Shares in polymer, and plastic coating manufacturer Victrex (VCT) surged 6 per cent after the company reported an acceleration of volumes through the first half on stable profit margins and announced a 15 per cent hike in the dividend.
Sales volumes in the core polymer solutions (VPS) picked up from 640 tonnes in the first quarter to 752 tonnes in the second quarter, and that momentum has continued into the second half. The pipeline for new business remains strong at 2,242 tonnes.
European volumes were up 8 per cent in the six-month period, driven by strong demand in the transport sector for lightweight parts for the Boeing 787 and fuel-efficient cars. That helped offset weaker demand in the US oil and gas drilling sector and flat demand from the electronics sector. Overall operating profit from the segment rose 2 per cent to £33.2m. However, the smaller Invibio biomaterial solutions business suffered a 7 per cent fall in profits as growth in Asian markets was more than offset by de-stocking of spinal products in the US healthcare market.
Capital investment increased by a third to £16m, mainly relating to a £90m investment to increase capacity in Victrex's ultra-resistant PEEK polymer. The project is due for completion in early 2015. Broker N+1 Singer expects full-year adjusted EPS of 83.5p, rising to 93.8p the year after (up from 85.1p in 2012).
VICTREX (VCT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,699p | MARKET VALUE: | £1.44bn | |
| TOUCH: | 1,697-1,700p | 12-MONTH HIGH: | 1,765p | LOW: 1,164p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 323p | NET CASH: | £74.3m | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 106 | 46.2 | 41.6 | 9.00 |
| 2013 | 106 | 45.7 | 41.7 | 10.35 |
| % change | +1 | -1 | - | +15 |
Ex-div: 12 Jun Payment: 2 Jul | ||||
