Avingtrans back in profit amid global recovery

9th Feb 2011 09:07

Component manufacturer for the medical, energy, industrial and aerospace sectors Avingtrans said the worst of the downturn is behind it as it moved to profit in the six months to November 30 while warning of the impact of rising commodity costs.The Nottingham-based firm posted a pre-tax profit of £510,000 for the period, against a loss of £61,000 over the same period the previous year. Revenues jumped to £16.9m from £13.5m.Avingtrans has benefited from the improving global economic outlook. While many of its customers are UK-based firms such as the aero-engineer Rolls-Royce, they are mostly not dependent on the UK economy. One of Avingtrans' businesses that is exposed to the domestic economy, Crown, which designs pole and support systems for road signs, has seen new orders delayed due to public sector budget constraints.Chief executive Steve McQuillan told ShareCast that Crown typically only accounts for about £1m to £1.5m of revenues a year, though it will be less this year. He said that the company's aerospace and industrial divisions were close to pre-economic crisis levels.Strong growth in China is helping to drive revenues higher, with all three of the company's divisions making progress in the fast-growing market. Sigma China, which makes components for the aerospace division, is now making a profit, Avingtrans said. The company now has about 100 employees in China, McQuillan said.With most of Avingtrans' business focused on overseas markets, higher commodity prices are a bigger worry than domestic economic worries, with steel prices the main concern."We have arrangements with customers so we can easily pass these rises on, " McQuillan said. Chairman Roger McDowell said the company intends to recommence paying a dividend with the final results this year."The commitment to resume dividend payments at the full-year stage is a strong indication of confidence in the ongoing turnaround in the business," the broker Finncap said.