Avon ups dividend and reports positive outlook

Avon Rubber increased its interim dividend by 30% and said it was confident about its prospects for the year as the company reported a two-thirds increase in first-half profit.

Adjusted pretax profit for the six months to the end of March rose 67% to £14.7m as revenue increased 28.7% to £94.7m. Excluding currency movements profit rose 39.8% and revenue increased 9.5%.

Results were boosted by the acquisition at the start of 2020 of 3M's helmets and armour business. Avon said trading was in line with expectations so far in the second half.

The FTSE 250 company increased its half-year dividend to 9.02p from 6.94p a year earlier "reflecting our continued commitment to our progressive dividend policy". Its two businesses specialise in respiratory and ballistic protection and milking products for the dairy industry.

Paul McDonald, Avon's chief executive, said: "Avon Rubber has continued to make excellent progress, delivering continued strong organic revenue and profit growth across both businesses … Both businesses remain robust and the group has good liquidity, a strong balance sheet and excellent medium-term revenue visibility. As a result, the board remains confident of achieving its expectations for the current financial year and delivering its strategy over the medium term."

Avon said it had a strong order book of £115.5m and that it had £48.5m of net debt excluding lease obligations at the end of March. The company had £23.7m of financial headroom and predicted this would grow in the second half.