Final Results

Victrex PLC
04 December 2002

4th December 2002


                                  Victrex plc

          Results announcement for the year ended 30th September 2002


•     Turnover down 18% to £59.1m (2001: £72.1m)

•     Gross margin up 5% points to 54.9% (2001: 49.9%)

•     Profit before tax down 15% to £19.0m (2001: £22.3m)

•     Final dividend of 4.9p making a total of 7.0p for the year, an increase of 
      4.5% (2001: 6.7p)

•     Development pipeline at record level of 2,316 tonnes (2001: 1,982 tonnes)



Chairman Peter Warry commented:


'I am encouraged to report that, in spite of challenging global economic
conditions, Victrex has demonstrated the resilience of its business and made
further significant progress in developing new applications and business areas.



At the time of the year end trading update on 3rd October, we were encouraged
that the recovery in sales volume experienced in the second quarter had been
sustained throughout the second half.  We have seen some further increase in
demand for the first two months of the new financial year, but in the uncertain
economic climate, it remains difficult to predict the outcome for the year as a
whole.  However this solid start reinforces our confidence in the business.'





Enquiries


Victrex plc

David Hummel, Chief Executive           0207 357 9477        (4th December 2002)
Michael Peacock, Finance Director       01253 897700         (thereafter)


Hogarth Partnership Limited

Nick Denton / Tom Leatherbarrow         0207 357 9477



                                  Victrex plc

      Preliminary results statement for the year ended 30th September 2002



I am encouraged to report that, in spite of challenging global economic
conditions, Victrex has demonstrated the resilience of its business and made
further significant progress in developing new applications and business areas.



RESULTS



Turnover for the year was £59.1m (2001: £72.1m).  Gross profit was £32.5m (2001:
£36.0m) representing 54.9% of turnover (2001: 49.9%). This margin improvement
was principally due to favourable currency movements, an increased contribution
from InvibioTM (our medical implants materials business) and a shift in sales
mix to higher margin grades.



Increased expenditure was incurred on product research, development and
marketing, but considerably reduced staff bonuses meant that overall sales,
marketing and administrative expenses were reduced to £13.0m (2001: £13.3m).
Earnings before interest, tax, depreciation and amortisation amounted to £23.3m
(2001: £26.4m) representing 39.4% of turnover (2001: 36.6%).  Exchange rates
compared with the previous year have had a favourable impact of £2.1m on profit
largely due to a stronger Dollar.



Net interest costs held steady at £0.5m (2001: £0.5m) resulting in net interest
cover of 42 times. Profit before tax was £19.0m (2001: £22.3m) down 14.8% and
basic earnings per share were 16.2p (2001: 19.4p) down 16.5%. The effective tax
rate was 32.5% (2001: 31.2%) which reflects a full deferred tax charge as a
result of the adoption of FRS 19.  Previously, the Group was only required to
recognise deferred tax to the extent that there was a reasonable probability
that an actual liability would crystallise.  The results for the previous year
have been restated accordingly.



CASH FLOW



Cash flow from operating activities decreased to £17.1m (2001: £27.8m) primarily
as a result of reduced trading and the planned stock rebuild in the first half
of the year following the supply constraint of the previous year.



Capital expenditure payments increased to £8.8m (2001: £4.8m) as a result of the
supply chain capacity uprate. Taxation paid was £5.2m (2001: £5.8m) due to
reduced profits offset by accelerated payments arising from full implementation
of the UK Corporation Tax quarterly payments on account system.



At the year end, net debt stood at £1.7m (2001: net cash £1.0m), resulting in
gearing of 3%. The Group has committed bank facilities of £40m which expire in
December 2004, of which £32m were undrawn at the year end.



DIVIDEND



In recognition of our confidence in the strength and potential of the business,
the Directors have recommended a final dividend of 4.9p per ordinary share,
making a total of 7.0p per ordinary share for the year, an increase of 4.5% over
last year. This represents dividend cover of 2.3 times.



SALES



Total sales volume amounted to 1,205 tonnes (2001: 1,603 tonnes) with second
half volume of 648 tonnes (2001: 703 tonnes) compared with 557 tonnes (2001: 900
tonnes) for the first half.  Volume was very weak in the first quarter of the
year but picked up in the second quarter to levels that were sustained
throughout the second half.



