1st May 2019 08:53
LONDON (Alliance News) - Avon Rubber PLC raised its interim dividend Wednesday despite profit narrowing amid lower revenue, as it continued to make progress growing its order book.
For the six months ended March, pretax profit narrowed sharply to GBP3.4 million from GBP9.4 million the year prior. This is after revenue fell 5.3% to GBP73.6 million from GBP77.7 million the year before.
Avon Rubber makes gas masks and cow milking equipment. It said its financial performance in first half of the year was "adversely impacted" by the recent US government shutdown and by "challenging" dairy market conditions
Shares in Avon Rubber were 8.0% lower at 1,356.00 pence on Wednesday.
The company said that "as expected" its order intake and order book growth was ahead of revenue performance in the first half of the year. This provided it with "confidence" for its performance in the second half of the year.
During the period, Avon Rubber took orders worth GBP94.9 million compared to GBP88.3 million the year prior. The order book at the end of the period stood at GBP59.1 million, up 46% from GBP40.6 million the year before.
"It has been a transformational six months for Avon Rubber, securing USD340 million of key long-term contracts and growing our order book across both businesses," Avon Rubber Chief Executive Officer Paul McDonald said.
"The US Department of Defense contract awards for the M53A1 and M69 mask systems have transformed our medium-term outlook and confirmed our leading position in respiratory protection with the US Military," McDonald added.
"This active diversification of our product portfolio and contract base also provides us with a greater range of opportunities, together with improved medium-term visibility and flexibility to manage order intake and fulfilment timing," McDonald continued.
Avon Rubber proposed a 6.94 pence per share interim dividend, up 30% from 5.34p the year prior.
McDonald explained that with the "strong contract momentum" for its Avon Protection unit, the company remained "confident" it will deliver on its full-year expectations.
"Building on the significantly enhanced contract base, the ongoing benefits of our strategy and the strength of our broad, innovation-led product portfolio, the board remains excited about our longer-term growth prospects", McDonald concluded.
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