30th Apr 2014 14:47
LONDON (Alliance News) - Avon Rubber PLC Wednesday reported an increase in profit for the first-half, driven by a strong performance from its protection and defence division.
The manufacturer of rubber-based products posted pretax profit of GBP5.7 million for the six months to March 31, up from GBP5.3 million a year earlier, as revenue rose 3% to GBP61.5 million from GBP59.6 million in the comparable period.
On an adjusted basis, which excludes exceptional items, defined benefit pension scheme costs and the amortisation of acquired intangibles pretax profit amounted to GBP8.0 million up from GBP5.6 million.
The company experienced mixed fortunes across its protection and defence and diary business arms.
The protection and defence division saw revenue increase to GBP45.6 million from GBP43.5 million, arising from the shipment of export orders bought forward into this financial year and growth in sales of United States Department of Defence (DOD) spare parts.
Revenue for the diary business however was 2% lower at GBP15.9 million from GBP16.1 million due to the negative translation effect of the weaker dollar.
Financially, the company said net debt decreased to GBP5.5 million from GBP10.9 million. The decrease was attributable to strong operating cash conversion and the weakening US dollar, which reduced the reported number by GBP200,000 due to the translation of dollar debt, the firm said.
Looking ahead, the firm said its protection and defence business is expected to continue to benefit from the security of the long-term DOD contract, to increase its market share in law enforcement and foreign military markets and to improve its position in the North American fire market.
In addition, despite its troubles Avon said the diary business is well positioned in markets with long-term growth potential.
"There remain opportunities to enhance profitability through increasing sales of our proprietary Milkrite technology, by enhancing and diversifying our distribution capability and through the expansion of the cluster exchange service," Avon said of its diary arm.
The company increased its interim dividend 30% to 1.87 pence per share, from 1.44 pence.
The stock was trading at 626.60 pence Wednesday afternoon, up 15.60 pence or 2.6%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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