Victrex fears macro-economic recovery some way off
Lancashire headquartered polymers business Victrex has warned the markets this morning of lower profits than previously expected.
In a statement covering the period ending 31 May 2023 the company said ongoing macro-economic weakness and industrial customer destocking were impacting performance in several end markets. During the first half, Group volumes declined by 14%.
The company said it is ready to “benefit from a macro-economic recovery”, but that latest indicators suggest current headwinds will now continue over the summer and at least until the end of their financial year in September 2023.
Volumes are now tracking in excess of 20% down, compared to the record prior year. Revenue is tracking down by a mid-single digit percentage rate. If current run-rates continue, full year revenue would be down between 6%-10%.
The statement concluded: “In our Outlook at the interim results stage, we signalled that delivering full-year adjusted (pre-exceptional) profit before tax (PBT) in line with expectations assumed a step up in demand during the latter part of the second half, driven by macro-economic conditions.
“Whilst we are seeing progress on gross margin, driven by pricing, sales mix, currency and easing energy costs, Group adjusted PBT to 31 May 2023 was approximately £53m. With no step up in demand going into the final quarter currently visible, and the resulting lower industrial revenue expectations, our full year adjusted PBT is now expected to be between £80m-£85m.”
For context, last year’s revenues at the Cleveleys-based group achieved an 11% increase in revenues, of £341m, while volumes rose eight per cent to 4,727 tonnes.
Pre-tax profits fell from £92.5m the previous year, to £87.7m this year, after exceptional items of £7.9m.
