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Victrex halves dividend as profits stumble as auto and electronics worsen

This year, the company has issued two profit warnings, saying it expected profits to be hit by revenues from a large contract in its consumer electronics business being wiped out

Victrex plc -

Victrex plc (LON:VCT) has slashed its full-year dividend after being hit by weakness in automotive and electronics markets, as well as some destocking as consumer demand weakens.

The FTSE 250 chemicals company, which makes everything from plastic pipes to spinal implants, revealed that profit before tax dropped 18% to £104.7mln in the 12 months to the end of September, which was not unexpected after two profit warnings this past year.

This led to the full-year dividend being sliced down 58% to 59.56p.

Profits were hit by the lack of sales from a formerly large contract in its consumer electronics business, with total revenues down 10% to £294mln, as lower automotive and electronics volumes were offset by growth in aerospace, energy, and medical businesses.

Jakob Sigurdsson, chief executive of Victrex, said: "Looking forward, Automotive and Electronics are showing signs of stability, although we will retain some caution on these markets at this early stage, with an initial assumption that current trends will continue through the first half year.”

Looking ahead, Victrex added that it has secured additional stocks of certain raw materials it imports to reduce the impact of Brexit uncertainty, and is progressing a two-year £15mln “debottlenecking” programme to increase its capacity.

Shares were flattish at 2,344p in mid-morning trading on Thursday.

Quick facts: Victrex plc

Price: 1899 GBX

LSE:VCT
Market: LSE
Market Cap: £1.65 billion
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