REG - Victrex PLC - Victrex plc – Interim Results 2025
12/05/2025 07:00
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RNS Number : 1822I Victrex PLC 12 May 2025
12 May 2025
Victrex plc - Interim Results 2025
STRONG FOUNDATIONS - IMPROVEMENT ACTIONS - NAVIGATING UNCERTAINTY
Strong volume growth & FY volume guidance upgraded
PBT held back by FX, China & mix; strong cash conversion
Victrex plc is an innovative world leader in high performance polymers,
delivering sustainable products which enable environmental and societal
benefit. This announcement covers interim results (unaudited) for the 6 months
ended 31 March 2025.
H1 2025 H1 2024 % change (reported) % change
(constant currency(1))
Group sales volume 2,018 tonnes 1,737 tonnes +16% N/A
Group revenue £145.9m £139.3m +5% +8%
Average selling price (ASP) £72.3/kg £80.2/kg -10% -7%
Gross profit £64.3m £66.8m -4% +3%
Gross margin 44.1% 48.0% -390bps N/A
Underlying profit before tax (PBT)(1) £23.2m £28.0m -17% flat
Reported PBT £17.2m £3.3m +421% N/A
Underlying EPS(1) 22.6p 27.0p -16% N/A
EPS 17.4p 3.1p +461% N/A
Dividend per share 13.42p 13.42p flat N/A
Highlights:
• Volumes +16%, driven by VARs; first 2,000 tonne half-year since H2
2022
- H1 2025 Group sales volume 2,018 tonnes; up 16% vs prior year (Q2 up
14% vs Q2 24)
· VARs +30% & Transport down 2% (Aero +7%, Automotive down 4%)
· Electronics +17% and Energy & Industrial +15%
- H1 2025 Group revenue £145.9m, up 5% vs H1 2024 & up 8% in
constant FX
- Medical (implantable & non-implantable) flat at £30.2m; growth in
all non-Spine segments
- ASP £72.3/kg, impacted by sales mix (driven by VAR volumes) & FX
• Underlying PBT flat in constant FX; held back by sales mix &
China ramp-up
- H1 2025 Underlying PBT down 17% at £23.2m (H1 2024: £28.0m), flat in
constant currency
- H1 2025 Reported PBT £17.2m after £6.0m exceptional items (ERP costs
& Project Vista)
- FY 2025 currency headwind weighted to H1 (£5m FX impact in H1 at PBT
level)
- H1 2025 GM 44.1% due to mix, slower China ramp-up & FX; despite
improved asset utilisation
• Driving operational improvement through self-help actions
- Strong cost control: overheads(2) broadly flat ex wage inflation &
employee reward accrual
- Project Vista 'Go to Market' approach: driving sales excellence in
Sustainable Solutions
- Enhanced Medical structure: targeting new application growth in
non-implantable/pharma
- New ERP system launched; enabling enhanced digital solutions &
'cost to serve' opportunities
• Major milestone for 'Magma' mega-programme
- TechnipFMC contract award from Petrobras; supporting scale-up for
'Magma' (composite pipe solution for energy industry based on Victrex(TM)
PEEK)
• Further improvement in cash generation
- Improved underlying operating cash conversion(1) of 128% (H1 2024:
64%)
- H1 2025 net debt £40.7m (H1 2024: £49.8m) (including cash of £25.4m
after payment of FY 2024 final dividend (H1 2024: £28.5m))
- Further inventory reduction; £12.3m YoY reduction to £114.4m (H1
2024: £126.7m)
- Lower cash capital expenditure at £8.6m (H1 2024: £21.8m) after
investment phase completed
- Interim dividend maintained at 13.42p/share
(1) Alternative performance measures are defined in note 13
(2) ( )Underlying operating overheads(1)
STRONG FOUNDATIONS - IMPROVEMENT ACTIONS - NAVIGATING UNCERTAINTY
Commenting on the results, Jakob Sigurdsson, Chief Executive of Victrex, said:
H1 volumes up 16%: softer mix
"With sales volumes up 16%, Sustainable Solutions saw good year on year and
sequential improvement across most end-markets. VARs was the key driver of
volume growth, impacting sales mix. Like for like pricing, excluding sales mix
and currency, was robust across our end-markets outside of VARs.
"Medical revenues were broadly flat due to ongoing inventory management
amongst major medical device companies and some lingering impact from Volume
Based Pricing (VBP) in China, primarily in Spine. Pleasingly, we saw good
growth in all segments outside of Spine, with non-Spine growing above the
levels of our record year for Medical in FY 2023. However, visibility remains
low on the speed of broader Medical recovery and its benefit for our second
half. We continue to monitor for recovery on a customer by customer basis. In
non-implantable Medical, including pharmaceutical applications, we now have
several new opportunities.
Driving operational improvement
"Cost control remains strong, with underlying operating overheads broadly flat
excluding wage inflation. With strong foundations in place following
completion of our recent asset investments and upgrades, we are also taking a
number of improvement actions to help underpin near-term profitability and
navigate a clearer pathway towards growth. These include Project Vista, which
is driving an improved Go to Market strategy, supporting good progress in our
Sustainable Solutions business. Procurement efficiency is also a key area of
focus.
Gross margin and PBT impacted by FX, sales mix and China operational
challenges
"Gross margin & underlying PBT was lower, impacted by a sizeable FX
headwind of £5m in the first half, a subdued performance in Medical and
adverse sales mix. Our China facility contributed £4m to the reduction in
profit year-over-year, more than anticipated as it experienced initial
operational challenges. We have actions in place to support operational
improvement in H2, with other headwinds also expected to ease.
Key milestone for 'Magma'
"We remain on track to deliver a step-up in our mega-programme revenues this
year. The key milestone in H1 was a technological order from Petrobras to
TechnipFMC, supporting scale-up for 'Magma' - a composite pipe for the energy
industry - with an uptick in Victrex volumes expected from FY 2026, and
sizeable long-term volumes thereafter.
Outlook - upgrading volume guidance; Medical, FX & China headwinds to H2
PBT growth
"Macroeconomic uncertainty is likely to continue for the remainder of FY 2025.
Whilst the majority of Victrex's product portfolio is currently exempt from
incremental US tariffs, we are mindful of the potential impact on global sales
demand. Volume momentum remains positive and we are slightly upgrading our
volume guidance to high-single digit volume growth for the full year,
reflecting the volume strength seen in H1.
"We are targeting a substantial improvement in H2 PBT compared to H1. This is
supported by the typical second-half weighting of profits, as well as the
current volume momentum driven by Sustainable Solutions. In Medical, we expect
continued growth in non-Spine, and we are monitoring closely for signs of
improvement in Spine. Operational improvement in our China manufacturing
facility is progressing, however, the full year profit headwind will be higher
than previous guidance. These factors, and other previously guided headwinds,
including FX, will constrain PBT growth for H2, compared to H2 2024, though we
expect these to ease into the next financial year. Given macro-uncertainty,
together with the effects noted, we have a range of outcomes for full year
profit. For H2, our target is to deliver PBT similar to H2 2024, driving some
PBT growth in constant currency on a full year basis.
"Victrex has a strong and diversified core business, supported by improvement
actions, well-invested assets, increasing mega-programme commercialisation,
and the opportunity for continued cashflow improvement."
About Victrex:
Victrex is an innovative world leader in high performance polymer solutions,
focused on the strategic markets of automotive, aerospace, energy &
industrial, electronics and medical. Every day, millions of people use
products and applications which contain our sustainable materials - from
smartphones, aeroplanes and cars to energy production and medical devices.
With over 40 years' experience, we develop world leading solutions in PEEK and
PAEK based polymers, semi-finished and finished parts which shape future
performance for our customers and our markets, enable environmental and
societal benefits, and drive value for our shareholders. Find out more
at www.victrexplc.com (http://www.victrexplc.com)
A presentation for investors and analysts will be held at 9.00am (UK time)
this morning via a dial-in facility, which can be accessed by registering on
the following link:
Victrex Interim Results Meeting May 2025 Registration Page!
(https://registrations.events/direct/LON703266)
The presentation will be available to download from 8.30am (UK time) today on
Victrex's website at www.victrexplc.com (http://www.victrexplc.com) under the
Investors/Reports & Presentations section.
Victrex plc:
Andrew Hanson, Director of Investor Relations, Corporate Communications & +44 (0) 7809 595831
ESG
Ian Melling, Chief Financial Officer +44 (0) 1253 897700
Jakob Sigurdsson, Chief Executive +44 (0) 1253 897700
Interim results statement for the 6 months ended 31 March 2025
Strong volume growth & FY volume guidance upgraded
PBT held back by FX, China & mix; strong cash conversion
Volume (t) Revenue (£m)
H1 2025 H1 2024 Growth H1 2025 H1 2024 Growth
Transport (Aero & Auto) 524 532 -2%
Electronics 222 190 +17%
Energy & Industrial 323 280 +15%
VARs 862 662 +30%
Sustainable Solutions 1,931 1,664 +16% 115.7 108.8 +6%
Medical 87 73 +19% 30.2 30.5 -1%
Total Group 2,018 1,737 +16% 145.9 139.3 +5%
Operating review
Positive volume momentum; H1 volumes up 16%
Group sales volume of 2,018 tonnes was 16% up on the prior year (H1 2024:
1,737 tonnes) and up 14% in Q2 (Q2 volumes of 1,120 tonnes vs Q2 2024: 986
tonnes), driven by Sustainable Solutions and the end-markets of Aerospace,
Electronics, Energy & Industrial and Value Added Resellers ('VARs').
Automotive remained subdued.
We are upgrading our guidance for volume growth for the full year, from
mid-single digit to high-single digit growth.
Revenue up 5% offset by sales mix and currency
Positive trading momentum helped drive H1 2025 Group revenue up 5% to £145.9m
(H1 2024: £139.3m) and up 8% in constant currency. Revenue growth lagged
volume growth as incremental sales came at lower than average ASPs, driven
predominantly by VARs.
Divisional performance
New Medical reporting structure
With new and emerging opportunities within non-implantable Medical, including
in pharmaceutical related applications, we now report Medical revenues and
gross profit comprising both implantable and non-implantable volumes
(non-implantable volumes were previously reported within Sustainable
Solutions).
Sustainable Solutions
Half year revenue in Sustainable Solutions was up 6% at £115.7m (H1 2024
(restated): £108.8m), after a solid start to the year, driven by VARs. We
also saw some initial benefits from Project Vista and organisational changes,
including a more regionally focused sales structure with enhanced digital
solutions to support customers and key account management capabilities.
