While Brexit is often viewed as a negative for the economy and for many companies, it could prove to be a positive catalyst for others. Victrex (LSE: VCT) and Ashtead (LSE: AHT) viagraonline-canadarxed.com have both reported encouraging financial performance today, with the two companies having been boostedby Brexit. Heres how it could continue to send their financial performance higher.
Weaker sterling
Manufacturer of high performance polymers Victrex has been helpedby weaker sterling. Since the EU referendum in June, the value of the pound has declined by around 18% versus the US buycialischeap-storein.com dollar, while its also much weaker against a number of other currencies. This has helped the company since its a global exporter thatreports in sterling. Over 97% of its sales are outside of the UK and while it hedges up to 12months in advance, a more favourable currency environment should be felt in 2017 and 2018.
Victrex now expects its profits for 2017 to be ahead of previous guidance due to the positive currency effects. This will enable it to buy cialis online support front-end growth investment, which should help to drive adoption of its mega-programmes. As a result, the long-term profitability of the company should be improved. Alongside its rise in core volumes of 9% in the second half, this could help to push Victrexs share price higher.
Improving performance
Its a similar story for rental equipment company Ashtead. Weaker sterling boosted its top line by 15% in the first half of the year. However, even without the effects of currency included, its rental revenue still increased by an impressive 13% on an underlying basis. This was tricare pharmacy aided by a sound strategy thatincludes a clear and consistent focus on organic growth, supplemented by bolt-on acquisitions.
The effect of this on underlying earnings in the first half of the buy generic cialis online year was positive, with the companys bottom line up by 9% versus the same period of the previous year. Thats despite currency gains being partially offset by the impact of lower gains on fleet disposals as the company reduced its capital expenditure. But with EBITDA (earnings before interest, tax, depreciation and amortisation) margins being at the highest ever level of 49%, Ashteads profitability is likely to rise.
Outlook
Ashtead expects its full-year results to be ahead of expectations after todays update. It currently trades on a price-to-earnings growth (PEG) ratio of just 1.2, which indicates that its a sound long-term buy. And with next years expected 12% rise in earnings likely to happenas currency effects have a positive impact, now could be a good time to buy it.
Similarly, Victrex is likely to benefit from weaker sterling. Although its bottom line is due to rise by just 4% this year, the fact that nearly all of its sales are outside of the UK means that it stands to be a major beneficiary of Brexit. With negotiations between the UK and EU set to startnext year, sterling could weaken further and boost buycialischeap-storein Victrexs guidance and share price over the medium term.
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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has recommended Victrex. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.