Melksham, UK – Challenging diary market conditions and a US government partial shutdown earlier this year have impacted first half results at Avon Rubber.
Despite continuous growth in order-intake for its defence rubber mask systems, Avon reported a 24.1% year-on-year decline in adjusted operating profit before tax at £8.8 (€10 million) for the half-year ended 31 March.
Avon attributed the drop to weak dairy market conditions in the first quarter, which led to reduced revenues for its dairy liners & tubing division.
The company’s total received orders for the first-half rose 7.5% to £95 million, while revenue declined 5.3% to £73.6 million, Avon reported 1 May.
Commenting on the results CEO Paul McDonald was upbeat about as order-intake and order-book growth provided confidence for the second half.
Over the “transformational six months”, he said, Avon secured $340 million (€305 million) of key long-term contracts and grew order-books across both businesses.
“Despite the financial performance in H1 being adversely impacted by the US government partial shutdown and challenging dairy market conditions, the board remains confident in delivering full year expectations,” McDonald added.
An opening order book of £59.1 million and a recently-announced $16.6 million mask system contract are expected boost Avon in the second half of the year.
In addition, the company expects a rebound in milk prices and farmer confidence in the second half of its fiscal year.