Medical
Medical revenues continue to be impacted by industry destocking, particularly
in Spine although we saw good year on year growth in all non-Spine segments,
including 32% growth in Cranio Maxilo Facial (CMF). Most of the major medical
device customers have continued to report high inventory levels, despite a
healthy growth rate in clinical procedures. The latest industry indicators
suggest some improvement during H2 2025, and we continue to carefully monitor
with our customers, although visibility remains low.
Medical revenues at the half year of £30.2m were down 1% on the prior year
(H1 2024 (restated): £30.5m). Medical implantable revenues - as previously
reported individually - were flat.
Across our core Medical business, we continue to see good growth opportunities
once destocking headwinds clear, with support from increasing penetration in
Cardio, Orthopaedics and Drug Delivery. Revenues in Medical were 25% Spine and
75% non-Spine (H1 2024 (restated): 39% Spine and 61% non-Spine).
ASP impacted by FX headwinds and sales mix
Average selling price ('ASP') was below our guidance at £72/kg, down 10% on
the prior year due to the impact of sales mix, with weaker Medical and
improvement in VARs (alongside end market sales mix across both divisions) and
currency moving adversely during the year. Like-for-like pricing was robust
across most end markets, excluding VAR which is typically where we see more
competitive pricing, in what is a lower cost to serve model, with long
standing customer relationships. ASP in constant currency was down 7%.
For FY 2025, average selling prices are expected to be in the £72/kg -
£75/kg range reflecting sales mix and currency.
Sustainable product revenues
Our alignment to megatrends like CO2 reduction, energy efficiency and clinical
innovation supports the use of Victrex(TM) PEEK, enabling environmental and
societal benefit for our customers. These typically focus on Aerospace,
Automotive and Medical, with some applications in Electronics (energy
efficiency) also being part of our measure of sustainable product revenues(2).
In H1 2025, 55% of our revenues were based on sustainable products (H1 2024:
58%), with the growth in Aerospace being offset by lower Medical revenues.
VARs is excluded from sustainable product revenues.
Project Vista: underpinning profitability & business improvement
Whilst trading conditions remained mixed during H1 2025, our 'self-help' and
improvement actions remain strong, including cost control, with underlying
operating overheads in H1 2025 broadly flat excluding wage inflation and
employee reward.
Our Project Vista programme is enhancing how we Go to Market and serve our
customers, through digital tools, R&D digitalisation and a more regional
focus to our sales teams. We are already seeing an initial return on these
improvements in our Sustainable Solutions business and look forward to further
progress across the Group.
Mega-programmes: major 'Magma' milestone
In FY 2024, mega-programme revenues totalled £10.2m and we are targeting a
step-up this year, driven by continued progress in Aerospace and a broader
customer offering in Trauma.
Our mega-programmes are defined as potential game changing projects in the
end-markets we serve. Each mega-programme offers revenue potential of at least
(and in some cases significantly more than) £50m per year.
H1 2025 key milestones in our mega-programme portfolio included:
Aerospace Composites: final qualifications completed with OEMs for our
LMPAEK(TM) grade, with increasing 'use cases' supporting much larger
applications within future aircraft. Near-term opportunities include retrofit
or 'running changes' as existing models take advantage of selected
thermoplastic composite parts to drive fuel efficiency and manufacturing
efficiency, for example in engine housings and interior structures or other
applications. We also have new business in Advanced Air Mobility (AAM) to
support short to medium term growth, as AAM applications focus on lightweight
and durable materials.
In E-mobility, our applications include in wire coatings where our VICTREX
XPI(TM) polymer grades can replace enamels used in coatings, avoiding harsh
solvents and offering performance benefits and efficiency. Whilst more 800
volt batteries are launched on E-mobility platforms this year, slower adoption
rates in EVs is likely to moderate revenue progress. Our materials will be
supporting a range of Automotive brands, including those in China and Europe.
Magma, our composite pipe for the energy industry, offers a potential
game-changing solution, with light-weighting, durability, a reduced carbon
footprint for installation and ease of manufacturing being key parts of the
proposition. Following the award of the ETEC contract order by Petrobras to
TechnipFMC, we anticipate volumes starting to scale up from 2026 onwards,
subject to the final commercial roadmap between TechnipFMC and Petrobras.
In Trauma, revenue is targeted to increase in this programme during FY 2025,
beyond the £1m level of last year. Victrex manufactures the PEEK composite
based trauma plates in-house, or via our partner. We have added new
customers in Asia.
In our PEEK Knee programme, we are targeting the first commercial PEEK Knee in
the market during 2025. Site recruitment for a US clinical trial is also
progressing, targeting 120 patients, with the first US Knee implant expected
shortly.
PEEK Knee would be an alternative to existing implants, which primarily use
metal (cobalt chrome), with a proportion of customers impacted by metal
sensitivity or discomfort. PEEK Knee continues to be the largest of our
mega-programme opportunities by annual revenue potential.
Innovation investment - the Group is on track for R&D investment of 5-6%
of revenues this year. With our strategic goal to increase the proportion of
Medical revenues in our portfolio - to reduce cyclicality and enhance earnings
stability - the focus of innovation investment remains in our Medical
Acceleration programme.
Financial review
Gross profit slightly down; up 3% in constant FX
Gross profit was down 4% at £64.3m (H1 2024: £66.8m), driven by currency, a
softer sales mix and increased costs from initial operating challenges in our
new China facility (including annualised depreciation costs), and wage
inflation. Gross profit was up 3% in constant currency. We will continue to
see some positive impact from higher asset utilisation, alongside the benefit
of lower raw material prices. Higher asset utilisation in our UK facilities
represented a tailwind in H1 2025 of approximately £2.6m. Production levels
in FY 2025 are expected to be approximately 20% higher than FY 2024, with
production more closely matching sales, and a slower rate of inventory unwind
than seen in FY 2024.
Gross margin lower on sales mix, currency and China costs; expecting FY
improvement
Half year Group gross margin of 44.1% was 390 basis points ('bps') lower than
last year (H1 2024: 48.0%), driven by a softer sales mix within Sustainable
Solutions, initial operational challenges of China ramp-up and a sizeable
currency headwind. Excluding our China manufacturing facility, gross margin
was 46.6%.
In the second half, based on some Medical recovery and the benefit of lower
manufactured cost (improved asset utilisation and lower raw material prices),
gross margin is expected to show some improvement. On a full year basis, we
anticipate full year gross margin will now be lower than our guidance level of
approximately 50%, in a range of 45-47%. This guidance reflects the impact of
sales mix on ASP (VAR driving performance in Sustainable Solutions, and growth
in non-Spine within Medical) and operational challenges in our China
manufacturing facility.
Our focus continues to be on a mid-to-high fifty percent gross margin level
over the medium term, whilst noting that sales mix, asset utilisation, China
ramp-up and the expected increase in parts contribution to revenue will play a
key role over the coming years.
China facilities; initial operational challenges & slower ramp-up
Commercial production commenced for our Victrex Panjin manufacturing facility
in China during the second half of last year, with H1 2025 seeing the
annualised cost impact, including depreciation. This facility is an important
strategic and geographic play for Victrex over the medium term and beyond. The
facility will help to broaden our portfolio of PEEK grades, with a new
'Elementary' type 2 PEEK polymer grade. Automotive, Electronics and VAR
end-markets offer attractive long-term opportunities in this region, with both
existing and new customers. However, ramp-up has been slower than our
expectations, primarily driven by initial manufacturing challenges in
increasing scale. We are tackling these challenges and expect to be able to
deliver in line with demand by the end of the year. End market demand for
domestic made product remains robust in China. We now expect our sales
volume from this facility will be closer to 50 tonnes in FY 2025, compared to
our original expectations of 100-200 tonnes. This will result in an additional
profit headwind of up to £2m in FY 2025, compared to our initial
expectations.
Operating efficiency in these assets - comprising polymer production and
compounding facilities - will improve over the coming years as volumes ramp-up
from current levels. Our taskforce to improve the facility, after initial
operational challenges, is in place and making progress.
Gains & losses on foreign currency net hedging
Fair value gains and losses on foreign currency contracts in H1 2025 were a
gain of £2.2m (H1 2024: gain of £2.5m), arising from contracts where the
deal rate obtained in advance was favourable to the average exchange rate
prevailing at the date of the related hedged transactions. We continue to
hedge the net currency exposure, which reflects the diversity of our customer
and cost base across regions.
Our hedging policy is kept under review, for the duration of hedging, level of
cover and currencies covered. It requires that at least 80% of our US Dollar
and Euro forecast cash flow exposure is hedged for the first six months, then
at least 75% for the second six months of any rolling twelve-month period.
Sizeable currency headwind for FY 2025
FY 2025 will see a sizeable currency headwind of approximately £8m-£9m at
PBT, based on spot rates and currency contracts in place at the date of this
report. Unhedged currencies - predominantly in Asia - are also set to increase
in importance as we see further growth in China and other parts of Asia over
the coming years. With the recent strengthening of Sterling, particularly
against the US dollar, early implications for FY 2026 suggest a small headwind
from currency.
Underlying operating overheads(1) up 5%; overheads broadly flat excluding wage
inflation & employee reward
Underlying operating overheads, which exclude exceptional items of £6.0m,
increased by 5% to £40.3m (H1 2024: £38.4m) with a focus on tight cost
control, offset by targeted innovation investment, wage inflation and bonus
accrual. Excluding wage inflation and employee reward, underlying operating
overheads were broadly flat. Tight cost control prevails, including on
recruitment, travel and reductions in discretionary spend. We retain
additional cost options should the macro-environment deteriorate.
In the second half we will incur the additional expense from the employer
increase to National Insurance (NI) contributions for our UK employees, which
is expected to be approximately £1m per annum.
Going forward, our intention is to keep investment targeted and to deliver an
appropriate return. Underlying operating overheads are therefore expected to
show only limited increases, excluding the effect of wage inflation and bonus
accrual.
Net interest expense
Interest payments for our China loan started to be expensed (rather than
capitalised) from H2 2024, resulting in a net interest expense of £0.8m in H1
2025 (H1 2024 - net interest expense of £0.4m). There is expected to be an
expense of approximately £2m in FY 2025, based on currently prevailing
interest rates.
Underlying PBT down on FX, China costs, Medical and mix
Underlying PBT of £23.2m was down 17% (H1 2024: £28.0m). The continuing
impact of Medical destocking, an adverse sales mix (across both divisions) and
some price pressure in VARs resulted in a weaker drop through to PBT, despite
the positive top line momentum. Whilst operating efficiency overall was
slightly improved compared to H1 2024 - as we saw improved asset utilisation -
costs from our China facility were higher than our expectations, as we saw
initial operational challenges and a slower ramp-up. Currency was also a
headwind to underlying PBT of £4.6m in H1 2025 and is expected to be ay
headwind of £8m-£9m at PBT level on a full year basis.
