Victrex Jumps as Demand for Specialty Plastic Boosts Salesby
Aerospace and automotive markets are performing “well”
U.K. company to extend cost efficiency plan over coming year
Victrex Plc shares surged the most in more than six years after demand for its high-performance plastic used in aircraft parts and spinal implants helped boost fourth-quarter sales.
Sales volumes of its so-called PEEK plastic sold to the consumer electronics industry more than doubled in the second half, compared with a drop in the first six months of the year, the Lancashire-based company said in a statement on Tuesday. Victrex said total fourth-quarter revenue climbed 8 percent to 73.7 million pounds ($90.6 million), with volumes up 9 percent.
The shares rose as much as 12 percent, the most since April, 2010, and were trading 10 percent higher at 1,791 pence as of 9:17 a.m. in London.
The performance in the final three months of its financial year was better than anticipated, JP Morgan said in a note.
Victrex is one of just a few companies that can make polyaryletherketones polymer, known as PEEK plastics. The British supplier’s main competitor for orders from manufacturers such as Apple Inc. is Solvay SA, while Evonik Industries AG of Germany has also started making small amounts. Demand for these lightweight plastics from the aerospace industry to replace metal parts such as hinges helped counter a drop in Victrex full-year sales, with fell 4 percent to 252.3 million pounds, in line with estimates by analysts surveyed by Bloomberg.
Looking ahead, the PEEK supplier to mobile-phone makers including Apple said it will extend a cost-savings program amid expectations that a slowdown in the consumer electronics market will last into 2017. Victrex is budgeting for “significantly lower” sales volumes to that industry next year, after a drop of more than 30 percent in the fiscal year through September.