From Reuters6 Oct 2011 19:32
Shares in Victrex gain 3 percent after the manufacturer of high performance polymers updates the market on trading and announces the appointment of a new finance director, with Peel Hunt repeating its "buy" rating on the stock.
Victrex says initial trading for October shows it is performing well, and that it remains in an "excellent" financial position with a healthy balance sheet and strong cash generation.
Separately, the firm says Peter Bream is stepping down as group finance director, to be replaced by Steve Barrow, who has been with the group for 17 years and is currently FD of the Victrex Polymer Solutions (VPS) division, that focuses on the transport, industrial and electronics markets.
"VPS was highly cyclical through the 2009 downturn and visibility is extremely limited. However, Victrex was one of the major destocking victims in 2008-09. We do not expect a repeat of the destocking phenomenon in 2009," Peel Hunt says.
"Despite the high operational gearing, the 45 percent group EBITA margin provides substantial resilience to earnings," the broker says.
It says crucially, the Invibio division -- that focuses on providing specialist solutions for medical device manufacturers and is assumed to have more resilience than the Industrial volumes -- has doubled since 2008 and now represents over 20 percent of sales.
Peel Hunt lowers its target price, to 1,500 pence from 1,650 pence, to reflect slower growth in full-year 2012.