Reported PBT up 421%
Reported PBT increased by 421% to £17.2m (H1 2024: £3.3m) as we saw a much
lower proportion of exceptional items compared to the prior year. This
reflects exceptional items of £6.0m in total (H1 2024: £24.7m), mainly
comprising ERP system costs, with our Microsoft D365 system being successfully
implemented during Q2.
Lower exceptional items
FY 2025 will see the final costs of implementing our ERP system, and
associated business improvements, with the majority of costs incurred during
the first half. With benefits from our Project Vista programme helping
support and underpin mid-term profitability, these costs will be treated as an
exceptional item, with total costs, including consultancy, expected to be less
than £10m for the year as a whole.
Earnings per share up 461%
Basic earnings per share ('EPS') of 17.4p was 461% up on the prior year (H1
2024: 3.1p per share), reflecting the improvement in reported PBT, including
the effect of exceptional items being lower. Underlying EPS was down 16% at
22.6p (H1 2024: 27.0p).
Taxation
The total tax charge was £3.6m (H1 2024: £0.8m) giving an effective tax rate
of 21.2% (H1 2024: 24.5%), lower than the prior year, but higher than the
mid-term guidance range due to the impact of a lower proportion of profits
being eligible for the patent box rate.
Our mid-term guidance for an effective tax rate is approximately 14%-18%. In
FY 2025 the effective rate will exceed the top end of the range, with
unrecognised China losses and the proportion of UK profits available for
patent box being the key drivers. We continue to monitor global taxation
developments and their impact on the effective rate.
Robust balance sheet
With a strong balance sheet to support our global customers, we have
demonstrated the ability to invest and support security of supply over recent
years, through a major capital investment phase which has now concluded. Net
assets at 31 March 2025 totalled £433.8m (H1 2024: £460.8m).
ROIC(1)
We focus on Return on Invested Capital ('ROIC') as one of our strategic KPIs.
We continue to enjoy strong returns compared to the broader Chemical sector,
with our 5 year average ROIC at 16% (based on FY 2020 - FY 2024).
Inventory moving closer to FY 2025 target
The increased inventory required for our UK Asset Improvement programme
started to be unwound during FY 2024. H1 2025 closing inventory was £114.4m,
reflecting further progress towards our target of approximately £100m by the
end of FY 2025. Whilst this goal of approximately £100m is higher than
historic levels, it reflects the broader business and geographic portfolio,
including an increased range of polymer grades, product forms and parts to
serve a wider customer base. Despite further inventory unwind in FY 2025, our
planned production levels will be approximately 20% higher, supporting
operating efficiency and gross margin.
Capital expenditure reducing; well-invested assets
Following a period of substantial investment in assets and capability - both
in the UK and China - we have well invested assets that underpin our future
growth programmes and increasingly differentiated portfolio. As a result, cash
capital expenditure reduced to £8.6m (H1 2024: £21.8m) and we anticipate
capital expenditure on a full year basis being around the lower end of our
8-10% of Group revenues guidance.
Over the coming years, investment will include increased ESG related capital
spend in our manufacturing facilities, to support decarbonisation, subject to
available technology. Current ESG related capital expenditure remains
relatively small and is primarily for our Continuous Improvement ('CI')
activities. Options to phase investment in support of decarbonisation
programmes are being assessed, whilst noting our existing SBTi validated
decarbonisation targets, including our interim target of a 50.1% reduction in
Scope 1 & Scope 2 market-based emissions by 2032, from a baseline set in
FY 2022.
Overall capital expenditure guidance remains at approximately 8-10% of
revenues for the coming years.
Operating cash conversion of 128%
Cash generated from operations was ahead of the prior year, at £34.6m (H1
2024: £34.1m). As a result, and with lower capital expenditure, underlying
operating cash conversion(1) was 128% (H1 2024: 64%). With a highly
cash-generative business model, we expect to see a continuing improvement in
absolute cash generation.
In February 2025 we paid the 2024 final dividend of 46.14p/share at a value of
£40.1m. Net debt at 31 March 2025 was £40.7m (H1 2024: £49.8m), including
cash of £25.4m (H1 2024: £28.5m). The Group utilised its UK RCF and China
bank facility borrowings - put in place for the investment in new China
manufacturing assets - during the first half. Borrowings, including lease
liabilities, at 31 March 2025 were £66.1m (H1 2024: £78.3m, FY 2024:
£50.4m) including £15.0m drawn on the RCF.
Interim dividend maintained
The Board has proposed to maintain the interim dividend at 13.42p/share (H1
2024: 13.42p/share interim dividend), which reflects the balance of mixed
trading with expectations of profit growth in H2 2025. We intend to grow the
regular dividend in line with earnings growth once underlying dividend cover
returns closer to 2.0x.
Capital allocation policy
Whilst growth investment remains the focus for the Group, including the option
of M&A focused on technology to support and underpin our mega-programmes,
or adjacent high performance materials that complement and enhance our PEEK
offering, we also note the opportunity for additional shareholder returns. As
cashflow continues to improve, share buybacks remain an option for future
shareholder returns, alongside special dividends, within our capital
allocation policy.
Whilst the Group had a modest drawdown of its RCF, the prospects for improving
cashflows, and reducing net debt as trading improves, are positive. Capital
expenditure reduction and inventory unwind also support improved cashflows
over the medium term.
Culture of innovation recognised in Britain's Most Admired Companies and FTSE
Women Leaders
With our investment in people, assets and capability over recent years, we
have a motivated, innovative and engaged workforce. Victrex was pleased to be
recognised in Britain's Most Admired Companies list, receiving 3(rd) place in
Chemicals. As a recognition of progress developing females in leadership
roles, as well as our Board being comprised of 56% women, we were also named
as 4(th) in the FTSE 250 for Women in Leaders and Women on Boards.
Jakob Sigurdsson
Chief Executive, 12 May 2025
1 Alternative performance measures are defined in note 13
2 Sustainable revenues as a % of total revenues is a other internal metric
calculated as the % of revenue earned from sustainable products, which are
defined as those which offer a quantifiable environmental or societal benefit.
These are primarily in automotive and aerospace (supporting CO2 reduction) but
also in energy and industrial and electronics (e.g. wind energy applications,
or those which support energy efficiency) and medical (both implantable and
non-implantable), supporting better patient outcomes.
DIVISIONAL REVIEW
Sustainable Solutions
6 Months 6 Months
Ended Ended %
31 Mar 31 Mar % Change
2025 2024* Change (constant
£m £m (reported) currency)
Revenue 115.7 108.8 6% 10%
Gross profit 40.8 42.1 -3% 5%
*Restated to reflect non-implantable medical reclassification from Sustainable
Solutions to Medical segment (see Note 4).
The Group reports divisional performance through Sustainable Solutions and
Medical. An end-market based summary of our performance and growth
opportunities continues to be provided. Within Sustainable Solutions
end-markets, we have Electronics, Energy & Industrial, Transport
(Automotive & Aerospace) and Value Added Resellers ('VARs').
With an enhanced regional focus, as well as end-market focus, and a
reorganisation in our Go to Market strategy as part of Project Vista,
Sustainable Solutions saw improvement in revenue during the first half.
Good volume momentum, softer sales mix
After a solid start to the year, revenue in Sustainable Solutions continued to
see positive momentum during the first half, with H1 2025 revenue up 6% at
£115.7m (H1 2024 (restated): £108.8m). This was supported by improvement in
Aerospace, Electronics, Energy & Industrial and VAR.
Revenue in constant currency was up 10%. Pricing remained relatively robust,
although we saw the impact of faster growing VARs volumes influencing sales
mix through the year, together with some price pressure in this area. VARs
remains our lowest cost to serve end-market, with limited R&D and a
low-touch business model to support long-term customers in this area. VARs
customers convert our materials into stock shapes or compounds for onward
processing in several end-markets.
Although we saw improved asset utilisation, gross margin was lower at 35.3%
(H1 2024 (restated): 38.7%) impacted by annualised costs for our China
facility, sales mix, together with a sizeable currency headwind.
Electronics
During the first half, we saw some improvement in the Global Semiconductor and
Consumer Electronics markets (which together make up approximately two-thirds
of our exposure in this end-market), Electronics sales volumes grew 17% at 222
tonnes (H1 2024: 190 tonnes), though we did see some slowing of demand in Q2.
Industry forecasts continue to suggest an improvement for Semiconductor in
2025, with ING Think forecasting Semiconductor demand to increase by 9.5%,
driven by data centres and increasing adoption of AI applications.
Victrex's core applications include CMP rings (for Semiconductor), as well as
newer applications utilising PEEK, including for Semiconductor, 5G, cloud
computing and other extended application areas. The increased level of data
usage in society, AI and cloud-based services is supportive to long-term
growth in this end-market, though we are mindful of the short-term demand
cycle. Our Aptiv(TM) film business supports small space acoustic applications
including in speaker diaphragms and related components, where we also saw an
improvement driven by application growth and consumer demand. Next generation
smartphones are already using increased Aptiv(TM) content to support increased
functionality.
Energy & Industrial ('E&I')
Victrex(TM) PEEK has a long-standing track record of durability and
performance benefit in many demanding Oil & Gas applications, where
lightweighting, durability and performance are key. The trend of metal
replacement in demanding applications remains important. In recent years,
E&I has also been developing broader business across energy applications.
These include in wind energy and opportunities in hydrogen. We now have a
small but growing proportion of revenue coming from wind and renewable based
applications. Sales volume of 323 tonnes was up 15% on the prior year (H1
2024: 280 tonnes), reflecting improvement in energy, offset by continuing
weakness across General Industrial (which makes up more than half of this
segment).
Our development of Victrex(TM) PEEK as a PFAS (Per and Polyfluoroalkyl
chemicals) alternative continues to make good progress. Industry concerns
around PFAS has sparked global action. Regulators across the UK, EU and the US
are proposing to ban or restrict PFAS substances to only a few critical uses.
Manufacturers using these products are looking to find safer alternative
materials, without compromising product performance with Victrex(TM) PEEK well
placed.
Transport (Automotive & Aerospace)
Victrex materials support "Avoided emissions" through underpinning CO2
emission reduction, which is a key megatrend. Across Aerospace and Automotive,
our materials offer lightweighting, durability, dielectric properties and heat
resistance.
Overall Transport sales volume was down 2% to 524 tonnes (H1 2024: 532
tonnes), with Aerospace up 7% and Automotive down 4%, the latter against a
tougher comparative. This performance reflects continuing increases in plane
build as the Aerospace industry recovers post-pandemic, as well as incremental
business from China. In Automotive, industry forecasts have been revised
down so far in 2025, with increasing tariffs and lack of demand both being key
factors. S&P Global forecasts car production in 2025 of 2% growth.
