Victrex plc – Preliminary Results 2019
'Full year in-line with expectations; cyclical weakness offsetting growth markets'
Victrex plc, an innovative world leader in high performance polymer solutions, today announces its preliminary results for the 12 months ended 30 September 2019
Highlights:
Good growth in Aerospace, Energy & Medical offset by Auto & Electronics cyclicality
- FY19 Group sales volumes down 15% impacted by Auto, Electronics & Value Added Resellers
- Run rate stabilising in Q4, with sequential improvement
- Good performance in Medical, revenue +4% with strong growth in Asia
- Underlying PBT down 17%
Further progress to commercialise 'mega-programme' pipeline
- First commercial order for Aerospace composite parts, new US facility operational
- New Aerospace Structures mega-programme (long-term development alliance with Airbus)
- >10 development programmes for PEEK Gears
- Double-digit revenue growth in next generation PEEK-OPTIMA™ HA Enhanced Spine product
- PEEK Knee clinical trial underway
Cash generation impacted by Brexit & debottlenecking inventory build
- Operating cash conversion1 of 87%, impacted by stock build; available cash1 of £72.8m
- Final dividend held at 46.14p/share
- Investments to support 3D printing and moulding technology
- Two-year £15m debottlenecking investment underway, unlocking incremental capacity
Jakob Sigurdsson, Chief Executive of Victrex, said: “Our full year performance was in line with expectations, with good growth in Aerospace, Energy and Medical being offset by a deterioration during the second half in Automotive, Electronics and Value Added Resellers (VAR), although these end markets are gradually stabilising.
“Pleasingly, we saw further progress in our new product pipeline and mega-programmes. We secured our first commercial order for Aerospace composite parts, we signed a new long-term development alliance with Airbus to support larger Primary and Secondary structures, and we saw strong growth in our next generation PEEK-OPTIMA™ HA Enhanced product for the Spine market. In PEEK Gears, our value proposition is strong and we have multiple development programmes underway, as well as gears on the road.
“Looking forward, Automotive and Electronics are showing signs of stability, although we will retain some caution on these markets at this early stage, with an initial assumption that current trends will continue through the first half year. Our cost-effective debottlenecking project is underway, enabling Victrex to gain significant incremental capacity in support of our medium-term growth programmes, although an extended shutdown will mean some under recovered overheads. On a full year basis, currency offers a modest tailwind although this will be offset to a large degree by some limited incremental operating investment, cost inflation and our employee bonus scheme. Overall, we remain focused on making year-on-year progress and our Polymer & Parts strategy keeps us well placed to deliver our medium to long term growth opportunities.”