Victrex launches cost-cutting drive as profits slump

(Sharecast News) - Polymers group Victrex has launched a "profit improvement plan" targeting £10m of savings, after underlying earnings dropped 21% over the 12 months to 30 September. Underlying pre-tax profit totalled £46.4m, down from £59.1m the year before, due to currency movements, the cost of setting up a new plant in China and an adverse sales mix.

If FX was constant, underlying pre-tax profit would have fallen 10% over last year. Meanwhile, startup costs in China reduced profits by £8m, compared to £4m the year before.

The company, which makes components for industries such as aerospace, automotive, electronics, energy and medical, said group revenues rose just 1% to £292.7m despite volumes rising 12% to 4,164 tonnes.

Victrex declared a final dividend of 46.14p per share, in line with last year, keeping the full-year payout flat at 59.56p.

A profit improvement plan is now underway, the full-year benefits of which should be seen by FY2027, building on existing self-help and go-to-market improvements.

Meanwhile, Victrex said it undertaking a broader review of operations this year, "targeting further commercial, cost and operating efficiencies, driving business simplification".

"Although FY 2026 will be a transitional year, our foundations are strong, with a differentiated product portfolio across key end markets, well-invested assets and an addressable market approximately five times current levels, offering significant long-term opportunities for VICTREX PEEK," said chief executive Jakob Sigurdsson.

"We will create a simpler and even more focused growth business, improving cost to serve and driving significant value creation for all stakeholders."