Final Results

RNS Number : 1739T

Victrex PLC

11 December 2012

 



11 December 2012

Victrex plc

Final results announcement for the year ended 30 September 2012

Highlights

·           Group revenue up 2% to £219.8m

·           Earnings per share up 0.5% to 85.7p

·           Cash of £83.9m at 30 September 2012 and no debt

·           Full year dividend per ordinary share up 15% to 37.4p

Chairman Anita Frew commented:

"On behalf of the Board, I am pleased to report that we have delivered another year of record performance in Victrex, despite the challenging global economic environment. Strong new business commercialisation in our VPS business and growth in the developing markets of our Invibio business have driven this year's success.

The fundamental growth drivers for our business continue to be strong across all of our end markets.

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. We remain committed to invest in application development, technical leadership, talent and capacity to ensure that we are the partner of choice for our customers and end users."

Enquiries

 

Victrex plc
David Hummel, Chief Executive	0203 128 8100 (11 December 2012)
Steve Barrow, Finance Director	01253 897700  (thereafter)
MHP Communications
Nick Denton / Barnaby Fry / Ian Payne	0203 128 8100

A presentation for analysts and investors will be held at 9.30am this morning at the Andaz Hotel, Liverpool Street, EC2M 7QN. A telephone dial in facility will be available for analysts and investors who are unable to attend the presentation, of which details are available from Rosa Smith at MHP Communications on 0203 128 8560. The presentation can be viewed on Victrex's website at www.victrex.com.

Victrex plc

Final results statement for the year ended 30 September 2012

On behalf of the Board, I am pleased to report that we have delivered another year of record performance in Victrex, despite the challenging global economic environment. Strong new business commercialisation in our Victrex Polymer Solutions ('VPS') business and growth in the developing markets of our Invibio Biomaterial Solution ('Invibio') business have driven this year's success.

Group financial results

Group sales volume for the year increased by 2% to 2,904 tonnes (2011: 2,860 tonnes) reflecting strong new business commercialisation in VPS. Second half volume of 1,527 tonnes was 7% ahead of the same period last year (H2 2011: 1,426 tonnes) and 11% ahead of the first half (H1 2012: 1,377 tonnes) which reflected the de-stocking we reported in the first quarter of our financial year.

Full year revenue in Invibio increased to £50.5m (2011: £49.7m) largely driven by growth in developing markets, and in particular, arthroscopy. Spine revenues were broadly in line with the prior year with continued growth and innovation in the market being offset by inventory rationalisation at a select number of customers during the second half, reflecting the continuing challenges in the medical device industry.

Resulting Group revenue for the year was up 2% to £219.8m (2011: £215.8m).

Full year gross margin remained strong and in line with expectations at 66.3% (2011: 67.8%). The anticipated reduction year on year reflects further investment in resources to increase available production capacity, underpinning security of supply for our customers, as well as increased raw material input costs.

We remain committed to working with customers and end users to understand their current needs and future opportunities. This directs our investment in resources which are targeted to drive new application development, the key growth programmes for the future and the quality of our products and services. Innovation is key for growing the market for our products and is a critical differentiator for our business. We continue to invest in a broad range of activities including product and process improvements, pro-active customer technical support and joint development programs with customers and end users as we explore new applications and markets for our products. To this end we have invested in new technical facilities in the UK and Japan and research and development expenditure in the year has increased to £13.1m (2011: £10.5m) representing 6% of revenue (2011: 5%).

This continued investment in the business has, however, been more than offset by lower costs associated with elements of staff remuneration which are linked to underlying business performance. Resulting total sales, marketing and administrative expenses reduced by 2% to £51.7m (2011: £52.6m).

Group profit before tax of £94.5m (2011: £94.2m) and basic earnings per share of 85.7p (2011: 85.3p) were both marginally ahead of the record results achieved last year. Earnings also benefitted from an improvement in the effective tax rate to 23.9% (2011: 24.5%) predominantly reflecting the reduction in the UK corporation tax rate.

