With 30 old ages of experience and have professional production, modern engineering and good client services, VictrexPlc is speedy to go a prima planetary makers approximately high public presentation polyaryletherketone stuffs with distribution squad that spans more than 30 states on the universe. With big graduated table, Victrex divides into two divisions: Victrex Polymer Solutions and Invibio Biomaterial Solutions. Besides, to increase competitory and give advanced applications to market, Victrex is besides uninterrupted create new applications by utilizing Victrexpolyketone stuffs. This helps clients better treating techniques and cut down overall costs, specially guarantee the most comprehensive committedness to clients about supplying specialised services. ( VictrexPlc, 2012, About Victrex )
Scheme and Aims
Corporate strategic purpose of VictrexPlc is to accomplish sustainable net incomes growing for stockholders by:
Scheme 1 ( S1 ) : Focus, through the Victrex Polymer Solutions and Invibio Biomaterial Solutions concern units schemes, on keeping the Group ‘s leading in developing and turning the market for polyketone based merchandises.
Scheme 2 ( S2 ) : Keeping the highest appropriate quality, efficiency, safety, wellness and environmental criterions throughout the supply concatenation
Scheme 3 ( S3 ) : Supplying a fulfilling and suitably ambitious environment for employees
Scheme 4 ( S4 ) : Seeking out and implementing, where appropriate, added value concern chances ( VictrexPlc, 2011, one-year study and histories )
The taking planetary maker of high public presentation polyaryletherketones.
An first-class fiscal place with a healthy balance sheet and strong hard currency coevals.
All Victrex ‘s merchandises are manufactured under ISO quality enrollment.
Failings ( internal factors )
The group manages exposure to recognition hazard at many degrees. So, internal processs require regular due consideration of recognition evaluation, payment history, aged points and proactive debt aggregation.
Victrex continues its enlargement into high growing markets such as India, Russia and Brazil.
Menaces ( external factors )
Change about monetary value, natural stuffs and energy can impact the Group ‘s consequence.
The Group ‘s fiscal statements are exposed to currency fluctuations such as US Dollar, Euro and Yen
Part A: CRITICALLY ANALYZE AND EVALUATE THE FINANCIAL PERFORMANCE OF THE COMPANY
In order to investors experience interesting in puting 500,000 to company, the analysis the fiscal state of affairs of Victrex is really of import. To analyse and measure the fiscal public presentation of the company, this study will establish on 4 types as below:
Victrex ‘s ROCE showns a diminution from 2007 to 2009, there was a crisp addition so in 2010 it recovered its ROCE and so once more there was continue addition in 2011. This was due to the fact as ensuing group net income before revenue enhancement were up 26 % whereas capital employed merely increased by 2.58 % . the company has good consequence of operating, puting neodymium funding determination. The company has full income with no debt in 2011.This proves that Victrex has used entire assets more expeditiously ( 1 ) and have been successful in raising net net income. When comparing with Croda International, it is evident that, when the net incomes earned by the two companies are related to respective investing bases, Victrex achieved the better return on capital employed, so, might be regarded as the more successful in utilizing capital expeditiously to bring forth gross. These tie in with S1 and S4 of Victrex Plc.
( 1 ) The per centum of stock lists increase = [ ( Inventories2011- Inventories2010 ) / Inventories2010 ] A-100 = [ ( ?45 – ? 34.5 ) /34.5 ] A- 100 = 30 %
The operating net income border from 2008 to 2009 decreased somewhat due to the crisis of universe economic had non yet been overcome in 2009. This influences the monetary value of the sold units. When monetary values increase affect units that company can sell, which in bend influences the overall net income Numberss every bit good as causes a important diminution in demand across all markets. However, from 2009 to 2011, runing net income border of Victrex had a significantly increased. It brings effectual and helps Victrex earn more gross net income on each gross revenues dollar. So, it can turn out that Victrex is making financially better than Croda International.
