Victrex FY pre-tax profits fall as margins contract

6th Dec 2022 08:18

(Sharecast News) - Chemicals group Victrex said on Tuesday that reported pre-tax profits had fallen in the twelve months ended 30 September despite reporting increased revenues for the period.

Victrex said revenue rose 11% to £341.0m but stated that reported pre-tax profits had slid 5% to £87.7m as exceptional items of £7.9m stemming from the first year of its enterprise resource planning software investment weighed on the bottom line.

Gross margins slumped 280 basis points to 51.2% but sales volumes increased 8% to 4,727 tonnes.

The FTSE 250-listed group, which proposed a final dividend of 46.14p, unchanged from the previous year, also said it had seen signs that VAR volumes were "edging down slightly" to more normalised levels. Victrex said this now meant improving on last year's "record group volume" was "likely to be challenging". However, the group also stated it had experienced a "steady start" to the year, and that it will focus on "modest" profit and revenue growth.

Chief executive Jakob Sigurdsson said: "This was a record year for revenue and volume. We delivered good progress across the majority of our end-markets, new application growth and improved pricing, as we continue to recover cost inflation. It was also pleasing to see double-digit growth in medical. We are prioritising investment in this business, with the intention of medical contributing over one-third of group revenues in the longer term."

As of 0830 GMT, Victrex shares were down 0.28% at 1,777.0p.

Reporting by Iain Gilbert at Sharecast.com