Avon Rubber's (LON:AVON) FY18 report demonstrates the success of the new business strategy, delivering growth across both divisions. The product portfolio has been updated and the company is winning contracts in new geographies. The company has also taken action to address its business structure and production footprint. We see continued opportunity for organic growth supported by selective bolt-on acquisitions.
FY18 demonstrates momentum behind strategy
FY18 reported revenue of £165.5m (FY17 £159.2m), equated to 8.7% growth at constant currency. FY18 adjusted operating profit of £27.3m (FY17 £26.1m) reflected profitable growth in both divisions, up 11.8% on a constant currency basis, demonstrating momentum behind the business strategy. FY18 adjusted EPS of 77.1p (FY17 83.8p) was fractionally down at constant currency due to a lower tax provision release versus FY17. However, FY18 dividend of 16.02p (FY17 12.32p) reflected management’s confidence in the business going forward. Cash conversion was strong at 108.2% of EBITDA, supported by the contribution from AEF disposal for $9.25m.
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