Avon Rubber "well positioned" for growth in 2014

ERJ staff report (TP)

London − Avon Rubber PLC said on Thursday (6 February) that it is well positioned to deliver growth in 2014 following a positive start, boosted by the momentum of trading in 2013, despite being hit by product launch delays in the US, reported Alice Attwood for Alliance News.

The manufacturer of rubber-based products for the manufacturing sector said in its interim management statement for the period from 1 October 2013 to 5 February 2014, that its Protection and Defence business has carried an improved order into the new financial year, which has "resulted in a substantially stronger first quarter performance compared to last year".

The company said that its contract with the US Department of Defense has continued well, with deliveries of mask systems and filters remaining on schedule. Avon said it expects to deliver at normal levels through to its half-year but did not disclose financial details of the contract.

Non-DoD order intake has improved steadily, said Avon, and demonstrates year-on-year progression, noting that the uptick in orders from South America has been growing particularly well.

Avon said that its Engineered Fabrications division has seen a continuation of the high level of order receipts experienced in 2013 and expects to deliver a similar first-half result to 2013, though notes that it is too early to predict for the second-half due to limited visibility.

The company is soon to launch a fire service product, Deltair, a self-contained breathing apparatus (SCBA) system. The launch was initially planned for during the reporting period but the firm notes that the US Fire market as a whole has experienced delays in the approval of new products under the 2013 standard caused by issues at the government testing house.

Avon said it has orders for the SCBA in hand and that the delay in supplying the new product has also hit other suppliers. "We do not expect resolution of this industry wide issue until the second half of our financial year," it adds.

Avon said dairy markets have returned to more normal buying patterns for its products as animal feed prices have also been reduced. The company also said that its cluster exchange service, launched in late 2013, has been received well in the US, with financial benefits expected to be seen during the current financial year.

While releasing no further financial details, Avon said that the group's balance sheet remains robust, with the net debt as at 31 December 2013 at a significantly lower level at £4.8m (€5.8m), from £10.9m (€13.1m) at the end of September.

The company said that it remains confident it will meet its full-year market expectations after a positive start to the year, although notes that it excepts a "more even half-year split than in previous years".

Shares in Avon Rubber were trading down 0.83 percent at 659 pence (€7.93) per share Thursday (6 February) morning.

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Full story from Alliance News