Victrex plc (LON:VCT) reported only a small drop in profits in the half-year to 31 March but said the coronavirus pandemic was beginning to hit demand in Europe and the US.
Since an update from the polymer maker in early April, headwinds have emerged from Covid-19 in its forward order book, particularly in the aerospace and automotive end-markets, with the energy business continues to see very tough conditions.
Supply chains are flowing, inventory levels are high and measures have been put in place to conserve cash, as stated last month, while chief executive Jakob Sigurdsson pointed to more normalised demand returning in Asia that “could prove supportive, although the demand outlook in Europe and the US is becoming more challenging”.
First-half results showed a 5% increase in sales volumes led to a 4% rise in revenue to £151.5mln.
Lower profit margins percolated through to a 1% fall in reported profit to £49.9mln, though the softening of the pound provided a considerable cushion.
Net cash stood at £53.2mln, with a further £40mln accessible from the bank if needed.
“Whilst the global demand picture remains highly uncertain, we will continue to position ourselves for the uptick, with further investments tailored to specific long-term growth opportunities,” said Sigurdsson, referring to a subsidiary in China.
Due to the significant macroeconomic and end-market uncertainty, detailed guidance for the rest of the year was not possible, but he said “we believe the proactive actions we are taking are appropriate to minimise disruption and on a long-term basis, our Polymer & Parts strategy keeps us well placed to deliver our range of medium to long term growth opportunities.”