Automotive
The majority of Victrex's application areas will transition between internal
combustion engine ('ICE') platforms and electric vehicles ('EVs'). Overall,
translation across ICE to EVs remains a net benefit opportunity, with current
Victrex PEEK content averaging around 11g per car. Our assessment of the EV
opportunity is for a long term potential of over 200g per electric vehicle
across several application areas.
In E-mobility, with a slower adoption for electric vehicles in many regions,
FY 2025 is expected to see a similar level of revenue, though new platforms
utilising PEEK, particularly around larger and higher voltage batteries,
support mid-term growth. Applications include wire coatings, slot liners and
rotor sleeves, where the insulative properties of Victrex(TM) PEEK suit the
more demanding performance requirements. China is a particular focus area,
with qualifications in place or in progress.
Aerospace
Aerospace volumes were up 7%, reflecting the benefit of plane build continuing
to increase and new business in China. The latest indicators for long-term
plane build forecasts 42,000 new or replacement aircraft by 2043 (source:
Airbus). With manufacturing speed and efficiency a key driver, Victrex(TM)
PEEK's offering to support faster cycle times in part manufacture positions us
well. We continue to enjoy good application growth in Aptiv(TM) film and
also our LMPAEK(TM) grade (and use as composite tape).
COMAC in China is forecasting a ramp up of production for the C919 model over
the coming years, including doubling plane build in 2025 (vs 2024).
Victrex(TM) PEEK supports a broad range of aircraft platforms, with one of the
highest production models being the Boeing 737-Max, as well as higher content
models such as the Airbus A350.
Overall, the mid-term outlook for Aerospace remains positive. Short to
mid-term opportunities include Advanced Air Mobility (AAM), where lighter
materials and strength are key requirements. Victrex is building development
collaborations, which are beginning to move towards supply contracts, helping
to drive growth in this attractive area.
Value Added Resellers ('VARs')
VARs process PEEK into stock shapes or compounds, for onward sale into
multiple supply chains. End market alignment, whilst difficult to fully track,
supports a similar alignment to our Sustainable Solutions end-markets, with
the exception of Aerospace, where sales volumes are largely direct to OEMs or
tier suppliers. Victrex regards VARs as a good barometer of the general
health of the supply chain and economic recovery, with customers processing
high volumes of PEEK.
With some macro improvement H1 volumes were up 30% to 862 tonnes (H1 2024: 662
tonnes). VARs remains the most price competitive of our Sustainable Solutions
end-markets.
Regional trends
The Group continues to report regional performance. North America saw the most
progress vs prior year, driven by a better performance in Energy &
Industrial. Europe also saw improvement as VAR drove a better first half, with
Asia-Pacific also ahead, supported by Electronics.
Europe was up 10%, at 1,077 tonnes (H1 2024: 977 tonnes), driven by VARs
primarily. North America was up 41% at 359 tonnes (H1 2024: 254 tonnes),
reflecting Energy & Industrial, with Asia-Pacific up 15% at 582 tonnes (H1
2024: 506 tonnes).
Medical
6 Months 6 Months
Ended Ended %
31 Mar 31 Mar % Change
2025 2024* Change (constant
£m £m (reported) currency)
Revenue 30.2 30.5 -1% 1%
Gross profit 23.5 24.7 -5% -1%
*Restated to reflect non implantable medical reclassification from Sustainable
Solutions to Medical segment (see Note 4).
Medical strategy
To date, over 15 million patients have PEEK-OPTIMA™ based implanted devices.
With origins in Spine, our Medical strategy is broadening the range of
applications we serve, with good progress made across Arthroscopy, Active
Implantables and Drug Delivery, Cranio Maxilo Facial (CMF), Cardio - all of
which grew in H1 2025 - as well as our mega-programmes of Trauma and Knee.
Growing opportunities in non-implantable Medical
Building on the Project Vista led improvements in Sustainable Solutions, this
year we have begun targeting increasing opportunities in non-implantable
Medical, which was previously not a focus area. Applications in pharmaceutical
related opportunities are already offering us near-term growth potential. We
are now reporting Medical revenues as a combination of implantable and
non-implantable Medical (non-implantable revenues were previously reported
through Sustainable Solutions).
Medical Acceleration investment
With our New Product Development Centre in Leeds supporting customer scale up
in Trauma and Knee, we have assets and capability in place to support major
medical device companies. Our Knee programme includes collaboration with the
5(th) largest global Knee player, and negotiations for additional
collaborations with other top 4 companies.
Performance (Implantable & Non-implantable)
The trends seen across the medical device industry, as noted by a range of
companies supplying into this industry, continued to impact us through the
first half, as some customers further reduced their inventories from
historically high levels. This follows the build-up of product as surgeries
reopened after the COVID pandemic. Visibility on a broader recovery remains
low.
Our spine business continued to be most affected due to higher inventory
levels and the impact of Volume Based Procurement ('VBP') in China, which has
resulted in some changes in market share amongst customers as well as pricing
pressure. Spine was 25% of medical revenues in the half compared to 39%
(restated) in the comparable period in the prior year. Non-spine represented
75% of medical revenues.
Other (non-spine) medical revenues grew strongly in the half, reversing the
destocking trend and reaching levels above the non-spine revenues of FY 2023.
Going forward, with destocking easing and procedural growth remaining
healthy, the declines in spine are expected to ease, giving confidence in a
return to growth in total medical in the future led by non-spine indications.
Gross profit was £23.5m (H1 2024 (restated): £24.7m) and gross margin was
broadly stable at 77.8% (H1 2024: 81.0%), reflecting the impact of currency.
Geographically, Asia-Pacific and US revenues were flat, with Europe down 3%.
Progress on the Medical mega-programmes is covered in the operating review.
Diversifying our Medical business
Our focus on broadening applications in non-Spine has supported good growth
over recent years, offset by the impact of titanium 3D printed spinal cages
taking market share. Beyond applications like Arthroscopy and Cranio
Maxillo-Facial ('CMF'), we are seeing good traction in Cardio (PEEK used in
artificial hearts and heart pumps), as well as Active Implantable devices. CMF
revenues continue to progress and were up 32% vs H1 2024, driven by increasing
adoption versus the metal alternatives and lower industry inventory levels.
The increasingly diversified range of applications, with a lower dependence on
Spine, provides a stronger platform to drive future medical growth.
Condensed Consolidated Income Statement
Audited
(Restated) Year ended
Unaudited Unaudited 30 September 2024
Six months ended Six months ended
31 March 2025 31 March 2024
Note £m £m £m
Revenue 4 145.9 139.3 291.0
Gains on foreign currency net hedging 4 2.2 2.5 5.2
Cost of sales 4 (83.8) (75.0) (161.9)
Gross profit 4 64.3 66.8 134.3
Sales, marketing and administrative expenses* (36.7) (34.3) (71.0)
Research and development expenses (9.6) (8.7) (17.5)
Operating profit before exceptional items 24.0 28.4 60.3
Exceptional items* 5 (6.0) (4.6) (14.5)
Operating profit* 18.0 23.8 45.8
Financial income 0.3 0.3 0.7
Finance costs (1.1) (0.7) (1.9)
Result of associate* 5 - (20.1) (21.2)
Profit before tax and exceptional items 23.2 28.0 59.1
Exceptional items 5 (6.0) (24.7) (35.7)
Profit before tax 17.2 3.3 23.4
Income tax expense 6 (3.6) (0.8) (7.6)
Profit for the period 13.6 2.5 15.8
Profit/(loss) for the period attributable to:
Owners of the Company 15.2 2.7 17.2
Non-controlling interests (1.6) (0.2) (1.4)
Earnings per share
Basic 7 17.4p 3.1p 19.8p
Diluted 7 17.2p 3.0p 19.7p
Dividends (pence per share)
Interim 13.42 13.42 13.42
Final - - 46.14
13.42 13.42 59.56
An interim dividend of 13.42p per share will be paid on 27 June 2025 to
shareholders on the register at the close of business on 30 May 2025. This
dividend will be recognised in the period in which it is approved.
* The reclassification of £20.1m of exceptional items for the six months
ended 31 March 2024 from Sales, marketing and administrative expenses to
Result of associate is detailed in note 5.
