Victrex profits rise as it stocks up ahead of Brexit

FTSE 250 polymer maker Victrex reported a jump in full-year profit on Tuesday as it said it was stockpiling ahead of Brexit.

In the year to 30 September 2018, pre-tax profit rose 15% to £127.5m on revenue of £326m, up 12% from the year before. Earnings per share were up 11% to 128.8p and group sales volumes increased 10% to 4,407 tonnes.

Chief executive Jakob Sigurdsson said: "This has been a strong year for Victrex, with broad based growth in our core polymer business and further good progress in our new product pipeline."

"We delivered a range of notable milestones across each of our mega-programmes and we are currently closing in on larger opportunities in Gears, as well as being in advanced discussions for new strategic Aerospace alliances.

"After my first year as CEO, it's clear that moving downstream through our Polymer & Parts strategy will further differentiate Victrex in a competitive market and enable us to capture our long-term growth opportunities. We will continue to invest in support of future growth, as well as reviewing partnership and acquisition opportunities."

"Strong cash generation continues to offer the opportunity of attractive returns to shareholders and we are today announcing a special dividend of 82.68p, whilst retaining the current dividend distribution policy, thereby balancing investment for growth with shareholder return."

As far as Brexit is concerned, the company said the main risk is that there could be a sustained period when it's not able to import certain raw materials or export finished goods through customs, which could curtail sales if regional inventory levels were depleted. To mitigate this, it has secured additional warehousing for finished goods stocks in mainland Europe and China, which will allow a minimum of eight weeks of finished goods stock to be held outside the UK by the end of March 2019.

Victrex has also secured some additional raw material stocks and said group inventories could exceed £80m through FY19 as a result, up from £69.3m.

At 0813 GMT, the shares were down 0.6% to 2,500p.