Victrex Polymer Solutions
Invibio Biomaterial Solutions
In 2009, turnover of Victrex go down earnestly due to Victrex influence and impact strongly from economic downswing. This leads to buying belongingss involve a big sum of money every bit good as people push back their determinations to buy any belongingss until the economic system improve. However, from 2010 to 2011, Victrex ‘s turnover was up 14 % to a record of ?215.8m ( 2010: ?189.5m ) . This reflects that Victrex has a strong public presentation from both of concern unit ( 2 ) . Particularly Victrex Polymer Solutions contributed significantly to gross ( 3 ) . The ground for this addition is due to Victrex continued investing in commercial and proficient resources targeted at new application development with high figure ( 4 ) , improved client support, new merchandise development and strengthened stop user focal point. Specially, there is a strong recoil in demand across all major markets- particularly in USA, Asia and Japan every bit good as improved effectual exchange rates with the underlying twelvemonth on twelvemonth. These tie in with S1, S2 and S4 of the company.
( 2 ) Victrex Polymer Solutions ( ‘VPS ‘ ) : foremost, heightening more existing belongingss. Second, invest in a new proficient Centre in Tokyo. Third, use engineering installations at UK Hillhouse site to farther develop new merchandises
Invibio Biomaterial Solutions ( ‘Invibio ‘ ) : foremost, enter into 55 extra long-run supply confidence understandings with implantable medical device makers. Second, near partnerships with universe research groups and cardinal sentiment leaders. Third, recruit application specific leaders and regulative expertness from the medical device industry in the countries of spinal column, injury.
( 3 ) Gross in 2011 was ?166.1m ( 2010: ?145.3m ) stand foring an addition of 14 % over 2010. Percentage of Victrex Polymer Solutions gross account 77 %
( 4 ) The figure of commercialized applications developed ( 539 in 2011 and 634 in 2010 )
Long-run liquidness ratios
From 2009 to 2011, fixed assets turnover have been rise strongly- specially in 2011, fixed plus turnover increased by 0.78 times compared with in 2009. This is due to Victrex has effectual board that can pull off concern efficaciously to make highest gross revenues from investing every bit good as the company has been more effectual utilizing company ‘s investing in net belongings, works and equipment, nevertheless, in 2009, there are important decrease. With the low ratio in 2009, it proves that Victrex has the job in inefficient aggregation and obsolescence of stock list. Reason of this job is Victrex affected by the crisis of universe economic that lead to lesser people who will purchase during the economic down bend and therefore ensuing in lesser net income for the company.
Short-run liquidness ratios
Current ratio of Victrex has shown a stable addition from 2007 to 2011 ( 1.2 times ) due to the supply concatenation ever has stable ( 5 ) every bit good as addition 61 % of stock lists ( 6 ) from 2007 to 2011. This lead to current assets increased by 125 % ( 7 ) to ?143.2m ( 2007: ?63.4m ) . Overall, Victrex has a positive working capital, the liquidness place of the company is good ( 8 ) and Victrex will be able to pay its current liabilities on clip without confronting troubles. This shows Victrex has good fiscal wellness and it is placing a good mark.
When we compare Victrex ‘s current ratio with Croda International, Croda International ‘s ratio is lower than Victrex Plc. This means that Victrex has the liquid resources are sufficient to cover the short-run payments than Croda International.
( 5 ) Supply chain- Capacity: 4250 metric tons per annum
( 6 ) This was calculated by: [ ( 45- 27.9 ) / 27.9 ] A- 100 = 61 %
( 7 ) This was calculated by: [ ( 143.2 – 63.4 ) / 63.4 ] A- 100 = 125 %
( 8 ) The Group has sufficient financess available in order to run into its current support demands for both gross and capital outgo. In order to farther manage liquidness hazard to an acceptable degree, the Group has a committed bank installation of ?40m, all of which was undrawn art the twelvemonth terminal.
Victrex ‘s footing net incomes per portion have been a existent addition from 2009 to 2011. This is good signal for company in economic recession. Basic net incomes per portion were up 293 % ( 9 ) at 85.3p ( 2009: 21.7p ) which reflects an betterment in the effectual revenue enhancement rate to 24.5 % ( 2009: 28.0 % ) . This is due to a farther decrease in the UK corporation revenue enhancement rate from 28 % to 26 % with consequence from 1 April 2011, together with a UK revenue enhancement refund following understanding of a figure of period twelvemonth calculations with HM Revenue & A ; Customs.
