Avon Rubber's (LON:AVON) trading statement (2 February) was reassuringly upbeat with Dairy benefiting from a stronger milk price and the Protection & Defence division continuing to see encouraging order intake. International orders for Protection & Defence are progressing, although final timing remains unpredictable. Cash generation was particularly strong, due to receiving a large customer receipt on the last day of the quarter, giving the group a net cash position of £11.1m.
FY17 has got off to a strong start, with both the Dairy and the Protection & Defence divisions reporting organic growth and a higher deliverable order book for FY17 compared to FY16. Underlying trading conditions have improved in Dairy. After a challenging 2016, the milk price has gradually started to increase since last September. According to the latest US data, the average price was $18.80/cwt in December 2016 which is up 30% from the year’s low in May of $14.50/cwt.
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