May 13, 2019 / 8:03 AM / 2 months ago

UPDATE 1-Victrex shares slip, sees pressure on annual growth

(Adds details of results, comments, share price)

May 13 (Reuters) - Shares in Victrex Plc fell as much as 5 percent on Monday, after the polymer maker warned annual growth could stall following a much weaker first half due to fewer automotive and consumer electronics contracts.

Victrex said pretax profit fell 21 percent to 50.2 million pounds ($65.27 million) in the six months ended March 31, hit by weakness in its automotive and consumer electronics divisions.

The company was also hurt by the impact of adverse currency, cost inflation and investment phasing.

Shares were last down 3.4 percent at 21.4 pounds around 0750 GMT.

Victrex’s polymers are used in the making of parts for automotive, aerospace, energy, electronics and medical industries that are supplied across 40 countries.

Group sales volumes in the first-half fell to 1,899 tonnes from 2,256 tonnes last year, the company said.

The company said the second quarter showed “some signs” of improvement, with its automotive division starting to stabilise.

“Looking towards the second half, headwinds in the form of currency and cost inflation will be broadly neutral, and incremental operating investment will be limited,” Chief Executive Officer Jakob Sigurdsson said.

“However, with some of our key industrial markets remaining weak, our base assumption is that any improvement would be gradual and back end weighted,” Sigurdsson added.

The company said revenue in its medical division is improving, adding that steps taken to better manufacturing capabilities and reduce costs had started to kick in.

Victrex said in December here it stocked up extra raw materials and secured more warehousing for finished goods in Europe and China. ($1 = 0.7691 pounds) (Reporting by Justin George Varghese in Bengaluru; Editing by Bernard Orr)

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