Last checked at 7 Apr 2009 07:00
Tuesday 7 April 2009
Victrex plc
Half Year Trading Update
Victrex will announce its results for the six months ended 31 March 2009 on Tuesday 19 May 2009. Today, the Company announces its regular half year trading update.
At our AGM in February, we announced the strategic reorganisation of our business into two divisions: Invibio®, our biomaterials business and Victrex PEEK, now known as Victrex Polymer Solutions. Our half year results will reflect this divisional split.
Overall, we have continued to see strong progress in Invibio, offset by lower volumes in Victrex Polymer Solutions as demand in our major industrial markets has remained weak.
Invibio
Invibio had an excellent first half with revenue of approximately £17.6m, an increase of 50% over the previous first half (£11.7m). We expect second half revenue to be maintained at a broadly similar level to the strong first half.
Group sales volume
At approximately 774 tonnes, overall first half sales volume was 40% down on the previous first half as a result of the expected reduction in demand for Victrex PEEK in our major end user industrial markets, particularly automotive and electronics. Across regions, the United States held up better than Europe and the Asia-Pacific markets.
While February sales volume (at 109 tonnes) was similar to levels experienced in recent months, March (at approximately 90 tonnes) saw evidence of renewed destocking as some customers reduced inventories at the quarter end.
While it is still too early to make predictions about second half sales volume, current month order levels are running at a higher level than at the same time in March.
For planning purposes, we have assumed that volumes will remain at similar levels to the second quarter and have taken actions to streamline Victrex Polymer Solutions while continuing to invest in new applications and growth areas. We have reduced polymer production levels and are also temporarily suspending BDF monomer production for a period of up to six months.
Average selling price and currency impact
As a result of the reduction in sales volume, we have had to buy out surplus forward exchange contracts that were entered into (prior to the downturn) in compliance with our currency hedging policy. Although this has a negative impact on effective sterling average selling price, we are also experiencing a positive impact largely driven by the sales mix effect between Invibio and Victrex Polymer Solutions. Accordingly, we still expect to see a significant increase in Group effective sterling average selling price compared to 2008.
Outlook
Our Invibio Biomaterials Solutions division continues to show strong sales growth and development potential. While the Victrex Polymer Solutions division is affected by the global slowdown in our major markets, we remain focussed on developing the underlying growth potential which will be realised when the trading environment improves.
-Ends-
For further information please contact:
| Victrex plc Michael Peacock, Finance Director | 01253 897700 |
| Hogarth Partnership Limited Nick Denton / Barnaby Fry | 0207 357 9477 |
Victrex plc is an innovative, world leader in high performance materials through the manufacture of VICTREX® PEEK™ polymer, a high performance, easy to process thermoplastic.
VICTREX PEEK has a unique combination of chemical, wear, electrical, hydrolysis and temperature resistance, as well as excellent dimensional, mechanical and chemical stability combined with inherent purity and low flammability.
End users specify VICTREX PEEK to reduce systems costs, improve part performance, exploit greater design freedom and create a differentiated application. VICTREX PEEK is used across a broad range of applications in diverse markets including transport, industrial, electronics and medical.
Invibio®, Victrex's biomaterials business, provides specialised solutions for medical device manufacturers.
The Group's headquarters are in the UK where its manufacturing facilities are based. This is complemented by a global network of sales, distribution and technical centres that serve more than 30 countries worldwide.