Is there money to be made out of Victrex shares?

If you walk into the room and say the word “polymers” to people, odds are you will get little response. It means that British based producer of the high performance variety Victrex, probably won’t trigger much of a response either. The aforementioned is a shame, largely because the company does present investors with a viable share option. You are likely to find the company on the London Stock Exchange and the FTSE 250, but is it worth paying out for Victrex shares?

History

Established back in 1993 as the result of a management buyout of PEEK Polymer by Imperial Chemical Industries. Following this buyout the company would arrive on the London Stock Exchange in 1995. They are based out Blackpool and traditionally invest large cash sums regularly to increase their production capacity, the most recent figure for such stood at £90 million. In the past 12 months their production capacity has increased by approximately 70%. By 2015 they plan to be producing at around 7,000 MT per annum, an increase on their current per annum rate of 4,250 MT.

Operations

A company lives and dies by its operations and in this day in age it pays to stay diversified. Victrex have forged their name in the manufacturing of high-performance polyaryletherketones. However, that in itself has been split into two sub-sectors to take the weight off the company’s output. The business is organised as the following:

Victrex Polymer Solutions (VPS) Transport, industrial and electronics market focused.
Invibio Biomaterial Solutions (Invibio) Specialist solutions and medial equipment manaufacter focused.

Thinking Differently

What has helped Victrex and Victrex shares see successful times is their ability to look at things a different way. Contrary to many other companies in the field, Victrex opt for a long term view on the market, this is backed up the £90 million investment that was put into the company that has allowed for increased output heading into in 2015. Many companies also opt to stay local in many regards and largely suffer because of it. Victrex may be based out of Lancashire but they have embraced global distribution unlike anyone else. Their products reach as far North America, South America, Asia, and fellow European countries, this is reflected in the fact that Victrex shares also appeal to international investors. With sales set to grow in Asian sectors over the next couple years, Victrex shares have tendency to appeal across the board.

Final Thoughts

Victrex shares might not be a name that is regularly thrown around within investor’s circles, but maybe it should be. The figures don’t lie, the company continues to post strong results and even after profits plunge in 2009, the company rebounded strong in 2011 and 2012. Analysts expect this performance to continue into the future, with dividends for Victrex shares also expected to rise to 42p. They may not be a cheap acquisition at their current price, but their long-term value can’t be denied and market makers tend to back up these claims.

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