Avon Rubber slips on US milk farm depression

16th Aug 2013 09:40

A depressed US dairy industry has hit Avon Rubber in the first 20 weeks of its second half-year but were compensated by strong military growth.The small cap company said the US dairy market remained slowed by falling milk prices and high feed costs, causing farmers to reduce spending on consumable items.In part because of the slow market strong and partly due to strong sales growth of its branded Milkrite ImpulseAir cow milking teats, sales to Avon's white label manufacturer customers had fallen, which along with a delayed launch to its innovative milking cluster exchange service had weighed on the dairy division.But the board stressed that a strong performance in Protection & Defence had compensated for the slower than expected dairy market and that it remained confident the group would meet full year market expectations.Protection was boosted by a particularly strong contribution from the historically volatile Avon Engineered Fabrications, maker of hovercraft skirts and collapsible plastic fuel and water storage tanks, which had won new military business that can be supplied during the current financial year.Elsewhere, its M50 gas mask had been delivered to the US Department of Defense at a similar rate to the comparable period last year, while sales outside the US military had been significantly stronger than in 2012.Plans to expand and enhance the product ranges, excitingly called Project Fusion, are "on track", with new products for firefighters and military expected to be available for sale later in the calendar year.Shares in Avon Rubber, after rising by over 60% in the previous 12 months, were down 2.9% to 475p at 10:55 on Friday.OH