Victrex (VCT) has exposure to the automotive, aerospace and energy industries, all of which have been badly hit by Covid-19. The polymer manufacturer’s results for the six months to 31 March do not yet capture the downturn, with the company only flagging “emerging headwinds in forward order book” currently.
Victrex has not issued full-year guidance and will not decide on a half-year dividend until later this year, and has paused a £15m debottlenecking programme.
Despite the reliance on at-risk sectors from Covid-19, the company's first-half sales were up 3 per cent year on year, on a constant-currency basis. Victrex has two divisions, industrial and medical. Industrial sales were up 3 per cent in the first half, to £122m, although its gross profit fell 7 per cent to £62m.
Sales to oil and gas companies were the major issue in this division, falling over 10 per cent year on year, while the Boeing 737 Max grounding started to bite in the aerospace division in the second quarter of the period. The smaller medical business saw growth in both sales and gross profits, although the suspension of elective surgeries all over the world will likely impact second-half sales.
Like last year, Victrex has a sizeable inventory in case the Brexit transition goes badly. This is now up to £95m worth of stock, from £85m at the end of the first half of 2019.
| VICTREX (VCT) | ||||
| ORD PRICE: | 1,958p | MARKET VALUE: | £1.69bn | |
| TOUCH: | 1,921-1,983p | 12-MONTH HIGH: | 2,574p | LOW: 1,645p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 542p | NET CASH: | £45m* | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 146 | 50.2 | 51.4 | 13.42 |
| 2020 | 152 | 49.9 | 47.6 | nil |
| % change | +4 | -1 | -7 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes lease liabilities of £8.1m | ||||