Balance sheet

Net assets at 30 September 2012 totalled £271.1m, an increase from £221.6m reported at 30 September 2011, primarily reflecting the profit generated by the business during the year.

We continue to manage our working capital carefully and in line with our strategic aims. Customer service excellence and security of supply are key differentiators for Victrex with existing and future potential customers and end users. With this in mind we have invested in inventory levels during the year increasing to £48.6m (2011: £45.0m). This is in part due to increased trading but also due to production of a number of special grade products which we manufacture on a periodic basis. Trade receivables increased in line with trading, with receivables which are either current or less than 30 days overdue at 93% (2011: 91%) reflecting the strong customer relationships we maintain. Trade creditor days remain consistent with prior year at 31 days with our commitment to our suppliers that we pay them within the agreed terms to maintain a strong working relationship and flexibility in the supply chain to meet our needs.

Retirement benefit obligations have reduced to £4.0m (2011: £6.2m) reflecting an additional deficit funding contribution of £0.9m paid during the year and favourable actuarial movements.

Cash flow

Cash generated from operations remained strong at £89.9m (2011: £91.2m).

Capital expenditure payments increased to £27.0m (2011: £9.0m), mainly as a result of investment in our new UK and Japanese Technology Centres together with investment in BDF production capacity (the main raw material for PEEK) which will be completed during 2013. We also recently commenced construction of our third PEEK plant which will be located at our Hillhouse site. The project is expected to cost £90m and will increase our PEEK production capacity from 4,250 tonnes to in excess of 7,000 tonnes and is due for completion in early 2015.

Taxation paid was £24.4m (2011: £25.7m) reflecting the reduction in the UK tax rate and the receipt of a refund following agreement of a number of prior year computations.

Total dividends paid during the year decreased to £28.0m from £63.8m in 2011 which included a special dividend in February 2011 of £41.6m.

The resulting Group cash balance as at 30 September 2012 was £83.9m with no debt (2011: £72.3m and no debt).

Proposed dividend

We remain committed to a progressive and sustainable dividend policy which reflects our underlying confidence in the growth prospects for our business, despite current economic and market challenges. We are therefore recommending 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. Dividend cover is 2.3 times (2011: 2.6 times).

The strength of our balance sheet and cash generation underpins our ability to invest in our business for future growth as well as maintaining our dividend policy. It also continues to provide reassurance to customers, suppliers and investors alike as we invest for the future whilst navigating the current uncertain economic and market conditions. We will continue to review our dividend policy in the light of our medium-term strategic investment plans and consider any potential additional return to shareholders as appropriate.

Victrex Polymer Solutions

	2012	2011	Change
	£m	£m	%
Revenue	169.3	166.1	2%
Gross profit	101.1	102.5	(1%)
Operating profit	68.5	66.8	3%

VPS generated record revenue for the year of £169.3m (2011: £166.1m) as the business recovered strongly from the customer de-stocking reported in quarter one of our financial year. The recovery was driven by strong new application development as continued economic uncertainty remains.

As expected, gross margin decreased to 59.7% (2011: 61.7%) predominantly due to the increased cost of manufacturing. This reflects the further investment we have made in our

production and engineering resources to increase available capacity together with increased raw material input costs.

We have continued to invest during the period in resources targeted at growth initiatives around the business. However, this has been more than offset by lower costs associated with elements of staff remuneration which are linked to underlying business performance. Resulting sales, marketing and administrative expenses decreased by 9% to £32.6m (2011: £35.7m).

Operating profit was a new record at £68.5m (2011: £66.8m) reflecting an increase of 3% over the prior year.

