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Victrex says still unsure about dividend but margins to remain weak

The chemicals producer will assess current market conditions and its outlook before deciding on the current year payout

Victrex plc - Victrex still unsure about dividend but margins to remain weak

Victrex plc (LON:VCT) has said it will assess current market conditions and the outlook for the next period before deciding on dividend payments for the year to end September, 2020.

The FTSE 250-listed chemicals producer said margins are expected to get weaker throughout year-end into the 2021 financial period, reflecting lower demand and planned inventory reduction.

READ: Johnson Matthey and Victrex downgraded to ‘hold’ as Liberum predicts two-year recession for auto chemicals market

In the three months to June 30, 2020, Victrx said group revenue slipped by 18% to £58mln, on sales volume down 12% to 805 tonnes.

Disruption continues in the aerospace, automotive and energy markets, while the medical division is expected to see a faster recovery as elective procedures around the world recommence, the group noted in its third-quarter trading update.

Net cash was £72mln at the end of the quarter, while it has £40mln available in two separate loan facilities, the company added.

"We are fans of the business long term, but in the near term the uncertain outlook for two of its key end-markets makes forecasting difficult. We currently don’t expect to see as much of a rebound as the rest of the market does," analysts at Peel Hunt commented.

Shares slipped 4% to 1,900p early on Wednesday.

--Adds analyst comment, shares--

Quick facts: Victrex plc

Price: 1830 GBX

LSE:VCT
Market: LSE
Market Cap: £1.59 billion
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