Victrex warns of £8m currency hit

LANCASHIRE industrial polymer manufacturer Victrex has reported a solid first half of growth and remains upbeat on prospects for the remainder of the current financial year despite currency headwinds.

The international company which supplies the automotive, aerospace, electronics, energy and medical markets employs more than 750 people at Poulton le-Fylde.

It said it would see a “high adverse impact”  of £8m at pre-tax profit level as a result of currency movements. However the company expects to “fully overcome the currency impact for the full year and make profit progress”.

In the six months to the end of March profits rose 10% to £53.9m as revenues climbed 9% to £130.3m. The group said it had seen a strong performance from its Victrex Polymer Solutions business,  offsetting weaker sales into the oil and gas sector.

Sales to consumer electronics manufacturers – Victrex’s polymers are used in the smart phone production – were said to be strong with further potential through into 2016.

Chief executive David Hummel, said: “Volume and plant efficiency helped drive improvement in our gross margins during the first half. Our new PEEK polymer capacity also came online and will help underpin our future growth programmes, alongside our downstream manufacturing capability.

“Cash remains strong, helping to support an increase in our interim dividend to 11.73p. As previously communicated, we are progressing our capital allocation and investment for growth plan, and expect to update the market at the year end.

“For the second half year, we are mindful of the tougher comparatives and the ongoing caution in the Oil and Gas market. Foreign currency remains a considerable headwind although we still expect to fully overcome the impact through our positive growth momentum. Consequently, Victrex continues to be well positioned for profit progress over the full year.”