Shares in high-performance plastics firm Victrex (VCT) have taken a turn for the worse over the past six months as the company struggles with high inventory levels and industry destocking in its medical business.

While second-quarter volumes have improved and full-year guidance has been maintained at low single-digit growth, achieving the firm’s target of a small increase in pre-tax profit in the second half compared with last year is looking increasingly difficult unless there is an improvement in trading. 

‘At this stage, medical performance is tracking lower than our expectations for the second half year,’ said chief executive Jakob Sigurdsson in a trading update on 4 July.

Other issues for the polymer producer include the slow ramp-up of its new plant in China and a prolonged impact from lower asset utilisation, while adverse currency moves are also expected to take a bite out of second-half earnings.

Berenberg analyst Aron Ceccarelli said in a research note: ‘Although the recovery in some key end-markets may have started, management’s track record of over-optimistic assumptions and questionable execution will continue to weigh on the shares for quite some time.’

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