for 2019. Nevertheless, whilst growth comparatives become tougher in the second half, our strong momentum keeps us well on track for full year expectations."
In a separate announcement on Monday, Victrex announced David Thomas had been appointed non-executive director of the FTSE 250-listed firm with immediate effect.
Thomas is currently non-executive at Dialight PLC and served as finance head at former FTSE 100 constituent Invensys PLC, acquired by Schneider Electric SA for USD5.5 billion in 2014.
"I am delighted to welcome David to Victrex," Victrex Chairman Larry Pentz said. "He has a strong track record in audit, and commercially as both an Executive and Non-Executive Director. He also has direct experience in industrial and manufacturing companies, which will be invaluable as we focus on delivering our Polymer & Parts strategy and capturing the significant growth opportunities that exist for Victrex over the coming years."
Shares in Victrex were 4.2% lower at 2,614.00 pence on Monday.
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