Avon Rubber backs full-year expectations
Avon Rubber backed its full-year outlook on Monday as it said second-half trading was in line with expectations.
The company still expects revenue to grow by around 4% at constant currency in the year to 30 September, with the adjusted earnings before interest, tax, depreciation and amortisation margin "modestly" ahead of last year.
Avon said the protection unit enjoyed a "strong" year, underpinned by the performance of its military business.
In Law Enforcement, meanwhile, the performance has been stronger in the second half of the year. However, as expected, the impact of delays resulting from the extended US government partial shutdown in the first half will result in a year-on-year revenue drop against a strong prior year comparator.
Avon said its balance sheet remains strong and the business continues to be highly cash generative.
It said cash conversion for the year and the resulting cash position will be hit by the timing of cash receipts in respect of the $16.6m Rest of World Military mask system contract, which it now expects to receive next year, and around £2m of costs relating to the acquisition of 3M's ballistic protection business.
Chief executive Paul McDonald, said: "We are on track to deliver a strong set of results in what has been a transformational year for Avon Rubber.
"The US Department of Defence contract awards, totalling $340m, for the M53A1 and M69 mask systems and the acquisition of 3M's Ballistic Protection business have significantly strengthened our medium-term outlook."
At 1010 BST, the shares were up 1.7% at 1,706p.