( VictrexPlc, 2011, one-year study and histories, pp 6-7 )
( 9 ) This was calculated by: [ ( 85.3 – 21.7 ) / 21.7 ] A- 100 = 293
Through comparing P/E ratio, Victrex have worse tendency. From 2009 to 2011, Victrex ‘s PE decreased to a great extent than Croda International. With the ratio is excessively low, it shows that the net incomes per portion are increased with difference due to which the market monetary value of portions increased as a consequence of demand of portions. So, it shows that Victrex can non anticipate from investors if the company does non pay some of its debts. With Croda International, from 2008 to 2010, it has a steady addition, so, it decrease non excessively much. This is a desirable ratio ; hence, this proves that Croda International has high growing chances, so, it will be evaluated high by investors.
With dividend output, Victrex Plc ‘s ratio is smaller than Croda International. However, with ratio is high in 2011 due to the important bead in portion monetary values, Victrex still proves good public presentation of the company ( 10 ) . This show that Victrex has most likely to reinvest net income every bit good as expand company. This can make advantage about a crisp rise in portion monetary values.
( 10 ) An addition of 30 % in the full twelvemonth dividend in line with net incomes growing, this is consequences in a concluding dividend of 24.5p ( 2010: 18.6p ) per ordinary portion doing a sum of 32.5p ( 2010: 25.0p ) per ordinary portion for the twelvemonth
Decision on fiscal public presentation and the recommendation
In general, in economic state of affairs as presents, Victrex can be influenced much from exchange on the market such as clients demand, risk about price/ fiscal direction and others factor every bit good as impact of rival activity, nevertheless, Victrex still proves successful in its concern operation compared with competitors- particularly Croda International. This is a antic fiscal to put. It is due to turnover, ROCE and fixed plus turnover of Victrex achieved high ratio from 2009 to 2011 with 13.89 % , 38.83 % and 1.49 times severally. Particularly, current ratio achieve really high ratio with 3.17 times and experiences manageemnt. These prove that Victrex managed concern ; use capital efficaciously to make gross revenues in this clip every bit good as the liquidness ability is good and can pay current liabilities on clip. With optimistic figure in the fiscal, this is rather safe to put, so, Vixtrex will be possible company for investors to make up one’s mind investing.
However, in my sentiment, it is non plenty to pull many strong investors in long-run every bit good as exist in this economic varies, so, Victrex needs to seek to finish established strategic the best with specific and utile program to suitable with aims, vision and mission of the company. In add-on, to increase internal force that can assist Victrex maintain clients, adapt to alter, derive competitory advantage, increase benefit of client to supply the best solutions in the most hard fortunes every bit good as do a difference compared with other rivals, it is seem necessary for Victrex to take action to put up some new strategic better or adjust exchange in strategic. Furthermore, Victrex besides needs to involvement in hazard to happen utile ways to work out and cut down it every bit low as possible. To hold outlook from investors in the hereafter, Victrex besides should better PE better.
Besides, it is besides truly necessary for Victrex Plc to utilize TQM ( Total Quality Management ) and PDCA rhythm ( Plan- Do- Act- Check rhythm ) to better and increase effectivity in operating procedure.
Part B: EVALUATE THE USEFULNESS, EFFECTIVENESS AND RELIABILITY OF THE NON-FINANCIAL CONTENT OF THE COMPANY ‘S CORPORATE REPORT
Through this portion, it will assist client more understand about ways that Victrex communicates scheme every bit good as performs activities based on communicate information. From that, it will assist client to make up one’s mind should they put Victrex?
Overview of Victrex ‘s public presentation
With above analysis, in 2011, Victrex achieved fixed successful. It shows through turnover, ROCE and fixed plus turnover addition strongly. With this successful, it proves that Victrex performed effectual scheme.
However, in order to good communicate with investors, as Mark and Michael ( 2003 ) , utilizing suited narrative study is considered really of import. Narratives in corporate one-year studies are more of import than fiscal figures and that possible investors were more likely to read this subdivision of the study ( Henderson, 2004 ) . Harmonizing to Peter Yeoh ( 2010 ) , narrative coverage was ab initio introduced as a best fiscal revelation pattern for big listed corporations to advance user- friendly fiscal coverage. It includes Chairman ‘s study, CEO study and others study. However, the study that plays the most of import role- that is president ‘s study ( Epstein and Pava, 1993 ) . With these studies analysis, it will assist to supply a comprehensive and optimistic position for investors to assist them give determination precisely. In general, the Chairman ‘s study of Victrex met to the full the demands of a narrative study.