Major markets

Group sales volume in Europe recovered across all end use markets from the de-stocking we reported for the first quarter of our financial year. Second half sales volume of 747 tonnes, whilst not yet back to previous record levels, was 5% ahead of the first half of 710 tonnes and resulted in full year sales volume of 1,457 tonnes (2011: 1,576 tonnes). In the US strong sales and new business development, predominantly in oil and gas and consumer electronics, resulted in record sales volume of 926 tonnes, 19% ahead of the previous year (2011: 778 tonnes). The second half was particularly strong with sales volume of 522 tonnes being 29% ahead of the first half (404 tonnes) predominantly due to the new business in consumer electronics. In Asia, sales volume of 521 tonnes was 3% ahead of the previous year (2011: 506 tonnes) driven by growth in semiconductor and consumer electronics applications.

Year on year sales volume outside of Japan grew by 12% and now represents more than half of our sales into the region. Second half volume of 258 tonnes was broadly in line with the first half (263 tonnes).

Industrial sector sales volume in the second half of 569 tonnes was 3% ahead of the first half (552 tonnes) resulting in full year volume of 1,121 tonnes broadly in line with 2011 (1,144 tonnes). The oil and gas market showed growth during the year with continued investment in off-shore and down-hole exploration. However, this was broadly offset by the impact of de-stocking in the first quarter together with reduced sales into the industrial machinery and process equipment market reflecting cautious capital investment as a result of continued economic uncertainty.

Second half sales volume into the transport sector of 382 tonnes was 5% ahead of the first half (362 tonnes) and led to full year volume of 744 tonnes in line with the prior year (741 tonnes). Sales increased into aerospace applications following the launch of the Boeing 787 whilst automotive sales remained strong and in line with 2011, despite the de-stocking experienced in the first quarter.

Growth in new consumer electronics applications in the second half of the financial year led to a second half volume into the electronics sector of 404 tonnes, which was a 30% increase over the first half (310 tonnes). Resulting full year sales volume of 714 tonnes increased by 11% (2011: 646 tonnes). Sales into the semiconductor manufacturing sector have remained at a similar level to 2011 and reflect a continued shift in investment and production towards Asia.

Product and market development

We continue to work closely with customers and end users to drive opportunities where our products can help to solve their problems and facilitate innovation.

New business commercialisation was very strong throughout the year across all sectors, but in particular in transport, with the commercialisation of a number of applications for use on the Boeing 787, and in electronics, with success particularly in the consumer electronics area. In total we commercialised 550 new VICTREX PEEK polymer applications with an estimated mature annualised volume ('MAV') of 683 tonnes compared with 539 commercialised applications with an MAV of 309 tonnes in 2011.

The development pipeline remains healthy with new opportunities being generated across all our markets and at the year end contained 1,908 potential developments (2011: 3,416) with an estimated MAV of 2,212 tonnes (2011: 2,328 tonnes) if all of the developments were successfully commercialised. The reduction in the overall pipeline reflects the particularly successful year we have had in closing new business. Overall the pipeline remains strong and diversified.

We continue to see significant growth potential for our business reflected in the development pipeline, but also in the number of potentially significant technical programmes we are working on with customers and end users for the future. The megatrends driving innovation in our markets, including lightweighting for fuel efficiency, miniaturisation and complexity of natural resource exploration, play to the strengths of our products and services and with our continued investment in talent, technology and capacity, we are well placed to take advantage of opportunities and play a leading role alongside our customers in growing the market.

Invibio Biomaterial Solutions

	2012	2011	Change
	£m	£m	%
Revenue	50.5	49.7	2%
Gross profit	44.6	43.9	2%
Operating profit	29.2	30.3	(4%)

Invibio generated record revenue of £50.5m, an increase of 2% over 2011 (£49.7m). This reflected strong growth in developing markets, particularly arthroscopy. However, spine revenues were broadly flat year on year with continued innovation and global expansion offset by de-stocking in our second half by a select number of customers in response to the ongoing challenges in that market.

Gross margins have remained strong and stable at 88.3% (2011: 88.4%).

Sales, marketing and administrative expenses increased by £1.8m to £15.4m reflecting investment in resources and projects that are targeted towards driving future growth programmes as well as continuing to improve our product and service offerings to our existing customers. Specifically we have recruited additional business development managers in emerging geographies as well as application specific leaders and regulatory expertise from the medical device industry to improve collaborations with our customers and to better understand surgeons' needs.

