Victrex reports a 29% decline in annual profit due to COVID-19 disruptions
- Victrex reports a 29% decline in annual profit due to COVID-19 disruptions.
- The polymer producer slashes dividend by 23% to 46.14 pence per share.
- Victrex expressed confidence that it started fiscal 2021 on a positive note.
Victrex plc (LON: VCT) said on Wednesday that its full-year profit came in 29% lower than last year due to the ongoing Coronavirus pandemic that weighed on its business in recent months. The company, however, expressed confidence that sales in its automotive, medical, and electronics segments had bottomed out, and recovery was in the offing.
Victrex opened about 2% up in the stock market on Wednesday but lost the entire intraday gain in the next hour. On a year-to-date basis, its shares are now more than 15% down despite a close to 20% recovery since March.
Victrex slashes dividend by 23% to 46.14 pence per share
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Victrex resorted to slashing its dividend on Wednesday to 46.14 pence per share that represents a 23% decline from last year in a bid to sustain its financial position that it said was resilient enough for strong long-term growth.
The polymer producer reported £266 million of revenue in the year that concluded in September that translates to a 10% annualised decline. Volumes, it added, slipped 7% in the recent year to 3,492 tonnes.
The FTSE 250 listed company said that its underlying pre-tax profit contracted to £75.5 million in fiscal 2020 versus the year-ago figure of a much higher £106.2 million. Its underlying pre-tax profit also missed market expectations.
Reported pre-tax profit, on the other hand, printed at £63.5 million or 39% lower on a year over year basis. The decline, Victrex added, was due to severance costs attributed to slashing 100 jobs in recent months.
Victrex says it started fiscal 2021 on a positive note
On the back of faster than expected recovery in several of its end-markets, Victrex expressed confidence that it had started fiscal 2021 on a positive note. But some markets, including energy and aerospace, it said, were still under pressure leading to subdued overall performance.
The Lancashire-based company also warned that profit margins were likely to be weighed in the upcoming months due to slower production than sales and Brexit-related uncertainties. At the time of writing, Victrex is valued at £1.82 billion and has a price to earnings ratio of 20.38.
In separate news from the United Kingdom, Balfour Beatty plc said its annual financial results were likely to match board’s expectations. The British multinational infrastructure group also expressed plans of launching a share buyback. Balfour’s chairman is scheduled to exit the role next year in May.