Language is used to film over differentiations about the causes of hapless public presentation, showing the company in a positive visible radiation. If the reader wants to understand a narrative study, they must to establish on linguistic communication and content ( Jameson, 2000 ) . So, it can easy see that linguistic communication play really of import function that help reader can cognize clearly and rapidly about Victrex ‘s fiscal is bad or good public presentation. In president ‘s study of Victrex Plc, the company mentioned to the addition of fiscal indexs such as:
Group net income before revenue enhancement increased by 26 % to a record of ?94.2m on strong organic gross growing of 14 % to ?215.8m
Basic net incomes per portion increased by 31 % to 85.3p benefiting from a decrease in the effectual revenue enhancement rate.
In acknowledgment of the group ‘s record public presentation, strong hard currency place and continued assurance in the strength and potency of concern, we are urging an addition of 30 % in the full twelvemonth dividend in line with net incomes growing.
( Victrex PLc, 2011, one-year study, p. 6 )
Language that Victrex utilize really brief and do n’t acquire lost with complicates sentences, so, readers can understand easy about fiscal information of Victrex in 2011. It is positive to turn out successful of Victrex in current state of affairs.
Beside, the Chairman ‘s study besides presents diverseness at Board degree every bit good as effectivity of the Board- particularly mentality of Victrex. These showed by clear linguistic communication and understand. With two page of this study, it can assist and back up for the stockholders or investors really much in holding a general position and understanding much more the fiscal state of affairs of the company that performed in 2011. So, the reader will experience more security when they make a determination to put more capital for Victrex Plc.
As stated by Courtis, J. K. ( 2004 ) , at rhetoric, colour plays a function in emotional reaction. The usage of coloring material in one-year studies can pull attending to corporate properties and emphasis peculiar facets of corporate behaviour. Colour can help in the comprehensibility of information by stressing and contrasting relationships.
Besides, coloring material can besides assist users of i¬?nancial information to better their resource allotment decision-making, particularly in high time-constraint environments ( Benbasat and Dexter, 1986 ) . Research by Christ ( 1975 ) suggests coloring material may besides diminish the hunt clip needed in turn uping specii¬?c information. Furthermore, coloring material may better the overall comprehensive of issues and apprehension of a job, while bring forthing less oculus strain and weariness ( Jeffrey and Beck, 1972 ) . There are seven colorss that are used to show corporate information to topics such as: tusk, Grey, green, violet, tap, blue and yellow. A survey by Courtis ( 2004 ) demonstrates there will be some benefits as the company utilize coloring material in showing its one-year study. The coloring material can assist the of import information included in the company ‘s one-year study is highlighted and, therefore it is more convenient for user to utilize. Furthermore, in order to assist the company demo its properties and highlight its specific facets of organisation behavior, the usage of coloring material in one-year studies may be necessary. It can be said that taking the right dominant coloring material for trade name is important. Besides, the usage of coloring material besides can excite the communication between information presented in the company one-year study and its users more easily.. In one-year study, all colorss are showed in logo, background, graph, rubric, exposure. With Victrex Plc ‘s one-year study in 2011- specifically in president ‘s study, colour used to be bluish for fiscal high spots, logo and sum-up of president ‘ statement. This will be presented in table below:
Table 3.1 Table 3.2 22222.PNG333333.PNG
John Williams ( 2007 ) province that blue is perceived as trustworthy, reliable, and in fiscal matters responsible and secure- particularly popular coloring material with fiscal establishments, as its message of stableness inspires trust. This shows that Victrex has the signal of safety and good intelligence with a positive way alteration and fiscal establishment is stability trust. This shows clearly through one-year study of Victrex with confident about an first-class fiscal place with a healthy balance sheet and strong hard currency coevals every bit good as addition strongly of gross and net income before revenue enhancement. The ensuing hard currency balance as at 30 September 2011 was ?72.3m with no debt ( 2010: ?77.3m and besides no debt ) . This is positive mark that show that Victrex be able to avoid hazards of autumn into debt and more serious is bankruptcy. Group gross was up 14 % to a record of ?215.8m ( 2010: ?189.5 ) reflecting a strong public presentation from both of concern units. Resulting Group net income before revenue enhancement was a record of ?94.2m, up 26 % on 2010 ( ?74.9 ) . With this coloring material, it helped Victrex to make a positive image among consumers and investors.
