A diverse revenue stream once again served Victrex (VCT) well. So, while the consumer electronics side continued to struggle, automotives, electronics (not including consumer) and value-added resellers helped to push profits 5 per cent higher in the six months to March 2017.
Victrex makes thermoplastic used in consumer items such as smartphones, aeroplanes and cars, and the group is currently focusing on a move towards the production of semi-finished products and components as a way of differentiating itself from the growing number of competitors. This diversification process continued after the period-end with the acquisition of fibres business Zyex for £10m, whose products include fuel filters and food processing belts.
Demand for consumer electronics remained volatile, but outside this segment volumes were up by 50 per cent. Growth in automotive sales was also strong, notably in relation to ABS braking systems and transmissions. And sales to value-added resellers rose by nearly a quarter. In energy and other industrial, sales grew by 15 per cent, although trading in the oil and gas sectors continued to be more challenging.
The business model throws off a lot of cash, with operating cash conversion up at 137 per cent, which meant that net cash nearly doubled, not including the cost of Zyex.
Analysts at Numis are forecasting pre-tax profits of £114.4m and EPS of 108p for the year to September 2017 (from £100.3m and 96.7p in 2016).
| VICTREX (VCT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,006p | MARKET VALUE: | £1.72bn | |
| TOUCH: | 2,005-2,006p | 12-MONTH HIGH: | 2,037p | LOW: 1,364p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 488p | NET CASH: | £86m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 117 | 47.5 | 45.5 | 11.73 |
| 2016 | 131 | 50.1 | 46.4 | 12.2 |
| % change | +12 | +5 | +2 | +4 |
Ex-div: 8 Jun Payment: 30 Jun | ||||