Of our principal markets, transport sales volume was 413 tonnes, a reduction of
24% on the previous year.  Second half volume was 224 tonnes, up from 189 tonnes
in the first half, primarily because of continued increased demand in our
European automotive business which had shown a strong recovery at the end of the
first quarter.  Our US automotive business also saw demand recover after a weak
first half.



Industrial sales volume was down 33% on 2001 to 340 tonnes.  Sales volume in the
second half was 194 tonnes compared with 146 tonnes in the first half following
a strong recovery in the US and Europe in the second quarter.  The area showing
strongest recovery was down-hole oil production whereas demand from industrial
machinery and chemical processing applications was flat.



Electronics volume at 282 tonnes showed a 22% fall on 2001 largely because of an
exceptionally strong first half in the previous year.  At 138 tonnes, first half
sales volume held up well compared to the second half of the previous year and
increased marginally in the second half to 144 tonnes.



Geographically, Europe, with sales volume of 650 tonnes (2001: 765 tonnes),
remained our largest market with transport applications continuing to represent
the biggest market segment in the region.  Second half sales recovered to levels
close to those seen in the second half of the previous year.



United States volume amounted to 411 tonnes (2001: 667 tonnes) principally in
the industrial and transport segments.  This region was the hardest hit in the
first half but recovered well in the second half, albeit not yet to the levels
seen in the second half of 2001.



Asia-Pacific volumes were also down on the previous year at 144 tonnes (2001:
171 tonnes). However, this performance still maintains the step change in
business activity experienced in 2000 with second half sales volume marginally
ahead of the same period last year.



BUSINESS DEVELOPMENT



It is particularly important, in the current phase of the economic cycle, to
continue to invest in and focus on building the business through commercialising
new applications and maximising our market potential.



The product development pipeline measures the future potential of all of the
specific new applications we are working on with end users.  It represents our
best estimate of the mature annualised volume ('MAV') that could be generated if
all of these applications were commercially developed.  We have continued to
build the development pipeline through the introduction of new potential
applications and have increased the rate at which we commercialise new
applications.



At the year end, the pipeline contained 1,488 developments (2001: 1,039) with an
estimated MAV of 2,316 tonnes (2001: 1,982 tonnes).  During the year we
commercialised 249 new applications (2001: 154) with an MAV of 210 tonnes (2001:
175 tonnes).



InvibioTM continues to perform ahead of expectations and entered into eighteen
additional long-term agreements with implantable medical device manufacturers
during the year. Markets covered by these new agreements include orthopaedic,
cardiovascular and arthroscopy.  A number of medical devices incorporating
PEEK-OPTIMA(R) have been cleared by regulatory bodies and have been
commercialised in the US and Europe.



Technical development of the Victrex proprietary ionomer under the Victrex/
Ballard Ionomer Alliance is progressing well.



SUPPLY CHAIN



The supply chain can currently support 2,300 tonnes per annum of Victrex(R)
PEEKTM sales.  The further capacity uprate to 2,800 tonnes which we started in
October 2001 remains on track for completion by October 2003. Capital
expenditure on this project amounted to £8m in the year with £5m due in 2003.
This additional investment is being accommodated within existing borrowing
facilities.



OUTLOOK



At the time of the year end trading update on 3rd October, we were encouraged
that the recovery in sales volume experienced in the second quarter had been
sustained throughout the second half.  We have seen some further increase in
demand for the first two months of the new financial year, but in the uncertain
economic climate, it remains difficult to predict the outcome for the year as a
whole.  However this solid start reinforces our confidence in the business.





Peter Warry
Chairman







CONSOLIDATED PROFIT AND LOSS ACCOUNT

                                                                                            Restated
                                                                                   2002         2001
For the year ended 30 September                                       Note         £000         £000

Turnover: Group and share of Japanese joint venture                              63,268       78,252
Less: share of Japanese joint venture                                           (4,181)      (6,172)

Turnover                                                                 2       59,087       72,080
Cost of sales                                                                  (26,634)     (36,104)

Gross profit                                                                     32,453       35,976
Sales, marketing and administrative expenses                                   (13,011)     (13,301)

Group operating profit                                                           19,442       22,675
Share of operating profit in Japanese joint venture                                  70          211

Total operating profit                                                           19,512       22,886
Interest receivable                                                                  75          141
Interest payable                                                                  (538)        (686)

Profit on ordinary activities before taxation                                    19,049       22,341
Taxation on profit on ordinary activities                                       (6,191)      (6,978)

Profit on ordinary activities after taxation                                     12,858       15,363
Equity dividends paid and proposed                                       7      (5,539)      (5,294)
Retained profit for the financial year                                            7,319       10,069

The Company                                                                       4,075        4,661
Group undertakings and joint ventures                                             3,244        5,408
                                                                                  7,319       10,069

Earnings per ordinary share - Basic                                      3        16.2p        19.4p
                                        - Diluted                        3        16.0p        19.2p


The prior period has been restated to reflect the adoption of FRS 19 - Deferred
taxation (see note 1).