Resulting operating profit of £29.2m was marginally down on 2011 reflecting our commitment to continue investment for future growth.

Major markets

The spine market was broadly in line with the prior year at £38.2m (2011: £38.6m). Innovation and growth in our established geographies of the US and Europe continues but as previously reported we have experienced some de-stocking in our second half at selected customers which reflects the continuing challenges in the medical device industry. Our growth strategy into Asia continues with revenues up 9% to £3.6m (2011: £3.3m).

Our developing markets outside of spine grew by 11% in 2012 dominated by the arthroscopy market which grew 29% to £6.2m (2011: £4.8m).

Product and market development

Invibio entered into 49 additional long-term supply assurance agreements with implantable medical device manufacturers during 2012. These agreements were with manufacturers based in the United States (15), Europe (14) and increasingly in emerging geographies (20).

Since its introduction over ten years ago Invibio has entered into 454 long-term supply assurance agreements and more than 3 million devices containing Invibio's PEEK-OPTIMA^® polymer have been implanted into patients.

Invibio continues to work closely with medical device manufacturers, surgeons and clinicians to drive awareness of our biomaterials and their benefits in new application areas. We support our customers in every step of their journey from initial concept through to market testing and acceptance, delivering sales growth for both ourselves and our customers.

As market growth rates in established Western geographies are forecast to be low or flat in upcoming years, more and more of our customers are looking to penetrate emerging geographies where growth rates are more appealing. In response to this trend, we have continued to strengthen our regulatory expertise on a global basis to support our customers as they seek entry into these emerging geographies.

We continue to grow our scientific network through close partnerships with world class research groups and key opinion leaders to increase the pace and probability of successful innovation with our biomaterials.

Invibio's application focus continues to be on maintaining and growing our success in spine and arthroscopy applications whilst accelerating the adoption of our biomaterials in developing areas such as removable dentures, trauma and orthopaedics.

The growth potential in our existing markets, through innovation and global expansion, as well as technical programs aligned with our developing markets, reinforce the growth opportunities for our business. Furthermore, the trends of an ageing global population wanting improved quality of life in later years and the desire for more cost effective treatments for patients play to the strengths of our products and services and will continue to provide growth opportunities for the future.

People

We recognise that, whilst being an asset based business, Victrex relies heavily on the skills, experience and competence of our employees to produce our products safely and efficiently, develop innovative new products and support business development in our existing and new markets. The talent and focus of our employees underpins the strategy of our business and is at the core of our success.

On behalf of the Board, I would like to pay tribute to all our employees and thank them for their outstanding contribution to the record results this year. The passion, innovation and performance of our employees remain a key asset to our business and its success in the future.

Outlook

The fundamental growth drivers for our business continue to be strong across all of our end markets.

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. We remain committed to invest in application development, technical leadership, talent and capacity to ensure that we are the partner of choice for our customers and end users.

Anita Frew

Chairman

10 December 2012

CONSOLIDATED INCOME STATEMENT
for the year ended 30 September		2012	2011
	Note	£m	£m
Revenue	2	219.8	215.8
Cost of sales		(74.1)	(69.4)
Gross profit		145.7	146.4
Sales, marketing and administrative expenses		(51.7)	(52.6)
Operating profit	2	94.0	93.8
Financial income		0.6	0.5
Financial expenses		(0.1)	(0.1)
Profit before tax		94.5	94.2
Income tax expense		(22.6)	(23.0)
Profit for the year attributable to owners of the parent		71.9	71.2

Earnings per share
Basic	3	85.7p		85.3p
Diluted	3	85.1p		84.4p

Dividend per ordinary share
Interim		9.0p		8.0p
Final		28.4p		24.5p
		37.4p		32.5p

