Victrex expecting 'range' of full-year outcomes amid macro uncertainty

(Sharecast News) - Victrex reported a 16% increase in sales volumes for the six months ended 31 March, on Monday, reaching 2,018 tonnes, although underlying profits declined amid what the company said was macroeconomic uncertainty. The FTSE 250 performance polymer specialist said it was the first time it had surpassed the 2,000-tonne mark in a half-year since late 2022.

Group revenue rose 5% year-on-year to £145.9m, or 8% on a constant currency basis, driven by strong growth in value-added resellers, electronics, and energy and industrial segments.

However, average selling prices fell 10% due to a weaker sales mix and foreign exchange effects.

Underlying profit before tax declined 17% to £23.2m, though it remained flat at constant currency, with reported profit before tax rising to £17.2 million due to a lower exceptional cost base.

Gross margins fell 390 basis points to 44.1%, as operational improvements were offset by currency headwinds, a slower-than-expected ramp-up in China, and adverse product mix.

Despite the pressures, cash generation strengthened, with operating cash conversion improving to 128% and net debt falling to £40.7m.

The company reiterated its interim dividend at 13.42p per share and announced a milestone Petrobras contract for its Magma composite pipe programme.

Victrex said it remained confident in its full-year outlook, upgrading its volume guidance while continuing to drive self-help initiatives and cost controls under its Project Vista transformation plan.

"Macroeconomic uncertainty is likely to continue for the remainder of the 2025 financial year," said chief executive officer Jakob Sigurdsson.

"Whilst the majority of Victrex's product portfolio is currently exempt from incremental US tariffs, we are mindful of the potential impact on global sales demand.

"Volume momentum remains positive and we are slightly upgrading our volume guidance to high-single digit volume growth for the full year, reflecting the volume strength seen in the first half."

Sigurdsson said the company was targeting a "substantial improvement" in second half profit before tax compared to the first.

"This is supported by the typical second-half weighting of profits, as well as the current volume momentum driven by Sustainable Solutions.

"In Medical, we expect continued growth in non-Spine, and we are monitoring closely for signs of improvement in Spine.

"Operational improvement in our China manufacturing facility is progressing, however, the full year profit headwind will be higher than previous guidance."

Jakob Sigurdsson said those factors, and other previously-guided headwinds including currency, would constrain profit before tax growth for the second half compared to the same period in 2024, though the firm expected that to ease into the next financial year.

"Given macro-uncertainty, together with the effects noted, we have a range of outcomes for full year profit.

For the second half, our target is to deliver profit before tax similar to 2024, driving some growth in constant currency on a full year basis.

"Victrex has a strong and diversified core business, supported by improvement actions, well-invested assets, increasing mega-programme commercialisation, and the opportunity for continued cash flow improvement."

At 0901 BST, shares in Victrex were down 6.52% at 846p.

Reporting by Josh White for Sharecast.com.