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Avon Rubber (AVON)

Business description

Avon Rubber designs, develops and manufactures products in the protection (70% FY18 sales) and dairy (30%) sectors. Its major contracts are with national security organisations such as the US DoD. Over 70% of 2018 sales were from the US.

Stock data

Market cap.£403.3m
Last close1,300.00p
High / Low (52 weeks)1475.0p / 1180.0p
Stock market listingLN
Forecast net cash (£m)61.9
Forecast gearing ratio (%)N/A
SectorAerospace & Defence

Price performance

Relative *(1.5)(4.8)10.4

* % Relative to local index

Other companies in sector Show

Company news

Y/E Sep Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2017A 159.2 36.3 25.9 83.3 15.6 13.3
2018A 165.5 35.3 27.2 76.5 17.0 11.9
2019E 176.3 38.7 29.8 78.6 16.5 11.1
2020E 187.0 42.2 32.8 86.3 15.1 10.3

Last updated on 31/01/2019

Investment summary

Avon’s FY18 report demonstrated the success of the new business strategy, delivering growth across both divisions. Success continues to flow from the enhanced product portfolio and order progression is building visibility. The award by the US DoD of a sole source IDIQ contract for M69 mask systems worth up to $92.7m is the latest success. The strategy remains to grow the core, add selective product development and make value-enhancing acquisitions to accelerate growth. The AGM statement indicates FY19 expectations should be met.

Last updated on 01/02/2019

Industry outlook

Avon's long-standing, multi-level relationship with the US DoD is important to the group and the end market backdrop is supportive. The active dialogue for the M50 replenishment phase should extend the programme for at least another 15 years plus a focus on higher price sophisticated mask systems provide a further opportunity. Meanwhile, growth has been encouraging in Farm Services, building greater visibility into the business. We maintain our view that Avon has the market position, product portfolio and strategic ambition to further accelerate its growth through organic and inorganic means.

Last updated on 01/02/2019

Key management

David Evans, Chairman
Paul McDonald, CEO
Nick Keveth, CFO

Company address

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