Avon Rubber (AVON)

Business description

Avon Rubber designs, develops and manufactures products in the respiratory protection, defence (71% of 2016 sales) and dairy (29%) sectors. Its major contracts are with national security and safety organisations such as the DoD.

Investment summary

Avon Rubber's Q117 trading statement was reassuringly upbeat with Dairy benefiting from a stronger milk price and the Protections & Defence division continuing to see encouraging order intake. Both divisions reported organic growth and have a higher deliverable order book for FY17 compared to FY16. The company's major recent acquisitions, Argus and InterPuls, are both performing well. New CEO Paul McDonald is the former MD of Dairy and therefore is already known to many and as such should be seen as a good appointment with a track record of decisiveness and getting things done.

Last updated on 04/04/2017

Y/E Sep Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2015A 134.3 26.6 19.8 56.1 18.5 15.3
2016A 142.9 30.8 21.6 74.2 14.0 9.9
2017E 167.6 35.5 24.9 66.2 15.7 9.5
2018E 176.4 36.8 26.8 71.1 14.6 9.0

Last updated on 27/03/2017

Latest video

Executive Interview - Avon Rubber 2015 Preliminary Results

Industry outlook

Despite pressured budgets, the protective and consumable nature of Avon's products provides resilience. The emerging portfolio effect should enable continued growth, while dairy expansion in the BRICs and the sales synergies from the InterPuls acquisition provide further long-term opportunities as the milk price recovery takes hold. According to the latest US data, the average price was $18.08/cwt in December 2016, which is up 30% from the year's low in May of $14.50/cwt.

Last updated on 04/04/2017

Key management

David Evans, Chairman
Paul McDonald, CEO
Paul Rayner , CFO

Company address

Hampton Park West
Semington Road
Melksham
Wiltshire
SN12 6NB
United Kingdom
+44 (0)1225 896800.
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