1st Apr 2005 07:01
Victrex PLC01 April 2005 For Stock Exchange release at 7.00a.m. Friday 1 April 2005 Victrex plc Acquisition of Raw Material Manufacturing Operations from Degussa Interim Trading Update Victrex plc today announces the purchase of the operations owned by a subsidiaryof Degussa AG relating to the manufacture of BDF (the key raw material fromwhich Victrex(R) PEEK polymer is produced) for cash consideration of £16.3million. The transaction further consolidates Victrex's control of the BDFsupply chain following the acquisition of the primary manufacturing stage of BDFin 1999. The operations acquired today principally comprise an oxidation plant whichundertakes the secondary manufacturing stage of BDF. As a result of thepurchase, the joint arrangement with Degussa (under which they are entitled to50% of the profits arising from BDF manufacture) is terminated with immediateeffect. Details of the acquisition Under the terms of the agreement, Victrex has purchased the oxidation plantwhich forms part of a larger Degussa site at Seal Sands in the north east ofEngland. In addition Victrex has also purchased the remainder of the assets adjacent toits existing site at Rotherham where the primary manufacturing stage of BDF isconducted. These newly acquired assets principally comprise a plant thatmanufactures fluoroboric acid (a key raw material for the primary manufacturingstage) which is currently supplied to Victrex under an existing agreement withDegussa. In total, Victrex has purchased tangible fixed assets for £12.9 million andgoodwill for £2.5 million. Victrex has also purchased raw materials,work-in-progress and stock relating to the acquired operations at cost estimatedat £0.9 million. Profit before tax attributable to these assets for the year ended 31 December2004 amounted to £4.9m. The consideration will be funded from existing cash resources and borrowingfacilities. Financial effects Victrex expects this transaction to have a neutral effect on earnings per sharein the current financial year and to be significantly earnings enhancing in theyear to 30 September 2006. The assets acquired, including goodwill, will be consolidated on Victrex'sbalance sheet with effect from today. David Hummel, Chief Executive of Victrex plc, commented: "The transaction completes another step for Victrex in consolidating our supplychain for the key raw material for Victrex PEEK. Self-sufficiency in oxidationwill give us even greater control of quality, costs and capacity." Interim Trading Update Continued strong demand has resulted in first half sales volume of approximately985 tonnes, some 6% ahead of the second half of last year (933 tonnes) and 13%up on the previous first half of 869 tonnes. •Asia-Pacific sales continued to grow strongly with a record volume of 210 tonnes, up 43 % on last year's second half (147 tonnes) largely due to the continued penetration of new applications as a result of our ongoing commercial investment programme in this region. •European sales volume at 495 tonnes was 4% up on the previous second half (478 tonnes). •United States volume of 280 tonnes was 9% down on last year's second half (308 tonnes) primarily due to softening demand in the semiconductor sector, combined with some shifting of sales to Asia as end users move to local sourcing. •Invibio, the medical implant materials business, continued to show strong revenue growth in the first half. The announcement of the Company's results for the six months ended 31 March 2005will be made on Tuesday, 7 June 2005. -Ends- For further information please contact: Victrex plc 0207 357 9477 (1 April 2005)David Hummel, Chief Executive 01253 897700 (thereafter)Michael Peacock, Finance Director Hogarth Partnership Limited 0207 357 9477Nick Denton / Barnaby Fry Notes to Editors Victrex plc is an innovative, world leader in high performance materials throughthe manufacture of Victrex(R) PEEK polymer. It has manufacturing plants and research facilities in the UK and a globalnetwork of sales and distribution centres serving customers based in over 30countries. Victrex PEEK is a high performance, easy to process, thermoplastic with a uniquecombination of properties including exceptional chemical, wear, electrical andtemperature resistance combined with dimensional stability. These properties enable engineers to deliver cost effective and improvedcomponents across a broad range of markets in every day life applications suchas heating and cooling systems, coffee machines, cars, microchip manufacture,aeroplanes, mobile phones and surgical instruments. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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