Victrex saw sales volumes slow down in the second half of 2012

On Tuesday morning high performance polymer manufacturer Victrex announced that annual group profit before tax increased to 94.5m pounds, marginally above year ago levels, much the same as its basic earnings per share of 85.7p.

That as sales volumes at its main Victrex Polymer Solutions (VPS) business progressed at a lower run-rate than in the record second half of last financial year. Thus, group revenue rose by just 2% to £219.8m for the year ending on September 30th 2012.

Amongst the company's products are the polymer-based pipe system for the cargo drainage system on the Airbus A350 XWB line of passenger jets. The company's other main product line, Invibio, provides access to highly specialized biocompatible (can be used within the human body) materials and services for medical device manufacturers.

Full year gross margin remained in line with the company's own expectations, at 66.3%, but came in below last year's level of 67.8%.

Earnings benefitted nonetheless from an improvement in the effective tax rate to 23.9%, predominantly reflecting the reduction in the UK corporation tax rate.

The company had cash of £83.9m and no debt at the end of the financial year.

Chairman confident on outlookCommenting on the results Chairman Anita Frew said: "(...) Sales volume in our VPS business is showing good growth relative to the comparative period last year, albeit at a lower run rate than the record second half of last financial year. Our Invibio business has had a steady start to the year despite the continuing challenges in the US medical device market.

"Whilst it is early in the financial year, and a number of macro uncertainties remain, we are encouraged by the potential for growth in both VPS, driven by new application development, and Invibio, through innovation in the spine market and further progress in our developing markets (...)," she added.

The company's Board of Directors has recommended an increase in the full year dividend of 15% to 37.4p (2011: 32.5p), resulting in a final dividend of 28.4p (2011: 24.5p) per ordinary share.

The dividend cover will thus be reduced to 2.3 times, from last year's level of 2.6 times.

At 09:24, the share price of Victrex was down 3.36% to 1,581p, after yesterday hitting an intraday 52 week high above 1,650p.

MF