Specialty chemicals group Victrex (VCT) maintained its FY26 financial guidance despite a drop in Q1 sales. The firm makes high-performance polymers for customers in the automotive, aerospace, healthcare, industrial and energy sectors.
| Share price: 654p (-6%) | PE: 16.4x |
| Market cap: £565m | Yield: 8.5% |
SLOW START TO FY26
For the quarter to December, the firm reported a 4% drop in volumes and a 2% drop in selling prices. That resulted in a 6% drop in revenue to £858 million from £898 million the previous year.
The firm said volume growth in energy and industrial markets was offset by ‘more subdued’ demand from transport and medical customers. It also flagged lower purchases by ‘value-added resellers’ or stockists, who act as middlemen in some sectors.
New CEO Dr James Routh said he was ‘impressed’ by the level of innovation and growth opportunities ahead of the business. He also called 2026 ‘a transitional year’ to unlock the firm’s potential and ready it for sustainable medium-term growth.
Victrex shares have been in a sustained downtrend from the £25 level for the best part of five years. IF 2026 is a ‘transitional’ year and there is a turnaround, the shares could fly, but it’s a big IF.
The firm was a staple in many ‘quality’ investors’ portfolios, but these days it is a ‘value’ story instead. The big question is whether it can get back to making the kind of profits it did pre-pandemic.
Today’s 6% sell-off suggests investors have heard the new CEO’s pep talk before and aren’t convinced. We’re agnostic: the shares look to have hit a valuation floor, but we’re lacking a catalyst.
Read the press release here: https://www.victrexplc.com/investors/
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