Avon Rubber's (LON:AVON) pre-close has confirmed that the group will meet market expectations and that performance in H217 has continued apace. With positive mix effects in Protection & Defence and continued strengthening in Dairy, we believe that the eventual revenue and margin mix may alter slightly but that our profit levels will be achieved. With CEO Paul McDonald signalling continued confidence into 2018 and with further medium-term product developments to come through in both divisions, we continue to view Avon as delivering in the short and medium term.
Positive trends in both divisions
The pre-close statement showed that both the Protection & Defence (P&D) and Dairy divisions continued to progress positively. In P&D, 152,000 mask systems and 144,000 spare filter pairs are expected to be delivered, while the flexibility in the group means it will be able to fulfil the May 2017 order for 37,000 FM50 general purpose masks in the current financial year, with a consequential benefit to mix. Likewise, the supportive market environment in Dairy has allowed the positive growth trends seen in the division to continue into H2 with a particularly pleasing performance from InterPuls, which had previously been more affected by capital spend delays in the sector.
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