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 strong first half results allayed any concerns that the change in management team might have distracted this growth company from the task in hand. In fact, H117 numbers proved quite the opposite. Top-line growth has marched on apace and the CEO has shown ruthless focus in ensuring that R&D is concentrated on financially viable projects to stimulate further growth. A major new contract win announced yesterday should assuage any concerns about the M50 programme.

Last updated on 24/05/2017

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 19.6 16.2
2016A 142.9 30.8 21.6 74.2 14.8 10.5
2017E 168.9 35.7 25.0 66.6 16.5 10.1
2018E 178.7 36.9 26.9 71.4 15.4 9.7

Last updated on 24/05/2017

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 $18.70/cwt in February 2017, which is up 29% from last year's low in May of $14.50/cwt.

Last updated on 02/05/2017

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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