Victrex PLC (LSE:VCT) shares fell 7% to 548p after the polymer maker reported lower interim profits, a statutory loss and said it was cutting around 10% of jobs around the business.
Underlying profit before tax for the FTSE 250 group fell 18% to £19 million in the six months to March, as stronger sales volumes were offset by pricing pressure, product mix and currency movements.
Revenue rose 1% to £147.1 million, while sales volumes increased 6% to 2,137 tonnes. Gross margin declined to 41.7% from 44.1% a year earlier.
Victrex posted a reported pre-tax loss of £44 million after exceptional charges of £63 million, largely reflecting a £61 million non-cash impairment linked to its manufacturing facility in China.
The company said it remained committed to the facility in Liaoning province in north-east China, describing Asia as its fastest-growing region.
The interim dividend was maintained at 13.42p a share.
Dr James Routh, chief executive, said the company had regained momentum in the second quarter after a weak start to the year, led by its Sustainable Solutions division.
Victrex is cutting around 10% of roles, mainly in central functions, as part of a profit improvement plan expected to deliver annual savings of at least £10 million in the 2027 financial year.
The group said it expects full-year underlying profit before tax of £42 million to £44 million.
Analysts at Jefferies said this was below consensus forecasts of £46.6 million, and served to "highlight ongoing mix/price pressure, and self-help is unlikely to be enough to offset these, in our view".
"The guidance downgrade and China impairment are unlikely to come as major surprises, but are clearly unhelpful."
The China impairment comes after prolonged operational problems since opening in late 2024, with the broker noting that the site was unable to deliver its intended 1,500-tonne capacity and would remain loss-making and cash negative in the 2026 financial year.
Jefferies said third-quarter trading seemed to be broadly in line with the second, with Medical performing relatively strongly, while energy hedging and supplier contracts had so far insulated Victrex from disruption linked to the Middle East conflict.