A final dividend in respect of 2012 of 28.4p has been recommended by the Directors for approval at the Annual General Meeting in February 2013.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 September		2012	2011
		£m	£m
Profit for the year		71.9	71.2
Other comprehensive income
Currency translation differences for foreign operations		(1.0)	0.4
Effective portion of changes in fair value of cash flow hedges		7.0	(1.6)
Net change in fair value of cash flow hedges transferred to profit or loss		(2.1)	(0.7)
Defined benefit pension schemes actuarial gains		1.3	1.1
Tax on other comprehensive income		(2.5)	0.3
Total other comprehensive income/(expense) for the year		2.7	(0.5)
Total comprehensive income for the year attributable to owners of the       parent		74.6	70.7

CONSOLIDATED BALANCE SHEET
as at 30 September	2012	2011
	£m	£m
Assets
Non-current assets
Property, plant and equipment	143.6	125.5
Intangible assets	10.1	10.1
Deferred tax assets	7.1	9.0
	160.8	144.6
Current assets
Inventories	48.6	45.0
Current income tax assets	1.6	0.8
Trade and other receivables	26.8	24.2
Derivative financial instruments	4.0	0.9
Cash and cash equivalents	83.9	72.3
	164.9	143.2
Total assets	325.7	287.8
Liabilities
Non-current liabilities
Deferred tax liabilities	(14.0)	(14.8)
Retirement benefit obligations	(4.0)	(6.2) )
	(18.0)	(21.0)
Current liabilities
Derivative financial instruments	(0.3)	(3.2)
Current income tax liabilities	(13.0)	(12.5)
Trade and other payables	(23.3)	(29.5)
	(36.6)	(45.2)
Total liabilities	(54.6)	(66.2)
Net assets	271.1	221.6
Equity
Share capital	0.8	0.8
Share premium	29.1	27.1
Translation reserve	2.0	3.0
Hedging reserve	2.1	(1.6)
Retained earnings	237.1	192.3
Total equity attributable to owners of the parent	271.1	221.6

These financial statements of Victrex plc, registered number 2793780, were approved by the Board of Directors on 10 December 2012 and were signed on its behalf by:

D R Hummel                                A S Barrow

Chief Executive                           Finance Director

CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30 September		2012	2011
		£m	£m
Profit after tax for the year		71.9	71.2
Income tax expense		22.6	23.0
Net financing income		(0.5)	(0.4)
Dividends received from subsidiaries		-	-
Operating profit		94.0	93.8
Adjustments for:
Depreciation		9.6	8.8
Increase in inventories		(4.3)	(9.7)
Increase in trade and other receivables		(2.6)	(5.5)
(Decrease)/increase in trade and other payables		(6.5)	4.5
Equity-settled share-based payment transactions		1.7	1.6
Changes in fair value of derivative financial instruments		(1.1)	(0.1)
Retirement benefit obligations charge less contributions		(0.9)	(2.2)
Cash generated from operations		89.9	91.2
Net financing income received		0.5	0.4
Tax paid		(24.4)	(25.7)
Net cash flow from operating activities		66.0	65.9
Cash flows from investing activities
Acquisition of property, plant and equipment		(27.0)	(9.0)
Dividends received		-	-
Net cash flow from investing activities		(27.0)	(9.0)
Cash flows from financing activities
Proceeds from issue of ordinary shares exercised under option		2.0	2.8
Purchase of own shares held		(0.8)	(1.0)
Dividends paid		(28.0)	(63.8)
Net cash flow from financing activities		(26.8)	(62.0)
Net increase/(decrease) in cash and cash equivalents		12.2	(5.1)
Effect of exchange rate fluctuations on cash held		(0.6)	0.1
Cash and cash equivalents at beginning of year		72.3	77.3
Cash and cash equivalents at end of year		83.9	72.3