Condensed Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 2025 31 March 2024 30 September 2024
£m £m £m
Profit for the period 13.6 2.5 15.8
Items that will not be reclassified to profit or loss
Defined benefit pension schemes' actuarial (losses)/gains (1.2) (1.1) 0.3
Income tax on items that will not be reclassified to profit or loss 0.3 0.2 (0.1)
(0.9) (0.9) 0.2
Items that may be subsequently reclassified to profit or
loss
Currency translation differences for foreign operations 1.4 (3.5) (6.7)
Effective portion of changes in fair value of cash flow hedges (1.5) 4.3 9.6
Net change in fair value of cash flow hedges
transferred to profit or loss (2.2) (2.5) (5.2)
Income tax on items that may be reclassified to profit or loss 0.9 (0.4) (1.1)
(1.4) (2.1) (3.4)
Total other comprehensive expense for the period (2.3) (3.0) (3.2)
Total comprehensive income/(expense) for the period 11.3 (0.5) 12.6
Total comprehensive (expense)/income for the period attributable to:
Owners of the Company 12.9 (0.3) 14.0
Non-controlling interests (1.6) (0.2) (1.4)
Condensed Consolidated Balance Sheet
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 2025 31 March 2024 30 September 2024
Note £m £m £m
Assets
Non-current assets
Property, plant and equipment 350.5 358.1 352.1
Intangible assets 16.7 17.9 17.1
Financial assets held at fair value through profit and loss 3.5 3.5 3.5
Financial assets held at amortised cost 1.0 0.8 1.0
Deferred tax assets 5.5 5.8 6.2
Retirement benefit asset 9.9 8.8 10.7
387.1 394.9 390.6
Current assets
Inventories 114.4 126.7 115.1
Current income tax assets 5.2 4.6 3.9
Trade and other receivables 47.5 48.7 45.8
Derivative financial instruments 9 2.9 3.6 7.3
Cash and cash equivalents 8 25.4 28.5 29.3
195.4 212.1 201.4
Total assets 582.5 607.0 592.0
Liabilities
Non-current liabilities
Deferred tax liabilities (40.7) (34.9) (40.8)
Borrowings 8 (46.7) (60.7) (32.9)
Long term lease liabilities 8 (7.7) (8.2) (8.3)
Retirement benefit obligations (2.3) (2.4) (2.5)
(97.4) (106.2) (84.5)
Current liabilities
Derivative financial instruments 9 (1.1) (0.1) (0.3)
Borrowings 8 (9.9) (8.0) (7.5)
Current income tax liabilities (0.8) (2.2) (2.2)
Trade and other payables (37.7) (28.3) (34.2)
Current lease liabilities 8 (1.8) (1.4) (1.7)
(51.3) (40.0) (45.9)
Total liabilities (148.7) (146.2) (130.4)
Net assets 433.8 460.8 461.6
Equity
Share capital 0.9 0.9 0.9
Share premium 62.1 62.0 62.1
Translation reserve (2.5) (0.7) (3.9)
Hedging reserve 1.1 2.0 3.9
Retained earnings 373.2 394.8 398.0
Equity attributable to owners of the Company 434.8 459.0 461.0
Non-controlling interest 10 (1.0) 1.8 0.6
Total equity 433.8 460.8 461.6
Condensed Consolidated Cash Flow Statement
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 2025 31 March 2024 30 September 2024
Note £m £m £m
Cash flows from operating activities
Cash generated from operations 12 34.6 34.1 88.7
Interest received 0.3 0.3 0.7
Interest paid (0.3) (0.4) (1.1)
Net income tax paid (3.5) (3.4) (4.3)
Net cash flow generated from operating activities 31.1 30.6 84.0
Cash flows (used in)/generated from investing activities
Acquisition of property, plant and equipment and intangible assets (8.6) (21.8) (32.6)
Withdrawal of cash invested for greater than three months - 0.1 0.1
Other loans granted - (0.4) (0.7)
Loan to associated undertakings - (1.3) (2.2)
Net cash flow used in investing activities (8.6) (23.4) (35.4)
Cash flows (used in)/generated from financing activities
Proceeds from issue of ordinary shares exercised under option - 0.2 0.2
Repayment of lease liabilities (1.1) (1.0) (1.9)
Bank borrowings received 21.7 30.6 33.8
Bank borrowings repaid (6.4) (0.8) (31.1)
Interest paid on capital-related bank borrowings (0.5) (0.6) (1.1)
Dividends paid (40.1) (40.1) (51.8)
Net cash flow used in financing activities (26.4) (11.7) (51.9)
Net decrease in cash and cash equivalents (3.9) (4.5) (3.3)
Effect of exchange rate fluctuations on cash held - (0.4) (0.8)
Cash and cash equivalents at beginning of period 29.3 33.4 33.4
Cash and cash equivalents at end of period 25.4 28.5 29.3
Condensed Consolidated Statement of Changes in Equity
Share capital Share premium Translation reserve Hedging reserve Retained earnings Total attributable to owners of the Company Non-controlling interest
Total
£m £m £m £m £m £m £m £m
Equity at 1 October 2024 (audited) 0.9 62.1 (3.9) 3.9 398.0 461.0 0.6 461.6
Total comprehensive income for the period
Profit for the period attributable to owners of the Company - - - - 15.2 15.2 - 15.2
Loss for the period attributable to non-controlling interest - - - - - - (1.6) (1.6)
Other comprehensive income/(expense)
Currency translation differences for foreign operations - - 1.4 - - 1.4 - 1.4
Effective portion of changes in fair value of cash flow hedges - - - (1.5) - (1.5) - (1.5)
Net change in fair value of cash flow hedges transferred to profit or loss - - - (2.2) - (2.2) - (2.2)
Defined benefit pension schemes' actuarial losses - - - - (1.2) (1.2) - (1.2)
Tax on other comprehensive (expense)/income - - - 0.9 0.3 1.2 - 1.2
Total other comprehensive income/(expense) for the period - - 1.4 (2.8) (0.9) (2.3) - (2.3)
Total comprehensive income/(expense) for the period - - 1.4 (2.8) 14.3 12.9 (1.6) 11.3
Contributions by and distributions to owners of the Company
Equity-settled share-based payment transactions - - - - 1.2 1.2 - 1.2
Tax on equity-settled share-based payment transactions - - - - (0.2) (0.2) - (0.2)
Dividends to shareholders - - - - (40.1) (40.1) - (40.1)
Equity at 31 March 2025 (unaudited) 0.9 62.1 (2.5) 1.1 373.2 434.8 (1.0) 433.8
Share capital Share premium Translation reserve Hedging reserve Retained earnings Total attributable to owners of the Company Non-controlling interest
Total
£m £m £m £m £m £m £m £m
Equity at 1 October 2023 (audited) 0.9 61.9 2.8 0.6 432.8 499.0 2.0 501.0
Total comprehensive income for the period
Profit for the period attributable to owners of the Company - - - - 2.7 2.7 - 2.7
Loss for the period attributable to non-controlling interest - - - - - - (0.2) (0.2)
Other comprehensive (expense)/income
Currency translation differences for foreign operations - - (3.5) - - (3.5) - (3.5)
Effective portion of changes in fair value of cash flow hedges - - - 4.3 - 4.3 - 4.3
Net change in fair value of cash flow hedges transferred to profit or loss - - - (2.5) - (2.5) - (2.5)
Defined benefit pension schemes' actuarial losses - - - - (1.1) (1.1) - (1.1)
Tax on other comprehensive (expense)/income - - - (0.4) 0.2 (0.2) - (0.2)
Total other comprehensive (expense)/income for the period - - (3.5) 1.4 (0.9) (3.0) - (3.0)
Total comprehensive (expense)/income for the period - - (3.5) 1.4 1.8 (0.3) (0.2) (0.5)
Contributions by and distributions to owners of the Company
Share options exercised - 0.1 - - - 0.1 - 0.1
Equity-settled share-based payment transactions - - - - 0.7 0.7 - 0.7
Tax on equity-settled share-based payment transactions - - - - (0.4) (0.4) - (0.4)
Dividends to shareholders - - - - (40.1) (40.1) - (40.1)
Equity at 31 March 2024 (unaudited) 0.9 62.0 (0.7) 2.0 394.8 459.0 1.8 460.8
Share capital Share premium Translation reserve Hedging reserve Retained earnings Total attributable to owners of the Company Non-controlling interest
Total
£m £m £m £m £m £m £m £m
Equity at 1 October 2023 (audited) 0.9 61.9 2.8 0.6 432.8 499.0 2.0 501.0
Total comprehensive income/(expense) for the year
Profit for the year attributable to owners of the Company - - - - 17.2 17.2 - 17.2
Loss for the year attributable to non-controlling interest - - - - - - (1.4) (1.4)
Other comprehensive (expense)/income
Currency translation differences for foreign operations - - (6.7) - - (6.7) - (6.7)
Effective portion of changes in fair value of cash flow hedges - - - 9.6 - 9.6 - 9.6
Net change in fair value of cash flow hedges transferred to profit or loss - - - (5.2) - (5.2) - (5.2)
Defined benefit pension schemes' actuarial gains - - - - 0.3 0.3 - 0.3
Tax on other comprehensive income - - - (1.1) (0.1) (1.2) - (1.2)
Total other comprehensive (expense)/ income for the year - - (6.7) 3.3 (0.2) (3.2) - (3.2)
Total comprehensive (expense)/income for the year - - (6.7) 3.3 17.4 14.0 (1.4) 12.6
Contributions by and distributions to owners of the Company
Share options exercised - 0.2 - - - 0.2 - 0.2
Equity-settled share-based payment transactions - - - - 0.2 0.2 - 0.2
Tax on equity-settled share-based payment transactions - - - - (0.6) (0.6) - (0.6)
Dividends to shareholders - - - - (51.8) (51.8) - (51.8)
Equity at 30 September 2024 (audited) 0.9 62.1 (3.9) 3.9 398.0 461.0 0.6 461.6
Notes to the Financial Report
1. Reporting entity
Victrex plc (the 'Company') is a public company which is limited by shares and
is listed on the London Stock Exchange. This Company is incorporated and
domiciled in the United Kingdom. The address of its registered office is
Victrex Technology Centre, Hillhouse International, Thornton Cleveleys,
Lancashire FY5 4QD, United Kingdom.
These condensed consolidated interim financial statements (the "Financial
Report") as at and for the six months ended 31 March 2025 comprise those of
the Company and its subsidiaries (together referred to as the 'Group').
This Financial Report is an interim management report as required by DTR 4.2.3
of the Disclosure and Transparency Rules of the UK Financial Conduct
Authority.
The comparative figures for the financial year ended 30 September 2024 are
extracted from the Group's statutory financial statements for that year
(referred to as the '2024 Annual Report'). The 2024 Annual Report has been
reported on by the Group's auditor, filed with the Registrar of Companies and
is available on request from the Group's Registered Office or to download from
www.victrexplc.com (http://www.victrexplc.com) . The auditor's report on 2024
Annual Report was unqualified, did not include a reference to any matters to
which the auditor drew attention by way of emphasis without qualifying their
report and did not contain any statement under sections 498 (2) or (3) of the
Companies Act 2006.
The Financial Report is unaudited and was approved for issue by the Board of
Directors on 12 May 2025.
2. Basis of preparation
The Financial Report for the half-year reporting period ended 31 March 2025
has been prepared in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006 and in accordance
with the UK-adopted International Accounting Standard 34, 'Interim Financial
Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
This Financial Report does not constitute statutory accounts within the
meaning of Section 43 of the Companies Act 2006 and do not include all of the
notes of the type normally included in an annual financial report.
Accordingly, this report is to be read in conjunction with the 2024 Annual
Report, which has been prepared in accordance with UK-adopted International
Accounting Standards and with the requirements of the Companies Act 2006.
Climate change
The Group's assessment of the impact of climate change was detailed on page
152 of the 2024 Annual Report. This review was made in line with the
requirements of the Task Force on Climate Related Financial Disclosures (TCFD)
and with specific consideration of the disclosures made in the Sustainability
report in the 2024 Annual Report. From the work undertaken at that time, the
Directors concluded that there had been no material impact on the financial
statements for the year ending 30 September 2024 from the potential impact of
climate change. Whilst the Group's analysis on the impact of climate change
continues to evolve, the Directors are not aware of any changes in
circumstance or situation, particularly in the areas reviewed, that would
change the outcome of this assessment at this time, and therefore the same
conclusion continues to be appropriate for the period ending 31 March 2025.
Use of Judgements and estimation uncertainty
The Group uses estimates and assumptions in applying the critical accounting
policies to value balances and transactions recorded in the financial
statements. The estimates and assumptions that, if revised, would have a
significant risk of a material impact on the valuation of assets and
liabilities within the next financial year were the same as that applied to
the consolidated financial statements for the 2024 Annual Report, being
retirement benefits and the valuation of inventory.
Consistent with the 2024 Annual Report, the Directors also consider that the
application of the exceptional items accounting policy involves significant
judgements. Further details of the exceptional items are disclosed in note 5.
There are no other judgements that the Directors have made in the process of
applying accounting policies that would have a significant effect on the
amounts recognised in the financial statements.
