Acquisitions on the radar for buoyant Avon Rubber
The Melksham, UK-based group reported an 18.9% year-on-year rise in operating profit from continued operation, to £9.9 million (€11.2 million), on first-half sales of £77.7 million – 5.9% higher than a year ago.
The gains over the six months to 31 March reflected increased demand for Avon Protection’s ‘law enforcement’ products, positive military order intake and growth in the farm services market, Avon reported 2 May.
“We have delivered strong financial results, with underlying performance more than offsetting currency headwinds, whilst continuing to build the order book,” said CEO Paul McDonald.
Avon’s boss also linked the performance to strategic actions being implemented by the group in its core markets.
“Building on this platform, and with the momentum from our expanding product portfolio, the board remains confident on delivery of its current year expectations and is excited by the medium-term prospects for the group,” said McDonald.
In its interim report, Avon highlighted a £4.4-million investment programme in R&D projects during the first six months of the year as well as its divestment of AEF, a US based manufacturer of hovercraft skirts and bulk liquid storage tanks.
“Our strengthened balance sheet will enable us to execute on these acquisition opportunities where our commercial and financial criteria are met.”
Backing the positive outlook, Fiona Cincotta, senior market analyst at CityIndex said Avon’s status as the sole gas mask contractor to the US department of defence gives it an enviable market position, especially amid current terrorist threats and conflict in the Middle East.
“Demand from both military and law enforcement agencies is reflected in a very strong order book, positioning Avon well to keep the earnings momentum going into the second half,” said Cincotta.