14th Jun 2023 08:46
(Alliance News) - Victrex PLC on Wednesday said volumes have continued to decline in recent months as headwinds continue despite an anticipated macroeconomic recovery, and that it expects its annual revenue and profit to drop accordingly.
The Lancashire, England-based polymer solutions company said year-to-date volumes during the period ending May 31 were tracking in excess of 20% down compared to the previous year. Year-to-date group revenue was tracking down by a mid-single-digit percentage rate, and pretax profit was approximately GBP53 million. Victrex said these declines showed "ongoing industrial headwinds" despite "good progress" from its medical division.
For the third quarter overall, Victrex expects volumes to have decreased by about 40% to approximately 800 tonnes from 1,323 tonnes in the third quarter of financial 2022.
Shares in Victrex were down 11% at 1,367.00 pence in London on Wednesday morning.
"Whilst the group remains ready to benefit from a macro-economic recovery, latest indicators suggest these current headwinds will now continue over the summer and at least until the end of [financial] 2023," Victrex said.
Victrex previously announced on May 9 that in the first half of its financial year ending September 30, sales volumes decreased 14% to 1,941 tonnes from 2,264 tonnes for the same period in financial 2022. Pretax profit fell to GBP39.1 million from GBP43.6 million, which Victrex attributed to lower volumes, cost inflation and targeted investment. Revenue was up 1% due to "strong" pricing, improved sales mix and currency.
Victrex at the same time said that continuing macroeconomic weakness and industrial customer destocking were harming performance in several end markets throughout the chemical sector.
Victrex said that if current run rates continue, revenue for financial 2023 will be between 6% and 10% lower than the previous year. It has lowered its expected annual pretax profit to between GBP80 million and GBP85 million, having previously said profit would be in line with financial 2022's GBP87.7 million. The company said that despite improvements in pricing, sales mix, currency and energy costs, the previously anticipated "step up in demand" in the fourth quarter is not "currently visible".
By Emma Curzon, Alliance News reporter
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