Going Concern
The Directors have performed a robust going concern assessment including a
detailed review of the business' 24-month rolling forecast and consideration
of the principal risks faced by the Group and the Company, as detailed on
pages 38 to 42 of the FY 2024 Annual Report. This assessment has paid
particular attention to current trading results and the economic uncertainty
created by recent changes impact of the ongoing global economic challenges on
the aforementioned forecasts.
The company maintains a strong balance sheet providing assurance to key
stakeholders, including customers, suppliers and employees. The Group had
net debt of £40.7m at 31 March 2025, an increase of £19.6m from 30 September
2024, and a reduction from £9.1m at 31 March 2024. The increase in net debt
since September 2024 relates to the payment of the final regular dividend in
February 2025 of £40.1m. The group continued to be cash generative during
the period with cash generated from operations of £34.6m (6 months ended 31
March 2024 - £34.1m) and capital expenditure, £8.6m (6 months ended 31 March
2024 - £21.8m), being carefully managed whilst still delivering key
programmes. Underlying operating cash conversion improved to 128%, a
significant improvement on the six months ended 31 March 2024 of 64%,
supported by the lower capital expenditure. The Group drew on its UK
revolving credit facility ahead of paying the final dividend, with a maximum
drawn down of £18.0m, which had been reduced to £13.0m by the date of this
report. The Group maintains a cash balance sufficient to manage short term
liquidity and provide headroom against ongoing trading volatility. The cash
balance at 31 March 2025 was £25.4m. Approximately 40% is held in the UK,
on instant access, where the company incurs the majority of its expenditure.
At the date of this report, the Group has drawn debt of £33.4m in its Chinese
subsidiaries (with a total facility of £44m available until December 2026)
and has unutilised UK banking facilities of £47m through to October 2027, of
which £27m is committed and immediately available and £20m is available
subject to lender approval.
The 24-month forecast is derived from the company's Integrated Business
Planning ('IBP') process which runs monthly. Each area of the business
provides forecasts which consider a number of external data sources,
triangulating with customer conversations, trends in market and country
indices as well as forward-looking industry forecasts: for example, forecast
aircraft build rates from the two major manufacturers for Aerospace, rig count
and purchasing manager indices for E&I, World Semiconductor Trade
Statistics semiconductor market forecasts for Electronics and Needham and
IQVIA forecasts for Medical procedures.
The assessment of going concern included conducting scenario analysis on the
aforementioned forecast. Sustainable Solutions has continued to see a growth
in sales volumes, the third consecutive half of growth and the first 2.000t
half since FY 2022, Medical continues to experience lower demand, revenue was
in line with the softer levels since FY 2023, in line with industry trends,
primarily major customers ongoing inventory reduction programmes and the
adverse impact of Volume Based Procurement in China. Whilst volumes have
been improving, the economic outlook remains mixed, with Chemical sector
activity remaining depressed, oversupply from China in addition to the recent
advent of increases in global tariffs, the effect of which on the general
operating business environment has yet to be evidenced, particularly with
respect to the US economy. The scenario analysis performed by management
focuses on the Group's ability to sustain a reduction in Sustainable Solutions
volumes and a further period of suppressed demand in Medical. In assessing
the severity of the scenario analysis the scale and longevity of the impact
experienced during previous economic downturns has been considered, including
the differing impacts on Sustainable Solutions versus Medical segments.
Using the IBP data and the reference points from previous economic cycles
management has created two scenarios to model the impact of a reversal of the
recovery seen in Sustainable Solutions over the past year and the continuing
effect of destocking and VBP within Medical at a regional/market level and
aggregated levels on the Group's profits and cash generation through to June
2026 with consideration also given to the six months beyond this. The impact
of climate change and the Group's goal of Net Zero across all scopes by 2050
are considered as part of the aforementioned IBP process, from both a revenue
and cost perspective, with the anticipated impact (assessed as insignificant
over the shorter-term going concern period) incorporated in the forecasts.
As a result, the scenario testing noted below does not incorporate any
additional sensitivity specific to climate change.
The directors have modelled the following scenarios:
Scenario 1 - Sustainable Solutions demand reduces back to the levels seen
during the most recent low point in H2 FY 2023 from June 2025 for 6 months,
before recovering to the levels seen in the past 12 months for the remainder
of the going concern period. Medical revenue remains in line with the softer
level experienced during FY 2024 and H1 2025 through to December 2025 before
recovery commences at a rate of 10% per annum through the remainder of the
going concern period. Inventory is reduced in line with sales.
Scenario 2 - in line with scenario 1 through to December 2025 but with the
lower demand continuing throughout the going concern period. This would give
an annualised volume below c.3,300 tonnes, a level not seen since 2013, prior
to H2 FY 2023. In this scenario, destocking would continue to impact Medical
revenue throughout the going concern period which result in annualised revenue
of c.£61m, a level last seen in 2016 with the exception of the COVID impacted
FY 2020 when hospitals were closed for elective procedures. With the period
of prolonged lower demand, a more aggressive unwind of the inventory balance
has been assumed. The Directors consider scenario 2 to be a severe but
plausible scenario.
Commercial sales from the new PEEK manufacturing facility in China commenced
during H2 FY 2024; however, with volumes building over time the entity will
require additional funding to see it through to net cash generation. In
concluding on the going concern position, it has been assumed that Victrex
will provide the additional funds in full, which the Board consider to be the
worst case scenario.
Before any mitigating actions the sensitised cash flows show the company has
significantly reduced cash headroom, which would require continued use of the
committed facility during the going concern period. The level of facility
drawn down is higher in scenario 2 but in neither scenario is the committed
facility fully drawn, nor drawn for the whole year. With cash levels lower
than has historically been the case for Victrex, the company has identified a
number of mitigating actions which are readily available to increase the
headroom. These include:
· Use of committed facility - the remainder of the committed
facility could be drawn at short notice. Conversations with our banking
partners indicate that the £20m uncommitted accordion could also be readily
accessed. The covenants of the facility have been successfully tested under
each of the scenarios;
· Deferral of capital expenditure - the base case capital
investment over the next 12 months is lower than recent years with major
projects now completed in China and the UK. This could be further reduced by
limiting expenditure to essential projects and deferring all other projects
later into 2025 or beyond;
· Reduction in discretionary overheads - costs would be limited to
prioritise and support customer related activity;
· Reduction in inventory levels - inventory remains at an elevated
level and following a significant reduction in FY 2024 continues to be
gradually unwound with a further reduction forecast. The scenarios noted
above include an acceleration of the inventory unwind but a more aggressive
approach could be taken to provide additional cash resources; and
· Deferral/cancellation of dividends - the Board considers the cash
position and interests of all stakeholders before recommending payment of a
dividend. A dividend has been proposed for payment in June 2025 of c.£12m
and in the past a final dividend of c.£40m has been paid in February, giving
a combined annual outflow of c.£52m.
Reverse stress testing was performed to identify the level that sales would
need to drop by in order for the Group to be unable to meet its liabilities as
they fall due by the end of the going concern assessment period. Sales volumes
would need to consistently drop materially below the low point in scenario 2,
which is not considered plausible.
As a result of this detailed assessment and with reference to the Company's
strong balance sheet, existing committed facilities and the cash preserving
levers at the Company's disposal, but also acknowledging the current economic
uncertainty created by the increase in global tariffs, particularly in the US,
the depressed Chemical market and the war in Ukraine continuing, the Board has
concluded that the company has sufficient liquidity to meet its obligations
when they fall due for a period of at least 12 months after the date of this
report. For this reason, it continues to adopt the going concern basis for
preparing the interim financial statements.
3. Significant accounting policies
The accounting policies applied by the Group in these condensed consolidated
financial statements are the same as those applied in the 2024 Annual Report
except for the application of relevant new standards. None of the new
standards have had a material impact on the Group's consolidated result or
financial position.
4. Segment reporting
The Group's business is strategically organised as two business units
(operating segments): Sustainable Solutions, which focuses on our Energy &
Industrial, VARs, Transport and Electronics markets, and Medical, which
focuses on implantable and non-implantable medical markets.
(Restated) (Restated)
Unaudited Unaudited Unaudited
Six months ended 31 March 2025 Six months ended 31 March 2024 Year ended 30 September 2024
Sustainable Solutions Medical Group Sustainable Solutions Medical Group Sustainable Solutions Medical Group
£m £m £m £m £m £m £m £m £m
Segment revenue 118.2 30.2 148.4 111.9 30.5 142.4 235.1 62.0 297.1
Internal revenue (2.5) - (2.5) (3.1) - (3.1) (6.1) - (6.1)
Revenue from external sales 115.7 30.2 145.9 108.8 30.5 139.3 229.0 62.0 291.0
Gains on foreign currency net hedging 1.9 0.3 2.2 1.9 0.6 2.5 4.2 1.0 5.2
Cost of sales (76.8) (7.0) (83.8) (68.6) (6.4) (75.0) (148.4) (13.5) (161.9)
Segment gross profit 40.8 23.5 64.3 42.1 24.7 66.8 84.8 49.5 134.3
Restatement of segment reporting
At the start of FY 2025 the group's management structure changed with a
consolidation of our two Medical businesses under the leadership of the
Managing Director for Medical. The non-implantable Medical business, which
in FY 2024 represented 3% of Group revenue, has historically been managed by
the Managing Director for Sustainable Solutions and Board reporting has
consolidated this business with the other Sustainable Solutions businesses.
However, with more strategic opportunities arising in this market, including
more focus on pharmaceutical applications, across an increasingly similar
value proposition to the implantable business, the Board concluded that the
two Medical businesses would benefit from being under the same Managing
Director. The way in which results are reported to the Board has been
realigned with Medical now comprising both the implantable and non-implantable
businesses. The Board is considered the entity's chief operating decision
maker ("CODM") and therefore the way the Board reviews the results of the
business should be consistent with the way the results are externally
reported. Accordingly, the segmental disclosures have been updated to
reflect the revised structure with the comparatives for FY 2024 and H1 2024
restated on a consistent basis.
There is no change to the profit numbers at the group level as a result of
this change.
Tables setting the previous and new segmental reporting for H1 2024 and FY
2024 comparatives are set out below. With the exception of the previously
reported segmental numbers for FY 2024, which have been extracted from the
audited FY 2024 Annual Report, the numbers are unaudited.