The Group's turnover and operating profit arise from continuing operations in
both the current and preceding year.

There were no material differences between reported profits and historical cost
profits on ordinary activities before taxation in either of the above financial
years.

CONSOLIDATED BALANCE SHEET


                                                                                           Restated
                                                                                  2002         2001
As at 30 September                                                                £000         £000

Fixed assets
Intangible assets                                                                9,221       10,493
Tangible assets                                                                 39,919       33,261
Investments                                                                      1,053          749
Investment in Japanese joint     share of gross assets                           1,483        1,668
venture :
                                 share of gross liabilities                    (1,826)      (1,972)
                                                                                49,850       44,199
Current assets
Stocks                                                                          13,946        7,893
Debtors                                                                          8,167       10,825
Cash at bank and in hand                                                         6,341        1,038
                                                                                28,454       19,756
Creditors: amounts falling due within one year                                (14,257)     (16,511)

Net current assets                                                              14,197        3,245

Total assets less current liabilities                                           64,047       47,444
Creditors: amounts falling due after more than one year                        (7,912)            -
Provisions for liabilities and charges                                         (4,378)      (3,178)

Net assets                                                                      51,757       44,266


Capital and reserves
Called up share capital                                                            796          795
Share premium account                                                           11,885       11,605
Profit and loss account                                                         39,076       31,866

Equity shareholders' funds                                                      51,757       44,266


The prior period has been restated to reflect the adoption of FRS 19 - Deferred
taxation (see note 1).

CONSOLIDATED CASH FLOW STATEMENT


                                                                                      2002        2001
For the year ended 30 September                                           Note        £000        £000

Net cash inflow from operating activities                                    4      17,143      27,819

Return on investments and servicing of finance
Interest received                                                                       75         141
Interest paid                                                                        (500)     (1,005)

Net cash outflow from returns on investment and servicing of finance                 (425)       (864)

Taxation - Taxation paid                                                           (5,202)     (5,848)

Net cash outflow from capital expenditure - Purchase of tangible fixed             (8,811)     (4,750)
assets

Equity dividends paid                                                              (5,379)     (4,957)

Cash (outflow)/inflow before financing                                             (2,674)      11,400

Financing
Issue of ordinary shares exercised under option                                          1           9
Premium on issue of ordinary shares exercised under option                             280       1,362
Share purchase                                                                       (304)       (609)
Debt due after more than one year - increase/(decrease) in long term                 8,000    (12,500)
borrowing

Net cash inflow/(outflow) from financing                                             7,977    (11,738)

Increase/(decrease) in cash in the year                                      5       5,303      (338)


CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
                                                                                              Restated
                                                                                      2002        2001
For the year ended 30 September                                                       £000        £000

Profit for the financial year                                                       12,858      15,363
Exchange (loss)/gain on consolidation                                                (109)          37

Total recognised gains and losses relating to the financial year                    12,749      15,400
Prior year adjustment                                                              (3,178)           -

Total recognised gains for the financial year                                        9,571      15,400


The prior period has been restated to reflect the adoption of FRS 19 - Deferred
taxation (see note 1).


RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

                                                                                             Restated
                                                                                     2002        2001
For the year ended 30 September                                                      £000        £000

Profit for the financial year                                                      12,858      15,363
Equity dividends paid or proposed                                                 (5,539)     (5,294)

Retained profit for the financial year                                              7,319      10,069
Exchange (loss)/gain on consolidation                                               (109)          37
Issue of ordinary shares exercised under option                                         1           9
Premium on issue of ordinary shares exercised under option                            280       1,362

Net movement in shareholders' funds                                                 7,491      11,477
Opening shareholders' funds                                                        44,266      32,789

Closing shareholders' funds                                                        51,757      44,266


Opening shareholders' funds were originally £47,444,000 before deducting the
prior year adjustment of £3,178,000 (see note 1).