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Share	Share	Translation	Hedging	Retained
	capital	premium	reserve	reserve	earnings	Total
	£m	£m	£m	£m	£m	£m
Equity at 1 October 2010	0.8	24.3	2.6	0.1	183.5	211.3
Total comprehensive income for the year
Profit	-	-	-	-	71.2	71.2
Other comprehensive income
Currency translation differences for foreign      operations	-	-	0.4	-	-	0.4
Effective portion of changes in fair value of cash flow      hedges	-	-	-	(1.6)	-	(1.6)
Net change in fair value of cash flow hedges      transferred to profit or loss	-	-	-	(0.7)	-	(0.7)
Defined benefit pension schemes actuarial gains	-	-	-	-	1.1	1.1
Tax on other comprehensive income	-	-	-	0.6	(0.3)	0.3
Total other comprehensive income for the year	-	-	0.4	(1.7)	0.8	(0.5)
Total comprehensive income for the year	-	-	0.4	(1.7)	72.0	70.7
Contributions by and distributions to owners of      the Company
Share options exercised	-	2.8	-	-	-	2.8
Equity-settled share-based payment transactions	-	-	-	-	1.6	1.6
Purchase of own shares held	-	-	-	-	(1.0)	(1.0)
Dividends to shareholders	-	-	-	-	(63.8)	(63.8)
Equity at 30 September 2011	0.8	27.1	3.0	(1.6)	192.3	221.6
Total comprehensive income for the year
Profit	-	-	-	-	71.9	71.9
Other comprehensive income
Currency translation differences for foreign      operations	-	-	(1.0)	-	-	(1.0)
Effective portion of changes in fair value of cash flow      hedges	-	-	-	7.0	-	7.0
Net change in fair value of cash flow hedges      transferred to profit or loss	-	-	-	(2.1)	-	(2.1)
Defined benefit pension schemes actuarial gains	-	-	-	-	1.3	1.3
Tax on other comprehensive income	-	-	-	(1.2)	(1.3)	(2.5)
Total other comprehensive income for the year	-	-	(1.0)	3.7	-	2.7
Total comprehensive income for the year	-	-	(1.0)	3.7	71.9	74.6
Contributions by and distributions to owners of      the Company
Share options exercised	-	2.0	-	-	-	2.0
Equity-settled share-based payment transactions	-	-	-	-	1.7	1.7
Purchase of own shares held	-	-	-	-	(0.8)	(0.8)
Dividends to shareholders	-	-	-	-	(28.0)	(28.0)
Equity at 30 September 2012	0.8	29.1	2.0	2.1	237.1	271.1

NOTES TO THE FINANCIAL STATEMENTS

1. Financial statements and basis of preparation

The financial statements have been prepared on the basis of the accounting policies set out in the Group's last Annual Report and Accounts except for the application of relevant new standards. A number of new standards and amendments to existing standards were effective for the financial year ended 30 September 2012. None of these have had a material impact. 

A number of standards, amendments and interpretations have been issued and endorsed by the EU, but which are not yet effective and accordingly the Group has not yet adopted. The cumulative impact of the adoption of these standards is not expected to be significant.

The financial information presented does not comprise full financial statements within the meaning of the Companies Act 2006. The results for the year ended 30 September 2012 have been extracted from the full accounts for that period. The auditor has given an unqualified report on the accounts for this year. The results for the year ended 30 September 2011 have been extracted from the full accounts for that year, which were unqualified and have been delivered to the Registrar of Companies.

Sections of this results statement contain forward-looking statements, including statements relating to: future demand and markets for the Group's products and services; research and development relating to new products and services and liquidity and capital resources. These forward-looking statements involve risks and uncertainties because they relate to events that may or may not occur in the future. Accordingly, actual results may differ materially from anticipated results because of a variety of risk factors which are summarised in note 6.

The accounts for the year ended 30 September 2012 will be posted to shareholders on 2 January 2013 and will be available from the Company's Registered Office at Victrex Technology Centre, Hillhouse International, Thornton Cleveleys, Lancashire, FY5 4QD, United Kingdom.

