Interim Management Statement

RNS Number : 5569T

Victrex PLC

21 July 2015

 



 

                                               

21 July 2015

Victrex plc - Interim Management Statement

"Solid trading and acquisition of Kleiss Gears"

Victrex plc, an innovative world leader in high performance polymer solutions, today announces its Interim Management Statement for the period 1 April 2015 to 30 June 2015 (Q3) and the acquisition of Kleiss Gears Incorporated for a cash consideration of approximately $6m.

Victrex saw solid trading against tougher comparatives during Q3, with our performance reflecting continuing growth across our industrial markets, which is offsetting sales to Oil & Gas and a lower contribution from our Invibio medical business. Third quarter Group revenue of £64.5m was flat compared to the prior year period (Q3 2014: £64.2m) and slightly ahead in constant currency, with third quarter Group sales volume of 1,070 tonnes 17% ahead of the prior year (Q3 2014: 911 tonnes). Year to date Group sales volume of 3,098 tonnes is 24% ahead of the prior year (YTD 2014: 2,495 tonnes).

Within Victrex Polymer Solutions (VPS), Consumer Electronics volumes remain strong and, as previously communicated, we expect volumes from the current opportunity to continue through our 2016 financial year.

In our Invibio medical business, the sales improvement trend we saw in Q2 did not continue as we anticipated during Q3. Overall sales were down during the quarter, driven lower by the continued effects of consolidation in the US medical device industry.  However, outside of the US, sales in Europe and emerging markets remain positive.  On a full year basis, we now anticipate Invibio revenue will be lower than 2014. Our expectation is for full year sales to decline by a broadly similar level to the 4% reduction seen in the first half year. 

All of our new product platforms and adoption programmes continue to make positive progress, including those in medical for PEEK-OPTIMA^® HA-Enhanced (Spine), Dental, Trauma and Knee.

Acquisition of Kleiss Gears

Victrex is pleased to announce the acquisition of Kleiss Gears, a US based polymer gears' manufacturer, for approximately $6m (£3.8m) in cash.  

Kleiss has over 20 years' experience of unique design and precision moulding capability in gears, and will benefit from Victrex's materials know-how, existing customer relationships and global commercial reach.  Kleiss has early stage commercialisation of PEEK gear programmes, alongside the rest of its mainly industrial focused gears business.  

The acquisition is in line with Victrex's strategy of moving further downstream and investing in growth acceleration opportunities for its pipeline projects. It offers the opportunity to accelerate Victrex's PEEK gear proposition to the automotive industry, in line with our aim to double the amount of PEEK volume in cars over the medium term. 

For its 2014 financial year, Kleiss had revenues of approximately $4m and employed 26 people.

Outlook

For the year as a whole, whilst challenges continue in the Oil & Gas market and in improving Invibio's performance, our overall momentum remains positive and we still expect to fully overcome the impact of foreign currency.  Consequently, and reflecting our balanced portfolio, Victrex remains well positioned to deliver profit progress over the full year.

Cash generation remains healthy and there have been no significant changes to the Group's financial position since our interim results announcement.

Enquiries:

Victrex plc:

Andrew Hanson, Head of Investor Relations & Communications                             [phone]

Louisa Burdett, Group Finance Director                                                                [phone]

David Hummel, Chief Executive                                                                           [phone]

Pendomer Communications:

Charles Armitstead                                                                                            [phone]

About Victrex:

Victrex is an innovative world leader in high performance polymer solutions focused on the Aerospace, Automotive, Electronics, Energy and Medical markets. Every day, millions of people rely on products or applications which contain our polymers, from smartphones, aeroplanes and cars to oil & gas operations and medical devices. With over 35 years' experience, we are investing in technical excellence to deliver leading edge solutions to our customers and our markets, and to drive value for our shareholders. Find out more at www.victrexplc.com

Investor and analyst call:

A call for investors and analysts will be held today, Tuesday 21 July at 08.00am UK time. For dial in details please contact Laura Stewart at Pendomer Communications: [e-mail] or [phone].

 

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