(Alliance News) - Victrex PLC said Tuesday that overall trading at the end of its financial year remained subdued, despite some of its end markets improving slightly from tough levels.
For the fourth quarter to the end of September, the FTSE 250-listed polymers manufacturer's sales volumes was down 26% to 695 tonnes from 940 tonnes the year before, leading to revenue declining by 27% to GBP55.7 million from GBP76.2 million, in line with expectations.
For the year as a whole, Victrex's sales volumes was down 7% at 3,492 tonnes from 3,751 tonnes. Revenue was down 10% at GBP266 million from GBP294 million.
Victrex noted that although its top-line performance for the year was ahead of expectations, its high-fixed cost base and absorption of fixed costs due to lower output will impact margins.
Although a cost savings plan has been unveiled to mitigate this effect, the impact of lower production on sales is expected to continue throughout the group's current financial year as volumes remain low due to end market demand and the unwinding of inventory after Brexit, Victrex said.
In addition, the capital requirements for Victrex's UK debottlenecking and Chinese subsidiary is expected to be in excess of GBP50 million in its current financial year.
These requirements will be covered by the group's cash generation, and as a result, Victrex anticipates reinstating a dividend for financial 2020.
Victrex will publish its annual results on December 9.
Shares in Victrex were down 2.7% at 1,870.0 pence on Tuesday in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
Victrex (VCT)