Avon gains as Sterling drops

Melksham, UK – Avon Rubber plc has benefited from the post-Brexit depreciation of Sterling, posting a 6% growth in full year 2016 revenue to £142.9 million (€166.2 million), the group reported 16 Nov.

Sales at Avon’s Protection & Defence segment rose 2% to £100.9 million and Dairy by 18% at £42.0 million. Earnings (EBITDA), meanwhile, rose 13% to £30.8 million and operating profit rose 8% to £21.8 million.

In the protection and defence segment, Avon posted a 4% rise in earnings (EBITDA) to £22.4 million with operating profit flat at £16.0 million.

The segment received a boost from a fourth quarter approval by the launch of its CBRN/CO (carbon monoxide) escape hood and its “immediate” approval from the US National Institute for Occupational Safety and Health (NIOSH), according to Avon chairman Davis Evans.

Avond’s mask production, he said, “has been focused on deliveries to the US Department of Defense (DOD) under our ten-year sole-source contract for the JSGPM M50 mask.”

The company has also received a $9-million (€8.4 million) order from the New York Police Department (‘NYPD’), of which approximately a third is carried forward for delivery in the first quarter of 2017.

Avon received orders for 169,000 mask systems during the year, with an order book of 30,000 systems left for deliveries in 2017 financial year.

“Since the yearend we have received a further order for 131,000 mask systems from the DOD,” Evans added.

In the dairy segment, earnings (EBITDA) and operating profit grew 27% and 12% to £9.8 million and £7.2 million respectively, reflecting the acquisition of InterPuls, and the growth of the Milkrite | InterPuls brand. This offset lower volumes caused by the impact of the low milk price and some OEM resourcing.

Dairy revenue increased by 18% to £42.0 million, although market were weak during the causing farmers to overuse consumables and defer investment.

In terms of dairy outlook, said Evans, “huge potential” remains in emerging markets, especially in Brazil, Russia, India and China. In those regions, growing demand for animal protein in diets and the expanding middle class has led to an increase in demand for dairy products.

The group opened a sales and distribution centre in Brazil in 2015 to service Brazil and the wider South American market following the same model as its Chinese operation in 2012. Sales in both regions have grown “substantially”, according to the Avon boss.