28th Mar 2014 12:35
LONDON (Alliance News) - Avon Rubber PLC said Friday it expects its half-year results to be "substantially" better than 2013 after strong first-half trading in its Protection and Defence business.
In a half-year pre-close statement the firm said it also expects full-year operating profit to be toward the upper end of market expectations.
Avon Rubber said strong first-half trading in the Protection and Defence business has reflected its strategy of increasing levels of higher margin non-DoD sales, with the mix of sales in the second-half likely to be more in favour of lower margin DoD sales as its fulfills a 85,000 mask systems order received in the second quarter and further US government budgets are released. "We therefore expect some first half bias to the results of this business for the year as a whole," said the firm.
The company has completed the shipment of export orders brought forward into this financial year and trading in the second-half will benefit from delivery against Avon's largest ever individual US Homeland Security order, worth GBP4 million which was received in the second quarter. Avon said the positive order intake from the South American market and sales of its new Deltair fire SCBA - which has now passed all the tests required for regulatory approval - will also prove beneficial.
In its Dairy division, Avon said market conditions have returned to historical buying patterns for its consumable products because animal feed prices have returned to more normal levels. The company also notes that the cluster exchange service, which was launched at the end of 2013, has been well received by the US market and this should provide further growth opportunities through the remainder of our financial year.
After a period of strong conversion of profits into cash and Avon said it expects half-year net debt to be significantly lower than the GBP10.9 million reported the previous year.
"The first half of 2014 has been another period of excellent progress for Avon. Both divisions have performed well, leaving the Group well positioned to deliver for the remainder of 2014 and beyond," said Peter Slabbert, Chief Executive.
The firm will announce its half-year results April 30, 2014.
Shares in Avon Rubber were trading higher Friday afternoon, up 2.10% at 622.80 pence per share.
By Alice Attwood; [email protected]; @AliceAtAlliance
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