H1 2024
Previous segment results (Unaudited) New segmental results (Unaudited)
Six months ended 31 March 2024 Six months ended 31 March 2024
Sustainable Solutions Medical Group Sustainable Solutions Medical Group
£m £m £m £m £m £m
Segment revenue 114.5 26.4 140.9 111.9 30.5 142.4
Internal revenue (1.6) - (1.6) (3.1) - (3.1)
Revenue from external sales 112.9 26.4 139.3 108.8 30.5 139.3
Gains on foreign currency net hedging 1.9 0.6 2.5 1.9 0.6 2.5
Cost of sales (70.1) (4.9) (75.0) (68.6) (6.4) (75.0)
Segment gross profit 44.7 22.1 66.8 42.1 24.7 66.8
FY 2024
Previous segment results (Audited) New segmental results (Unaudited)
Year ended 30 September 2024 Year ended 30 September 2024
Sustainable Solutions Medical Group Sustainable Solutions Medical Group
£m £m £m £m £m £m
Segment revenue 240.6 53.0 293.6 235.1 62.0 297.1
Internal revenue (2.6) - (2.6) (6.1) - (6.1)
Revenue from external sales 238.0 53.0 291.0 229.0 62.0 291.0
Gains on foreign currency net hedging 4.2 1.0 5.2 4.2 1.0 5.2
Cost of sales (151.9) (10.0) (161.9) (148.4) (13.5) (161.9)
Segment gross profit 90.3 44.0 134.3 84.8 49.5 134.3
5. Exceptional items
Items that are, in aggregate, material in size and/or unusual or infrequent in
nature, are disclosed separately as exceptional items in the Condensed
Consolidated Income Statement.
The separate reporting of exceptional items, which are presented as
exceptional within the relevant category in the Condensed Consolidated Income
Statement, helps provide an indication of the underlying performance of the
Group.
(Restated)
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 2025 31 March 2024 30 September 2024
£m £m £m
Included within sales, marketing and administrative expenses:
Business process improvements including ERP system 6.0 4.6 9.9
Impairment of property, plant and equipment relating to gears manufacturing - - 4.6
6.0 4.6 14.5
Included within Result of associate*:
Impairment of investment in associate - 9.1 9.1
Fair value loss on loans due from Bond - 11.0 11.9
Legal fees in relation to Bond - - 0.2
- 20.1 21.2
Exceptional items before tax 6.0 24.7 35.7
Tax on exceptional items (1.5) (3.9) (8.0)
Exceptional items after tax 4.5 20.8 27.7
* The exceptional items relating to the impairment of investment in associate
and fair value loss on loans due from Bond 3D High Performance Technology BV
('Bond') of £20.1m was presented within sales, marketing and administrative
expenses in the Financial Report for the six months ended 31 March 2024. This
was subsequently presented within Result of associate for the year ended 30
September 2024 within the 2024 Annual Report, and therefore the prior year
comparative for the six months ended 31 March 2024 has been re-presented on a
consistent basis. Operating profit for the six months ended 31 March 2024 is
therefore revised at £23.8m, compared to £3.7m as previously reported. There
has been no change in profit for the period as a result of this restatement.
Business process improvements including ERP system implementation
During FY 2022 the Group commenced a multi-year improvement project centred
around the implementation of a new cloud-based ERP system. The project, which
includes process redesign, customisation and configuration of the new ERP
system, change management and training, will deliver benefits to both customer
interactions and internal business processes including those covering
procurement, back-office processing and organisational efficiency.
The project costs relating directly to the new ERP system implementation do
not meet the criteria for capitalisation (as the majority of costs relating to
past systems have), in line with the IFRS Interpretations Committee's decision
clarifying how arrangements in respect of cloud-based Software as a Service
('SaaS') systems should be accounted for. Accordingly, the cost is expensed
rather than capitalised and amortised. Given the size of the overall
improvement project and its impact on the reported profit-based metrics, the
fact the system is evergreen and thus this level and nature of cost will not
happen again, it meets the Group's criteria to be presented as exceptional.
The improvement project will be completed in 2025 with phase I of the ERP
system successfully going live during H1 2025.
FY 2024 exceptional items
Full details of the non-cash exceptional items recognised in the year ended 30
September 2024 comprising the impairment of property, plant and equipment
relating to gears manufacturing of £4.6m, and impairment of investment in
associate, fair value loss on loans (including both convertible loan notes and
2024 bridging loan) and legal fees totalling £21.2m are detailed in the 2024
Annual Report in Note 5.
The cash flow in the year associated with exceptional items was a £6.9m
outflow (H1 2024: £4.1m outflow, FY 2024: £11.7m outflow).
6. Income tax expense
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 2025 31 March 2024 30 September 2024
£m £m £m
UK corporation tax 2.1 0.1 (0.7)
Overseas tax 0.7 0.1 2.7
Deferred tax 0.9 0.5 5.3
Tax adjustments relating to prior years (0.1) 0.1 0.3
Total tax expense in income statement 3.6 0.8 7.6
Effective tax rate 21.2% 24.5% 32.5%
Deferred tax assets/liabilities have been recognised at the rate they are
expected to reverse. For UK assets/liabilities this is 25% for the majority of
assets and liabilities (31 March 2024 and 30 September 2024: 25%), being the
UK tax rate effective from 1 April 2023. For overseas assets/liabilities the
corresponding overseas tax rate has been applied.
7. Earnings per share
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 2025 31 March 2024 30 September 2024
Earnings per share - basic 17.4p 3.1p 19.8p
- diluted 17.2p 3.0p 19.7p
Profit for the financial period attributable to the owners of the Company 15.2 2.7 17.2
(£m)
Weighted average number of shares - basic 86,989,295 86,950,951 86,950,951
- diluted 87,911,751 87,992,025 87,371,283
8. Cash and borrowings
Net debt
Net debt comprises cash and cash equivalents, offset by borrowings and IFRS 16
lease liabilities.
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 2025 31 March 2024 30 September 2024
£m £m £m
Cash and cash equivalents 25.4 28.5 29.3
Bank loans due within one year (9.9) (8.0) (7.5)
Borrowings due within one year (9.9) (8.0) (7.5)
Bank loans due over one year (38.5) (52.7) (25.0)
Loan payable to non-controlling interest (8.2) (8.0) (7.9)
Borrowings due over one year (46.7) (60.7) (32.9)
Current lease liabilities (1.8) (1.4) (1.7)
Non-current lease liabilities (7.7) (8.2) (8.3)
Net debt (40.7) (49.8) (21.1)
Bank loans
Bank loans comprise the UK revolving credit facility and China banking
facility, split between a capital expenditure facility and a working capital
facility.
UK Revolving credit facility
The Group has a banking facility of £60.0m (£40.0m committed and £20.0m
accordion) which expires in October 2027. Interest is charged at a rate of
SONIA +0.75% to SONIA +1.05% depending on the level of utilisation. The
facility contains covenant measures which are tested biannually, consisting of
leverage and interest cover.
In February 2025, £18.0m of the £40.0m committed facility was drawn. As at
31 March 2025, £3.0m had been repaid, with £15.0m remaining drawn (31 March
2024: £26.0m drawn; 30 September 2024: £nil drawn) and is included in 'Bank
loans due over one year'. £2.0m of the drawn down amount at 31 March 2025 has
been repaid at the date of this report.
China banking facility
The Group's total capital expenditure facility is RMB 250m with the amount due
at 31 March 2025 £26.5m/RMB 241m (31 March 2024: £27.1m/RMB 244m; 30
September 2024: £26.2m/RMB 243m). The amount due on the capital expenditure
facility is split between the amount due within one year of £3.0m/RMB 27m (31
March 2024: £0.4m/RMB 4m; 30 September 2024: £1.2m/RMB 11m) and the amount
due after one year of £23.5m/RMB 214m (31 March 2024: £26.7m/RMB 240m; 30
September 2024: £25.0m/RMB 232m).
The facility is repayable in line with an agreed schedule up to December 2026.
Interest is charged at the five-year Loan Prime Rate of the People's Bank of
China. The purpose of the loan was to fund the construction of a manufacturing
facility in China.
During FY 2024, interest of £0.7m was capitalised as part of qualifying
capital expenditure within property, plant and equipment. Capitalisation
ceased in April 2024 when the property, plant and equipment to which the loans
relate was commissioned. From this point all interest is charged to the income
statement, included within finance costs.
The working capital facility in China is RMB 150m. Each drawdown under the
working capital facility is required to be repaid at least annually, after
which the balance can be redrawn. As such all amounts due on the working
capital facility of £6.9m/RMB 63m (31 March 2024 £7.6m/RMB 68m; 30 September
2024: £6.3m/RMB 58m) is included within the amount due within one year.
Interest is charged at the one-year Loan Prime Rate of the People's Bank of
China +50bps and is charged to the income statement, included within finance
costs.
Loan payable to non-controlling interest
The Group's loan payable to the non-controlling interest, Liaoning Xingfu New
Material Co., Ltd ('LX'), is interest bearing at 4% per annum. Interest
payable on the shareholder loan is rolled up into the value of the loan, until
repayment occurs. The purpose of the shareholder loan was to fund the
construction of a manufacturing facility in China, with the interest payable
capitalised as part of qualifying capital expenditure within property, plant
and equipment until that plant is commissioned, which took place in April
2024. No interest was capitalised accordingly in H1 2025 (H1 2024: £0.1m, FY
2024 £0.2m).
The RMB 65m loan is unsecured. At 31 March 2025 the Sterling value of the
loan, including rolled up interest and the impact of exchange rate movements,
was £8.2m (31 March 2024: £8.0m, 30 September 2024 £7.9m).
The loan is repayable in two instalments, the first is on 30 September 2026
(RMB 50 million), with the second on 30 September 2027 (RMB 15 million), or
such date as may be mutually agreed by the shareholders, LX and Victrex Hong
Kong Limited.
9. Derivative financial instruments
The notional contract amount, carrying amount and fair value of the Group's
forward exchange contracts are as follows:
Unaudited Unaudited Audited
As at 31 March 2025 As at 31 March 2024 As at 30 September 2024
Notional contract amount Carrying amount and fair value Notional contract amount Carrying amount and fair value Notional contract amount Carrying amount and fair value
£m £m £m £m £m £m
Current assets 115.0 2.9 155.1 3.6 170.9 7.3
Current liabilities 45.9 (1.1) 11.0 (0.1) (5.2) (0.3)
160.9 1.8 166.1 3.5 165.7 7.0
The fair values have been calculated by applying (where relevant), for
equivalent maturity profiles, the rate at which forward currency contracts
with the same principal amounts could be acquired on the balance sheet date.
These are categorised as Level 2 within the fair value hierarchy. Fair value
gains on foreign currency contracts of £2.2m have been recognised in the
income statement in the period (H1 2024 - gains of £2.5m; FY 2024 - gains of
£5.2m).