Graph is one of an effectual communicating tool every bit good as usage the most utile to readers can understand easy one-year study. “ They are besides a utile and flexible medium for explicating, construing and analysing numerical facts. They permit the presentation of measures informations in a simple and effectual mode, facilitate comparing of specific points and uncover tendencies and relationships. If decently constructed, artworks highlight and clear up important tendencies. Improperly constructed artworks, on the other manus, can falsify tendencies, mislead readers and adversely influence perceptual experiences of corporate public presentation ” ( CICA, research study, 2008, p 41 ) . Well-designed graphs make it easier to place tendencies and relationships among variables ( Tufte 1983, 1990, 1997 ; Vessey and Galletta, 1991 ) . The use of graphs has been reported as an of import agencies of pass oning accounting information in the accounting sphere ( Holmes, 1984 ) . Recently, the use of graphs has become widespread ( Beattie et al, 2008 )
In 2011, with one-year study of Victrex, artworks is used in Director ‘s study when they shows comparison the value invested in between Victrex Plc with FTSE 250 Index on the same clip by line chart and the rate of other factors by pie charts. Harmonizing to cognitive fir theory ( Vessey, 1991 ; Vessey and Galetta, 1991 ) , graphs facilitate designation of tendencies and relationships. This explains why graphs are better than tabular arraies for determination undertakings that involve uniting information about multiple variables to do holistic ratings ( Tuttle and Kershaw, 1998 ) . So, it is non surprising that Victrex can turn out a big set of possible options and pull many investors. Besides, as stated by Amer ( 1991 ) , suitably prepared graph can be utile to determination shapers when exposing tendencies or relationship in information. This will be showed as below:
With utilizing color graph to show fiscal informations, harmonizing to Leivian ( 1980 ) , it helped Victrex pull attending and memory of the readers recall ability is usually better than for numerical.
Besides, David ( 2001 ) study that users of one-year studies and investors may pass merely 15 proceedingss looking at a study during their determination devising. Many investors look merely at the one-year study and merely the narrative subdivision of it ( Fisher & A ; Hu, 1989 ) and, moreover, frequently look merely at the fiscal graphs in doing their determination ( Zweig, 2000, p. 67 ) . However, with presidents ‘s study, Victrex does n’t utilize artworks to show fiscal informations every bit good as activity although there are rather a batch of ratio that analyzed and compared such as group net income before revenue enhancement, footing gaining per portion, dividend. While other surveies examine the relationship of good and bad fiscal public presentation to ocular support, utilizing EPS and net income earlier revenue enhancement as fiscal indexs of public presentation, Beattie and Jones find that companies with “ good public presentation ” ( 1992a, 1992c ) and “ favorable public presentation ” ( 1999a, 1999b ) are significantly more likely to utilize fiscal graphs. With Victrex, it besides does n’t hold, so, this shows that Victrex was hapless presentation. It makes users such as stockholders, clients or investors hard to understand and roll up significance of fiscal informations or activities of the company. Their clip pass for analysis is so much but uneffective. This is failing of one-year study of Victrex Plc that the company should seek to mend to do one-year study clearly and easy understand by utilizing artworks, particularly the stage comparing and analysis.
Decision on rating of non-financial information
In drumhead, the utilizing of graph, coloring material, and linguistic communication is truly utile for reader to understand easy and clearly about narrative study. In Victrex Plc ‘s one-year study, we can see that the company used rather successfully the coloring material and linguistic communication. Look at one-year study, reader and user can easy understand fiscal information of the company. However, Victrex still exist many restriction in utilizing artworks. It does n’t truly effectual application. So, to assist users and readers can understand easy fiscal informations of the company through the old ages, Victrex needs to seek much more in utilizing artworks every bit good as better better coloring material and linguistic communication to accomplish perfect every bit highest as possible of the one-year study.