Portfolio

Victrex H1 trading in line, too early to provide FY guidance

By Michele Maatouk

Date: Tuesday 07 Apr 2020

Victrex H1 trading in line, too early to provide FY guidance

(Sharecast News) - Victrex said on Tuesday that trading in the first has been in line with expectations but that it is too early to provide guidance for the rest of the year amid the coronavirus pandemic.
The company, which supplies high performance polymer solutions, said it saw solid volume growth, including a strong finish in March. There was good growth in automotive and medical, with a stable performance in aerospace, electronics and value-added resellers, offset by weakness in the energy segment.

The group had inventory of around ?100m for the first half, with high sales stock across the US, Europe and Asia. In the UK, the raw material inventory is "appropriate", it said, and the supply chain is functioning well.

Victrex noted that it is part of multiple supply chains, many of which are supporting critical applications, for example in the medical segment. The company said it has a strong balance sheet, with facilities of ?40m, comprising a committed and undrawn revolving credit facility of ?20m and a ?20m accordion facility.

"Whilst Victrex benefits from a net cash position, we are acutely aware of the near-term uncertainty at a macro and end-market level, and have prudently implemented appropriate measures to reduce cost and conserve cash, whilst maintaining strong service levels for customers," it said.

Capital expenditure for the UK debottlenecking programme has now been deferred to FY 2021, while other capital programmes have been limited to essential-only expenditure.

In addition to the companies it already serves, Victrex is now supplying materials for ventilators or related equipment to a number of global companies.

"Although trading has remained in line with expectations year-to-date and the third quarter has shown early signs of a solid start, including some normal demand returning across parts of Asia, the macro-economic and end-market outlook over the coming months is very uncertain, particularly for Europe and the US," it said.

"It is therefore too early to provide guidance for the remainder of the current financial year. We will continue to produce for essential business, monitoring appropriate guidelines and assessing other cash conservation measures as required."

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