2. Segment reporting

The Group complies with IFRS 8 - Operating Segments which requires operating segments to be identified and reported upon that are consistent with the level at which results are regularly reviewed by the entity's chief operating decision maker. The chief operating decision maker for the Group is the Victrex plc Board. Information on the business units is the primary basis of information reported to the Victrex plc Board. The performance of the business units is assessed based on segmental operating profit.

The Group's business is strategically organised as two business units: Victrex Polymer Solutions, which focuses on our transport, industrial and electronics markets and Invibio Biomaterial Solutions, which focuses on providing specialist solutions for medical device manufacturers.

	Victrex Polymer Solutions 2012	Invibio Biomaterial Solutions 2012	Group 2012	Victrex Polymer Solutions 2011	Invibio Biomaterial Solutions 2011	Group 2011
	£m	£m	£m	£m	£m	£m
Revenue from external sales	169.3	50.5	219.8	166.1	49.7	215.8
Segment operating profit	68.5	29.2	97.7	66.8	30.3	97.1
Unallocated central costs			(3.7)			(3.3)
Operating profit			94.0			93.8
Net financing income			0.5			0.4
Profit before tax			94.5			94.2
Income tax expense			(22.6)			(23.0)
Profit for the year attributable      to owners of the parent			71.9			71.2
Other information
Depreciation	9.2	0.4	9.6	8.5	0.3	8.8

Entity wide disclosures

Information about products and services

The Group derives its revenue from the sale of high performance thermoplastic polymers.

Information about geographical areas

The Group's country of domicile is the United Kingdom. Revenues are attributed to customers based on the customer's location.

		Revenue from external sales
		2012	2011
		£m	£m
United Kingdom		5.9	5.3
Europe, Middle East and Africa ('EMEA')		91.0	97.0
Americas		81.2	73.6
Asia-Pacific		41.7	39.9
		219.8	215.8

Information about major customers

In the current year no one customer contributed more than 10% to Group revenue (2011: £24.3m).

3. Earnings per share

Earnings per share is based on the Group's profit attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding during the year, excluding own shares held.

				2012	2011
Earnings per share	- basic			85.7p	85.3p
	- diluted			85.1p	84.4p
Profit for the financial year				£71.9m	£71.2m
Weighted average number of shares used:
- Issued ordinary shares at beginning of year				84,033,879	83,604,504
- Effect of own shares held				(395,783)	(394,375)
- Effect of shares issued during the year				220,687	182,603
Basic weighted average number of shares				83,858,783	83,392,732
Effect of share options				635,424	936,563
Diluted weighted average number of shares				84,494,207	84,329,295

4. Exchange rates

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

	2012		2011
	Average	Closing	Average	Closing
US Dollar	1.59	1.61	1.57	1.56
Euro	1.17	1.26	1.16	1.16
Yen	126	126	135	120

5. Dividend and Annual General Meeting

The proposed final dividend will be paid on 22 February 2013 to all shareholders on the register on 8 February 2013. The Annual General Meeting of the Company will be held at 11am on 5 February 2013, at the Andaz Hotel, Liverpool Street, London, EC2M 7QN.

6. Risks, trends, factors and uncertainties

Victrex's business and share price may be affected by a number of risks, trends, factors and uncertainties, not all of which are in our control.

Accordingly, actual results may differ materially from anticipated results because of a variety of risk factors, including: changes in exchange rates; changes in global, political, economic, business, competitive and market forces; changes in raw material pricing and availability; changes to legislation and tax rates; future business combinations or disposals; relations with customers and customer credit risk; events affecting international security, including global health issues and terrorism; changes in regulatory environment and the outcome of litigation.

FINANCIAL CALENDAR

Annual General Meeting	5 February 2013
Ex dividend date	6 February 2013
Record date*	8 February 2013
Payment of final dividend	22 February 2013
Announcement of 2013 half-yearly results	May 2013
Payment of interim dividend	July 2013

* The date by which shareholders must be recorded on the share register to receive the dividend.

 

END

 

 

FR LLFSSFFLILIF