Avon Rubber


£870.2m market cap

2805p last close

Avon Rubber designs, develops and manufactures personal protection products for Military and First Responder markets. Its main customers are national security agencies such as the US DOD and c 90% of sales are from the US.

Investment summary

Avon is delivering on its growth strategy focused on organically growing its core, supported by selective product development and value-enhancing M&A. Avon Protection is now the sole focus. The enhancing purchases in the US of the Helmets & Armor division in Q220 and Team Wendy helmet systems business on 2 November 2020 extended the product portfolio and deepened customer engagement. FY20 trading was strong in most areas, with clear momentum in H220 for the ongoing activities. However, the deferral of volumes from new body armor contracts to FY22 from FY21 lowered our FY21 sales estimates by $50m, and our EPS expectation by 19%.

Y/E Sep
Revenue (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2019A 162.0 36.2 28.3 85.6 45.2 134.2
2020A 213.6 49.0 36.0 97.6 39.7 N/A
2021E 284.9 71.5 50.2 132.7 29.2 14.4
2022E 362.0 93.6 69.4 183.6 21.1 15.8
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 focus on higher-price sophisticated mask systems is proving successful, with M50 mask system replenishment and the addition of helmets and body armour provides further opportunities. We believe that Avon has the market position, product portfolio and strategic ambition to continue its growth through organic and inorganic means.

Last updated on 26/02/2021
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Share price graph
Balance sheet
Forecast net cash (US$m) 55.4
Forecast gearing ratio (%) N/A
Price performance
Actual (10.4) (34.2) 3.9
Relative* (9.0) (36.2) 10.2
52-week high/low 4625.0p/2050.0p
*% relative to local index
Key management
David Evans Chairman
Paul McDonald CEO
Nick Keveth CFO

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