10. Non-controlling interest
The non-controlling interest recognised relates to the Group's subsidiary
company, Victrex (Panjin) High Performance Materials co., Ltd ('VIPL'), where
the Group continues to hold a 75% equity interest with the remaining 25% held
by LX. VIPL is a limited liability company set up for the purpose of the
manufacture of PAEK polymer powder and granules, based in mainland China. The
income statement and balance sheet of VIPL are fully consolidated with the
share owned by LX represented by a non-controlling interest.
In the period to 31 March 2025 the subsidiary incurred a loss of £6.3m (H1
2024: loss of £0.9m; FY 2024: loss of £5.7m), of which £1.6m (H1 2024
£0.2m; FY 2024: £1.4m) is attributable to the non-controlling interest.
Total non-controlling interest as at 31 March 2025 is -£1.0m (31 March 2024:
£1.8m; 30 September 2024: £0.6m).
11. Exchange rates
The most significant Sterling exchange rates used in the financial statements
under the Group's accounting policies are:
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 2025 31 March 2024 30 September 2024
Average Closing Average Closing Average Closing
US Dollar 1.31 1.28 1.24 1.27 1.26 1.32
Euro 1.20 1.20 1.16 1.16 1.16 1.18
The "average" exchange rates in the above table are the weighted average spot
rates applied to foreign currency transactions, excluding the impact of
foreign currency contracts. Gains and losses on foreign currency contracts, to
the point where transferred to profit or loss, where net hedging has been
applied for cash flow hedges, are separately disclosed in the income
statement.
12. Reconciliation of profit to cash generated from operations
(Restated) Unaudited
Unaudited Six months ended Audited
Six months ended 31 March 2024 Year ended
31 March 2025 £m 30 September 2024
£m £m
Profit after tax for the period 13.6 2.5 15.8
Income tax expense 3.6 0.8 7.6
Result of associate* - 20.1 21.2
Net finance costs 0.8 0.4 1.2
Operating profit* 18.0 23.8 45.8
Adjustments for:
Depreciation 12.1 9.2 21.5
Amortisation 0.4 1.8 1.7
Loss on disposal of non-current assets 0.1 0.8 0.1
Gain on early termination of long-term lease liabilities - - (0.1)
Impairment of investment in associate undertakings and convertible loan notes - - 4.6
Equity-settled share-based payment transactions 1.2 0.7 0.2
Gains on derivatives recognised in income statement that have not yet settled 1.5 (1.6) (2.4)
Decrease in inventories 1.0 6.5 17.2
Increase in trade and other receivables (2.7) (3.0) (1.7)
Increase/(decrease) in trade and other payables 3.5 (3.8) 2.5
Retirement benefit obligations charge less contributions (0.5) (0.3) (0.7)
Cash generated from operations 34.6 34.1 88.7
* The explanation for the reclassification of £20.1m of exceptional items for
the six months ended 31 March 2024 is detailed in note 5.
13. Alternative performance measures
We use alternative performance measures (APMs) to assist in presenting
information in an easily comparable, analysable and comprehensible form. The
measures presented in this report are used by the Board in evaluating
performance. However, this additional information presented is not required by
IFRS or uniformly defined by all companies. Certain measures are derived from
amounts calculated in accordance with IFRS but are not in isolation an
expressly permitted GAAP measure. The measures are presented below.
APM 1 Operating profit before exceptional items (referred to as underlying
operating profit) is based on operating before the impact of exceptional
items. This metric is used by the Board to assess the underlying performance
of the business excluding items that are, in aggregate, material in size and /
or unusual or infrequent in nature. Exceptional items are disclosed in note 5;
(Restated)
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 2025 31 March 2024 30 September 2024
£m £m £m
Operating profit* 18.0 23.8 45.8
Exceptional items* 6.0 4.6 14.5
Underlying operating profit 24.0 28.4 60.3
APM 2 Profit before tax and exceptional items (referred to as underlying
profit before tax) is based on Profit before tax before the impact of
exceptional items. This metric is used by the Board to assess the underlying
performance of the business excluding items that are, in aggregate, material
in size and / or unusual or infrequent in nature. Exceptional items are
disclosed in note 5;
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 2025 31 March 2024 30 September 2024
£m £m £m
Profit before tax 17.2 3.3 23.4
Exceptional items 6.0 24.7 35.7
Underlying profit before tax 23.2 28.0 59.1
APM 3 Constant currency revenue and associated metrics are used by the Board
to assess the year on year underlying performance of the business excluding
the impact of foreign currency rates, which can by nature be volatile.
Constant currency revenue metrics are reached by applying current half year
(HY 2025) weighted average spot rates to prior half year (HY 2024) revenue
transactions;
Group % change
Unaudited Unaudited
Six months ended Six months ended
31 March 2025 31 March 2024
£m £m
Revenue at reported currency 145.9 139.3 5%
Impact of FX translation - (4.0)
Revenue at constant currency 145.9 135.3 8%
Volume 2,018 1,737
ASP at constant currency 72.3 77.9 -7%
(Restated) % change
Unaudited Unaudited
Six months ended Six months ended
Sustainable Solutions 31 March 2025 31 March 2024
£m £m
Revenue at reported currency** 115.7 108.8 6%
Impact of FX translation - (3.3)
Revenue at constant currency 115.7 105.5 10%
(Restated) % change
Unaudited Unaudited
Six months ended Six months ended
Medical 31 March 2025 31 March 2024
£m £m
Revenue at reported currency** 30.2 30.5 -1%
Impact of FX translation - (0.7)
Revenue at constant currency 30.2 29.8 +1%
** The prior year comparatives for the six months ended 31 March 2024 have
been restated for APM 3 to reflect the change in segmental reporting relating
to the non implantable medical market. See note 4 for further details.
APM 4 Underlying operating cash conversion is used by the Board to assess
the business' ability to convert underlying operating profit into cash
effectively. Underlying operating cash conversion is underlying operating cash
flow as a percentage of underlying operating profit. Underlying operating cash
flow is underlying operating profit before depreciation, amortisation and loss
on disposal, less capital expenditure, adjusted for working capital movements.
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 2025 31 March 2024 30 September 2024
£m £m £m
Underlying operating profit (APM 1) 24.0 28.4 60.3
Depreciation, amortisation and loss on disposal# 12.6 11.8 23.3
Change in working capital 2.7 (0.3) 17.5
Capital expenditure (8.6) (21.8) (32.6)
Operating cash flow 30.7 18.1 68.5
Operating cash conversion 128% 64% 114%
#Excludes the impact of loss on disposal of right of use assets.
APM 5 Underlying EPS is earnings per share based on profit after tax but
before exceptional items divided by the weighted average number of shares in
issue. Further details of the exceptional items are disclosed in note 5. This
metric is used by the Board to assess the underlying performance of the
business excluding items that are, in aggregate, material in size and/or
unusual or infrequent in nature;
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 2025 31 March 2024 30 September 2024
£m £m £m
Profit after tax attributable to owners of the Company 15.2 2.7 17.2
Exceptional items 6.0 24.7 35.7
Tax on exceptional items (1.5) (3.9) (8.0)
Profit after tax before exceptional items net of tax 19.7 23.5 44.9
Weighted average number of shares 86,989,295 86,950,951 86,950,951
Underlying EPS (pence) 22.6 27.0 51.7
APM 6 Underlying operating overheads is made up of sales, marketing and
administrative expenses, and research and development expenses, before
exceptional items. Further details of the exceptional items are disclosed in
note 5. This metric is used by the Board to assess the underlying performance
of the business excluding items that are, in aggregate, material in size
and/or unusual or infrequent in nature.
(Restated)
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 2025 31 March 2024 30 September 2024
£m £m £m
Sales, marketing and administrative expenses* 36.7 34.3 71.0
Exceptional items* (6.0) (4.6) (14.5)
Research and development expenses 9.6 8.7 17.5
Underlying operating overheads 40.3 38.4 74.0
* The prior year comparative for the six months ended 31 March 2024 has been
recalculated for APM 1 and APM 6 to reflect the reclassification of the
exceptional items relating to the impairment of investment in associate and
fair value loss on loans due from Bond 3D High Performance Technology BV
('Bond') of £20.1m from sales, marketing and administrative expenses to
Result of associate. See note 5 for further details.
Responsibility Statement of the Directors
The Directors confirm that these condensed consolidated interim financial
statements have been prepared in accordance with IAS 34 as adopted by the UK
and that the interim management report includes a fair review of the
information required by DTR 4.2.7 and DTR 4.2.8, namely:
(i) an indication of important events that have occurred during
the first six months and their impact on the condensed set of financial
statements, and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
(ii) material related party transactions in the first six months and
any material changes in the related party transactions described in the last
Annual Report.
During the period since the approval of the Victrex plc Annual Report for the
year ended 30 September 2024, there have been the following changes in the
directorate:
1/ Jane Toogood stepped down from the Board at the conclusion of the AGM on
7(th) February 2025.
The Directors of Victrex plc are detailed on our Group website
www.victrexplc.com (http://www.victrexplc.com) .
By order of the Board
Jakob Sigurdsson Ian Melling
Chief Executive Chief
Financial Officer
12 May 2025 12 May 2025
Forward-looking statements
Sections of this half-yearly Financial Report may contain forward-looking
statements, including statements relating to: certain of the Group's plans and
expectations relating to its future performance, results, strategic
initiatives and objectives, future demand and markets for the Group's products
and services; research and development relating to new products and services;
and financial position, including its liquidity and capital resources.
These forward-looking statements are not guarantees of future performance. By
their nature, all forward looking statements involve risks and uncertainties
because they relate to events that may or may not occur in the future, and are
or may be beyond the Group's control, including: changes in interest and
exchange rates; changes in global, political, economic, business, competitive
and market forces; changes in raw material pricing and availability; changes
to legislation and tax rates; future business combinations or disposals;
relations with customers and customer credit risk; events affecting
international security, including global health issues and terrorism; the
impact of, and changes in, legislation or the regulatory environment
(including tax); and the outcome of litigation.
Accordingly, the Group's actual results and financial condition may differ
materially from those expressed or implied in any forward-looking statements.
Forward-looking statements in this half-yearly Financial Report are current
only as of the date on which such statements are made. The Group undertakes no
obligation to update any forward-looking statements, save in respect of any
requirement under applicable law or regulation. Nothing in this Financial
Report shall be construed as a profit forecast.
Shareholder information:
Victrex's Annual Reports and half-yearly Financial Reports are available on
request from the Company's Registered Office or to download from our corporate
website, www.victrexplc.com (http://www.victrexplc.com)
Financial calendar:
Record date~ 30 May 2025
Payment of interim dividend 27 June 2025
~ The date by which shareholders must be recorded on the share register to
receive the dividend
Victrex plc
Registered in England
Number 2793780
Tel: +44 (0) 1253 897700
www.victrexplc.com (http://www.victrexplc.com)
ir@victrex.com
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