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Currency boost for Victrex H1; warns on Brexit customs deal
Interim pre-tax profits at speciality chemicals company Victrex were boosted by the weak pound as they rose 26% to £63.3m, although tailwinds were expected to "significantly reduce" in the second half and a headwind was forecast for 2019.
The company also warned that a failure to reach agreement on the UK's post-Brexit customs arrangements posed a potential risk to it being able to import raw materials or export finished goods "which could curtail sales if regional inventory levels were depleted".
Group sales volumes rose 21% to 2,256 tonnes, while revenues rose 27% to £166.6m. The dividend was increased by 10% to 13.42p a share.
Victrex said currency remained a positive for the full year, with estimates suggesting a boost of at least £10mto profits.
"As a UK based exporter with a significant global revenue exposure, Victrex hedges currency up to 12 months in advance. With sterling continuing to re-rate over recent months against some of our selling currencies, the implied headwind to profit - based on current rates - for full year 2019 is now expected to be over £10m, reflecting approximately 35% of hedges in place," the company said.
On Brexit, Victrex said said it had a team in place "to consider various contingencies, through the transition period and beyond".
"Activities and contingencies include focusing on additional global warehousing to hold stock and the pursuit of Authorised Economic Operator status - to "fast track" goods through Customs. Victrex has trading companies globally, including Europe, and remains focused on providing ongoing continuity to our customers."