London, UK, 21 January 2022

Avon Protection (AVON): Refocused Protection set to resume growth

Avon Protection should be well positioned to recover strongly following the value destruction caused by the relatively small Armor activity, which now faces a managed closure over the next two years. Future growth rates are diminished by the exit but remain healthy in the further focused core of Respiratory and Head Protection. Management needs to restore investor confidence as it continues with its growth strategy, in order to regain the historical premium rating to its UK defence peers. In this note, we reset our forecasts and valuation to reflect the revised shape of the business.

The FY23e P/E of 12.6x represents a c 13% discount to its UK aerospace and defence peer group. We feel that as the Armor issues should now recede, this is undeserved given exposure to the US defence market, strong core EBITDA margins, cash flow and growth expectations as the company addresses growing global chemical, biological, radiological and nuclear (CBRN) and other threats. Our reset capped DCF valuation returns a fair value of £16.75 or $22.78 per share. 

to view the full report or to sign up to receive research as it is published.

All reports published by Edison are available to download free of charge from its website

About Edison: Edison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By focusing on the volume and quality of investors reached - across institutions, family offices, wealth managers and retail investors - Edison can create and gauge intent to purchase, even in the darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings.

Having been the first in-market 17 years ago, Edison now has more than 100 analysts covering every economic sector. Headquartered in London, Edison also has offices in New York, Frankfurt, Amsterdam and Tel Aviv and a presence in Athens, Johannesburg and Sydney.

Edison is authorised and regulated by the .

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

For more information, please contact Edison:

Andy Chambers +44 (0)20 3681 2525

Learn more at and connect with Edison on: 

LinkedIn       

Twitter          

YouTube