Victrex PLC on Monday reported a drop in interim profit despite a strong sales performance, supported by its Electronics, Energy & Industrial and Value Added Resellers units.
Shares in Victrex were down 3.7% at 1,731.00 pence each on Monday morning in London.
In the six months to March 31, pretax profit slipped 6.4% to £43.6 million from £46.6 million in the same period a year prior. The Lancashire-based speciality chemicals firm blamed the drop on a £4.6 million exceptional item cost relating to a one-off software implementation expense.
‘The company has commenced a multi-year implementation of a new cloud-based ERP system. The company forecasts to spend approximately £17 million on the implementation, which will deliver benefits to both customer interactions and internal business processes,’ the FTSE 250 company explained.
Revenue was up 6.1% to £160.1 million from £150.9 million. Victrex said this reflects a strong performance in most industrial end markets, as well as a better performance from its Medical arm.
Medical revenue grew 12% in the period to £27.8million from £24.9 million a year prior.
Further, group sales volume increased 8.5% to 2,264 tonnes from 2,087 tonnes, primarily driven by Electronics, Energy & Industrial and Value Added Resellers.
Victrex proposed an interim dividend of 13.42 per share, flat on a year before.
Looking ahead, the company anticipates continuing volume growth for the remainder of 2022. It expects its gross margin in the second half to be slightly lower than in the first one, largely due to currency movements. Nonetheless, it noted that its mitigation plans for recovering additional inflation are making good progress.
Chief Executive Jakob Sigurdsson said: ‘This is a strong first half, with further improvement across all end-markets, good progress in our Medical business as elective surgeries return in greater numbers and improved average selling prices compared to the second half of 2021.
‘On a medium to long term basis, Victrex remains well placed, with a broad range of growth opportunities, a strong environmental, social, and governance agenda and a highly cash-generative business model.’
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