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Avon Rubber (AVON)

Business description

Avon Rubber designs, develops and manufactures products in the protection (70% FY17 sales) and dairy (30%) sectors. Its major contracts are with national security and safety organisations such as the DoD. Sales are 75% from the US and 25% from Europe.

Stock data

Market cap.£380m
Last close1,225.00p
High / Low (52 weeks)1475.0p / 954.0p
Stock market listingLN
Forecast net cash (£m)46.2
Forecast gearing ratio (%)N/A
SectorAerospace & Defence

Price performance

Relative *(8.1)(5.7)33.4

* % 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)
2016A 142.9 29.9 20.7 70.5 17.4 12.2
2017A 159.2 36.3 25.9 83.3 14.7 12.5
2018E 160.8 35.9 26.5 74.2 16.5 10.8
2019E 166.6 38.3 28.5 75.3 16.3 10.5

Last updated on 23/09/2018

Investment summary

Avon started the year with a new growth strategy and the pre-close trading statement demonstrates the underlying growth in both divisions. Success continues to flow from the enhanced product portfolio and order progression is building visibility. Cash performance has also been solid, which underpins selective future acquisitions, including the Merrick's deal, while the disposal of AEF adds c £6m to cash. Overall, the approach is to grow the core, add selective product development and make value-enhancing acquisitions to accelerate growth.

Last updated on 28/09/2018

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 provides an 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 28/09/2018

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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