NOTES TO THE ACCOUNTS



1      Basis of preparation

With the exception of the adoption of FRS 19 - Deferred taxation, the effect of
which is set out below, the financial statements have been prepared on the basis
of the accounting policies set out in the Group's last Annual Report and
Accounts.


FRS19 became effective for all accounting periods ending on or after 23 January
2002.  As a result of the adoption of FRS19, the Group's taxation charge now
fully reflects taxation deferred because of timing differences between the
treatment of certain items for taxation and accounting purposes (previously only
recognised to the extent that there was a reasonable probability that an actual
liability would crystallise).  The Group has opted to calculate deferred
taxation on a discounted basis.  As required by the standard, the comparative
figures have been restated.


The figures included in the accounts relating to deferred taxation are as
follows:
                                                                                           Restated
                                                                         2002                  2001
                                                                         £000                  £000

Profit and loss charge for deferred taxation                            1,200                   723
Deferred taxation liability (decrease in shareholders'                  4,378                 3,178
funds)





2      Analysis of turnover

An analysis of turnover by origin and customer location is as follows:


                                                                       2002                  2001
                                                                       £000                  £000

Europe                                                               28,693                31,107
United States of America                                             22,784                31,830
Asia-Pacific                                                          7,610                 9,143
                                                                     59,087                72,080





3      Earnings per share

                                                                                         Restated
                                                                       2002                  2001

Basic                                                                 16.2p                 19.4p
Diluted                                                               16.0p                 19.2p


Earnings per ordinary share is based on the Group's profit on ordinary
activities after taxation of £12,858,000 (2001: restated £15,363,000).

The weighted average number of shares used in the calculation is :   
                                          Basic 79,557,034 (2001: 79,156,557);

                                          Diluted 80,136,347 (2001: 79,887,608).

4      Reconciliation of operating profit to net cash inflow from
operating activities
                                                                        2002            2001
                                                                        £000            £000

                    Operating profit                                  19,512          22,886
                    Depreciation and amortisation charge               3,785           3,542

                    Earnings before interest, taxation,               23,297          26,428
                    depreciation and amortisation
                    (Increase)/decrease in stocks                    (6,053)           2,946
                    Decrease/(increase) in debtors                     2,658         (3,684)
                    (Decrease)/increase in creditors                 (2,657)           2,210
                    Japanese joint venture profit in stock                77              86
                    elimination
                    Share of operating profit in Japanese joint         (70)           (211)
                    venture
                    Effect of foreign exchange rate changes            (109)              44

                    Net cash inflow from operating activities         17,143          27,819


5      Reconciliation of net cash flow to movement in net debt


                                                                          2002               2001
                                                                          £000               £000

Increase/(decrease) in cash in year                                      5,303              (338)
Cash (inflow)/outflow from decrease in debt                            (8,000)             12,500

Movement in net (debt)/cash in the year                                (2,697)             12,162
Net cash/(debt) at beginning of year                                     1,038           (11,124)

Net (debt)/cash at end of year                                         (1,659)              1,038


6      Exchange rates

The Sterling exchange rates used in the accounts under the Group's accounting
policies are:

                                          Average exchange rate       Closing exchange rate

                                             2002          2001          2002          2001

US Dollar                                    1.39          1.53          1.36          1.48

Euro                                         1.59          1.62          1.61          1.61

Yen                                           154           155           173           152


7      Dividend and Annual General Meeting

The proposed final dividend will be paid on 4 March 2003 to ordinary
shareholders on the share register at the close of business on 7 February 2003.
The Annual General Meeting of the Company will be held on 11 February 2003 at
The Thistle Tower Hotel, London, E1W 1LD.

8      Financial Statements

The above financial information does not comprise full financial statements
within the meaning of the Companies Act 1985.  The results for the years ended
30 September 2002 and 2001 have been extracted from the full accounts for those
periods.  The auditors have given an unqualified report on the accounts for both
years.  The accounts for the year ended 30 September 2001 have been delivered to
the Registrar of Companies.  The accounts for the year ended 30 September 2002
are to be posted to shareholders on 17 December 2002 and will be available from
the Company's registered office at Victrex Technology Centre, Hillhouse
International, Thornton Cleveleys, Lancashire, FY5 4QD.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
                  IIF