Victrex Plc reports 22% drop in Q1 revenue amid weak end-markets

LONDON, UK: Victrex Plc, a world leader in high performance polymer solutions, announced a 22% decline in Q1 revenue due to challenging conditions in several end-markets, such as Electronics, Energy & Industrial and Value Added Resellers (VAR).

The company, which delivers sustainable products that enable environmental and societal benefit in multiple sectors, said its Q1 revenue fell to £61.2m from £78.8m in the same period last year. Its Q1 volume also decreased by 21% to 751 tonnes.

Victrex said it saw a slow start to FY 2024, following the weakness seen in H2 2023 across the wider Chemical sector. It noted that Q1 is typically a seasonally lower period, but this year it remained difficult compared to a good performance in the prior year.

However, the company also reported some positive signs in its Sustainable Solutions area, where it saw further progress in Aerospace and Automotive. It also said it saw improvement in January, the start of Q2, though visibility remains limited.

In its Medical segment, Victrex said it had a softer start in Q1, but Q2 has begun positively. It also highlighted its Medical mega-programmes, such as Trauma plates and PEEK Knee, which are showing commercial and clinical success.

Victrex said it retains a cash generative business model, supporting growth investment and shareholder returns. It also said it is managing its cash and working capital carefully, as well as reducing its operating overheads and implementing cost actions in response to the challenging environment.

Jakob Sigurdsson, Chief Executive of Victrex, said: “After a soft start to the year, in line with the wider Chemical sector, the Group is seeing signs of monthly run-rate improvement, on a sequential basis (Q2 vs Q1).

“January trading was solid and ended slightly ahead of the prior year comparative. However, we are mindful of the soft start and limited visibility of an uptick in several end-markets. Together with the increased year-on-year impact in our income statement from reduced asset utilisation, this means first half revenue and PBT is expected to be lower than the prior year period. The Group previously communicated that progress in revenue and PBT for FY 2024 was reliant on a macro-economic recovery in our second half. The opportunity to deliver year-on-year progress remains. However, a continuation of the current macro-economic conditions makes achieving a profit growth outcome for the year more challenging and requires a further step up in run rates for the remainder of FY 2024. We continue to tightly manage controllable expenses, to support our performance.

“Victrex’s long-term investment proposition remains strong. We have a robust and diversified core business, increasing commercialisation in our mega-programmes, well invested assets, and the opportunity for cashflow improvement. Overall, we are well-placed for a macro-economic recovery and for the medium to longer term.”

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