Avon Rubber (LON:AVON) (AVON, 166p, £51.0m) Finals to September 2010, ahead of expectations,  saw revenues rise to £117.6m (£100.9m) with gross profits of £28.32m (£24.38m), a gross margin of 24.1% (24.5%) with lower distribution costs at £4.53m (£4.8m) and admin costs at £14.54m (£16.61m) leaving underlying op profits up to £11.16m (£5.51m) and PBT at £9.03m (£6.18m) with 15.2p (8.3p) EPS. The group has recommenced a dividend with a recommended 1.5p. The year saw ramping production to meet both military and civilian demand for its masks and filters, aided by the expansion of the Cadillac filter line, together with a return to profits at its fire protection business. The group outsourced European dairy production during the year, reducing costs, and achieved a renewed cheaper borrowing facility for 3 years  Protection & Defence saw revenues increase 18.5% to £90.2m (£76.1m) with op profits up 46% to £6.5m (£4.5m) aided by the steady demand from the YS DOD + an increasing demand for consumables. The UK military is winding down this year demand for the S10 mask but global demand growth for the 50 series mask should help offset the impact. The fire protection business returned to profits and the fabrication business also performed well. Dairy revenues increased 10.5% to £27.4m (£24.8m) with op profits up to £4.6m (£3m) aided by improved market conditions on the back of higher milk prices, increased market share aided by new product development and the outsourcing of the European operations.  Avon has flagged a concern for the future, that the US DOD will open the filter supply for the respirator masks to a second source – introducing competition, though that move may be a year or so away at the earliest.With further revenues and profit gains expected this year we see the shares as still offering some 20% upside so maintain the Buy recommendation – but investors should bear in mind the need for the group to offset the impact of competition in the US Filter line in a year plus. BUY  

Chamberlin Plc (LON:CMH) (CMH, 93.5p, £6.95m) Interims to September saw revenues rise to £18.32m (£14.22m) with gross profits of £3.26m (£2.10m), gross margins of 17.8% (14.7%) with op expenses of £3.04m (£2.73m) giving a return to underlying op profits of £0.26m (loss £0.59m) and an adjusted…

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