MELKSHAM, England—Challenging dairy market conditions and a U.S. government partial shutdown earlier this year have impacted first half results at Avon Rubber.
Despite continuous growth in order intake for its defense rubber mask systems, Avon reported a 24.1 percent year-on-year decline in adjusted operating profit before tax $11.2 for the six months ended March 31. Avon attributed the drop to weak dairy market conditions in the first quarter, which led to reduced revenues for its dairy liners and tubing division.
The company's total received orders for the first-half rose 7.5 percent to $106 million, while revenue declined 5.3 percent to $93 million, Avon reported May 1.
Commenting on the results CEO Paul McDonald was upbeat about as order intake, and order book growth provided confidence for the second half. Over the "transformational six months", he said, Avon secured $340 million of key long-term contracts and grew orders across both businesses.
"Despite the financial performance in (the first half) being adversely impacted by the U.S. government partial shutdown and challenging dairy market conditions, the board remains confident in delivering full year expectations," McDonald said.
An opening order of $75 million and a recently-announced $16.6 million mask system contract are expected boost Avon in the second half of the year.
In addition, the company expects a rebound in milk prices and farmer confidence in the second half of its fiscal year.