Shares in plastics firm Victrex (VCT) fell over 10% to £13.71 in early trading as the company issued a profit warning via an unscheduled trading update, but recovered somewhat to trade 4% lower.

Its shares have fallen over 15% year-to-date (YTD).

Victrex said it is now likely to see consensus adjusted pre-tax profits fall by circa 10% as it moves to the revised guidance of £80-85 million ‘with no step up in demand going into the final quarter currently visible.’

The plastics firm blamed ‘weak industrial volumes’ which are ‘tracking down 20% year-to-date’ versus 14% - 1,941 tonnes - when it reported its first half results on 9 May.

TRICKY FIRST HALF

The company’s pre-tax profits for the six months ending 31 March 2023 fell by 10% to £39.1 million compared to £43.6 million in the same period last year.

Group revenue, however, was marginally higher for the first half at £162 million.

Jakob Sigurdsson, CEO of Victrex, said that its first half performance was ‘driven by strong pricing, an improved sales mix and currency, despite a softer macro-economic environment.’

For the third quarter, Victrex anticipates volumes of 800 tonnes compared to 1,323 tonnes in the same period last year.

Analysts at Jefferies said in a note: ‘Revenue is currently tracking down mid-single digit percentage and, if run rates persist, will end the year down 6% - 10%.’

The company said that it now expects current headwinds to persist through the summer and ‘at least’ until the end of September 2023.

Victrex will reports its third quarter management statement on 6 July.

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