Victrex's interim results were undoubtedly flattered by the horrendous market conditions and poor comparables from 12 months ago. However, the polymer specialist's high operational gearing has clearly been working in its favour as a sharp rise in sales had a dramatic effect on the bottom line.
The rebound was led by Victrex's polymer solutions arm which makes high perfomance thermoplastic, PEEK. Sales here rose 126 per cent to £67.2m with operating profits up from £0.5m to £17.5m. The company shipped more than 1,171 tonnes of material, compared with 772 tonnes in 2009, reflecting higher automotive sales in Europe, increased demand from oil & gas producers and a recovery in semi-conductor sales.
The biomaterials division saw sales increase by a more modest 26 per cent to £22.1m, with operating profits rising 36 per cent to £14.1m as de-stocking among medical devices companies came to an end. Gross margin for the half was 58.8 per cent and with chairman Anita Frew forecasting that sales in the second half will be broadly similar, gross margins for the full year are expected to be around 62.1 per cent, in line with last year.
JP Morgan Cazenove increased its full-year pre-tax profit estimates by 4 per cent to £72m, giving EPS of 62.7p (£25m and 21.7p in 2009).
VICTREX (VCT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 936p | MARKET VALUE: | £779m | |
| TOUCH: | 933-939p | 12-MONTH HIGH: | 1,040p | LOW: 499p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 216p | NET CASH: | £39.4m | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Net div per share (p) |
|---|---|---|---|---|
| 2009 | 47.4 | 10.2 | 8.80 | 5.2 |
| 2010 | 89.3 | 30.8 | 26.8 | 6.4 |
| % change | +88 | +202 | +205 | +23 |
Ex-div: 9 Jun Payment: 6 Jul | ||||
