Avon Rubber’s (LON:AVON) strong first half results allayed any concerns that the change in management team might have distracted this growth company from the task in hand. In fact, H117 numbers proved quite the opposite. Top-line growth has marched on apace and the CEO has shown ruthless focus in ensuring that R&D is concentrated on financially viable projects to stimulate further growth. A major new contract win announced yesterday should assuage any concerns about the M50 programme.
Strong top-line growth and order intake
H117 results demonstrated that Avon Rubber is successfully delivering on its strategy of growing organically through good execution and strategic acquisitions. Revenue was up 7% organically, with flat margins despite slightly higher costs. EPS was flat year-on-year, but this is purely a function of an anomalously low tax charge in FY16 of 1%. The tax rate for FY17 is expected to normalise at 19%. Orders were up 9% y-o-y and we expect further contract wins in the second half.
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