Victrex (VCT) Finals

[NeilW]

"For the full year, with Group profit before tax increasing by 11% and earnings per share increasing by 20%, the final regular dividend will increase by 15% to 53.80p (2016: 46.82p) and will be supplemented by a special dividend of 68.00p, following our cash balance reaching a record GBP120.1m."

"The proposed final regular and special dividends will be paid on 16 February 2018 to all shareholders on the register on 2 February 2018."

[MoVert]

One of my HYP shares. A bit of a low yield when purchased, but the results justify holding them in my opinion.

[ADrunkenMarcus]

Victrex surprised me with a larger than I expected special dividend for 2018. Special dividends are forecast for 2019, 2020 and 2021 which would imply five years in a row of special dividends (including 2017 - the last one before that was 2014). I'm not sure that will happen if they have a need to make further investments, but they have a strong balance sheet.

ROCE has started recovering towards the high 20%s and the operating margin is good. I hope we will see the ROCE rise further to its historical levels in the 30%s as the investments they have made generate returns and their mega programmes make progress.

Sharescope tells me that, for the last ten years, Victrex has:

averaged 28.5% ROCE (return on capital employed);
averaged 16.9% CROCI (cash return on capital invested);
grown its ordinary dividend per share at 12.5% CAGR;
averaged 39.1% operating margin

They also show the free cash flow yield as 4.6%. The current dividend yield is 2.6% (on an ordinary basis).

As always, DYOR!

Best wishes

Mark.