Defence products boost Avon Rubber

Wednesday, 1st May 2013

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Pre-tax profit has increased by more than a quarter at manufacturer Avon Rubber in the first half of its financial year, led by growth in its protection and defence division.

The Melksham-based business has posted pre-tax profit of £5.7m for the six months to 31 March 2013 – up from £4.6m for the same period last year.

Revenue has also increased from £49.6m to £59.6m.

The company said it has a strong order book in its protection and defence business with a £14.7m order from the Middle East a “strong contributor” to its growth, as well as increased sales to the US Department of Defense (DoD).

It added there were also “significant sales” to Oman, New Zealand and Chicago Police Department during the first half.

Revenue fell slightly in its dairy division because of “fluctuating” demand for its products as farmers have been impacted by lower milk prices and higher feed costs. Avon Rubber said it has previously experienced periods of cyclical market weakness like this and this period has coincided with a planned rise in the division’s cost base as it invests in its infrastructure.

Chief Executive Peter Slabbert said: “We are delivering our strategy. We have achieved strong growth in the first half of the year and the board is confident of making further progress as the year evolves, despite the challenges of the uncertain global economic and political environment and the temporary slowdown seen in the first half year in the US dairy sector.

“The protection and fefence business is expected to continue to benefit from the security of the long term DoD contract and an increase in market share in the US homeland security and foreign military markets.

“The dairy business remains well positioned in markets with long term growth potential. There will be opportunities to enhance profitability by using the strong Milkrite brand, our distribution capability and by adding innovative new products currently in development.”

Earlier this month Avon Rubber announced the acquisition of VR Technology in Poole. The business said it will continue to pursue opportunities to grow its markets and technologies.

 

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