Victrex plc (LON:VCT) is an innovative world leader in high performance polymer solutions, delivering sustainable products which support CO2 reduction and bring environmental and societal benefit in multiple end-markets. Today’s trading update covers the period ending 31 May 2023.
Year-to-date (YTD) Group volume & revenue
At the Group’s interim results we signalled that, in line with the wider Chemical sector, ongoing macro-economic weakness and industrial customer destocking were impacting performance in several end markets. During the first half, Group volumes declined by 14%.
Whilst Victrex remains ready to benefit from a macro-economic recovery, latest indicators suggest these current headwinds will now continue over the summer and at least until the end of FY 2023 in September.
Despite good progress in Medical, ongoing industrial headwinds mean YTD Group volumes are now tracking in excess of 20% down, compared to the record prior year. YTD Group revenue is tracking down by a mid-single digit percentage rate. If current run-rates continue, full year revenue would be down between 6%-10%.
For Q3 as a whole, we anticipate volumes will be approximately 800 tonnes (Q3 2022: 1,323 tonnes).
Outlook
In our Outlook at the interim results stage, we signalled that delivering full-year adjusted (pre-exceptional) profit before tax (PBT) in line with expectations assumed a step up in demand during the latter part of the second half, driven by macro-economic conditions.
Whilst we are seeing progress on gross margin, driven by pricing, sales mix, currency and easing energy costs, Group adjusted PBT to 31 May 2023 was approximately £53m. With no step up in demand going into the final quarter currently visible, and the resulting lower industrial revenue expectations, our full year adjusted PBT is now expected to be between £80m-£85m.
Victrex plc will report its Q3 Interim Management Statement on Thursday 6 July 2023.
