Victrex (VCT) has elected not to award shareholders an extra payout following two years of special dividends after the polymer specialist’s net cash position failed to surpass its £85m target threshold. The group’s stock build in anticipation of Brexit, and a £15m two-year investment in ‘debottlenecking’ with the aim of boosting capacity, pushed the group’s operating cash conversion down to 87 per cent from a prior year level of 107 per cent.
A second-half deterioration in Victrex’s automotive and electronics division, as well as a slowdown in its ‘Value Added Resellers’ (VAR) segment (which mixes various industrials and component manufacturing work), drove down sales volumes by 15 per cent. Chief executive Jakob Sigurdsson said the company was operating on the assumption that automotive and electronics weakness would persist into its 2020 first half, adding that these markets are stabilising. “We will retain some caution on these markets at this early stage,” he said.
Victrex fared better in its aerospace, energy and medical segments, with highlights including its first commercial order for aerospace composite parts and the signing of new long-term partnership with Airbus (FRA:AIR).
Bloomberg consensus figures are for full-year 2020 adjusted earnings per share of 109p, rising to 120p in 2021.
| VICTREX (VCT) | ||||
| ORD PRICE: | 2,328p | MARKET VALUE: | £2.01bn | |
| TOUCH: | 2,328-2,332p | 12-MONTH HIGH: | 2,544p | LOW: 1,815p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 534p* | NET CASH: | £72.8m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 264 | 106 | 98.1 | 46.82 |
| 2016 | 252 | 100 | 96.8 | 46.82 |
| 2017 | 290 | 111 | 116 | 53.80 |
| 2018 | 326 | 128 | 129 | 59.56 |
| 2019 | 294 | 105 | 107.2 | 46.1 |
| % change | -10 | -18 | -17 | -23 |
| Ex-div: | 30 Jan | |||
| Payment: | 21 Feb | |||
| *Includes intangible assets of £27.4m, or 317p a share | ||||
