Avon Rubber - Further backlog development

The latest body armour contract for the US Defense Logistics Agency is for up to $333m, to be delivered over 3.5 years for a legacy product. Avon had identified it as an incremental value-creating opportunity which, when won, would trigger the contingency consideration of up to $25m for the Helmets and Armor business acquired at the start of 2020. We have increased our FY21 EPS estimates by 13% following the award of the first delivery contract. Avon operates in defence and dairy markets that should be relatively resilient as they are deemed essential in the US, UK and Italy.