Avon Rubber 02/02/2012
A trading update from gas masks to dairy products specialist Avon Rubber (AVON) has confirmed it is on track to meet current year expectations, but it is likely to be second half loaded.
VEGA, the technology consultant backed by Growth Company Investor at 186.5p, continues to delight with bullish news flow – chief executive Phil Cartmell has just announced new business with the European Space Agency worth €2m (£1.38m).
The company has been awarded a new two year work package, with a potential two year extension, to provide support and maintenance for a range of software applications used by the European Space Agency for spacecraft missions flown from its operations centre in Germany. The work, which falls within a framework contract announced by the group last month, is worth at least €2m over four years, and VEGA successfully beat off three other consortia to secure the work.
VEGA recently cheered investors with strong half-time figures to October that revealed bumper sales growth in each region and market sector. Now firmly focused on the aerospace, defence and government markets, VEGA reported a 20% pre-tax profit leap to £2m on sales up 25% to £30.6m. Cartmell also flagged up healthy organic growth of 20%, and said VEGA was off to a flyer in the second half-year.
City forecasts for the year – before this most recent European Space Agency news – suggested profits of £4.6m and earnings of 15.2p, which would place the shares on an undemanding prospective p/e ratio of 13.3. Investors can expect further upbeat news from this stellar performer. We remain strong buyers at the current price.
Market cap: £37.5m
PE Forecast: 13.3
Share price: 202.5p
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