Even though first-half results from Avon Rubber (AVON) faced a tough comparison with last year's big order for 52,000 respirators, the group delivered a 9 per cent increase in adjusted cash profits to £12.2m. The lion's share of profits came from the group's dairy operations, where stable milk prices, geographic expansion and production innovation drove a 22 per cent rise in operating profits to £3.3m as the group gobbled up market share.
But margins in protection took a slight hit as commercial work was replaced with less profitable Depart of Defence contracts. Divisional demand remains strong, though, with order intake of £47m significantly boosted by a growing need for fire gear - management notes that Avon is one of the few suppliers of approved products in this space.
Cash balances, meanwhile, increased by 233 per cent to £7.3m. Management tells us that strong cash generation will be used to make further investment in the business and to make acquisitions.
