Avon Rubber - Protection is the name of the game

The benefits of the three-pronged growth strategy are reflected in Avon Rubber’s H121 performance, which delivered strong overall growth in revenues and adjusted group profitability driven by a strong initial contribution from Team Wendy. The outlook for FY21 is maintained by management, which expects to meet market consensus expectations for adjusted PBT with the anticipated second-half weighting of revenues, despite the adverse impact of FX on costs. Strong order intake and backlog underpin medium-term prospects for further growth. The FY22 P/E of 23.1x represents a c 60% premium to UK defence peers, reflecting the strong growth expectations.