Edison Investment Research - Avon Rubber PLC (AVON) Avon Rubber - More Protection enhances EPS

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Edison Investment Research

Toby Thorrington

Avon Rubber - More Protection enhances EPS

Having gained CFIUS approval on 20 December 2019, Avon has completed the $91m acquisition of 3Mâ€™s ballistic protection assets announced in August. We update our forecasts for the acquisition, consolidated from 2 January 2020. Our FY20 EPS estimate is enhanced by 5% and, allowing for the full $5m annual benefit of cost synergies, FY21e EPS increase by 20%. The resultant FY21e P/E rating of 18.1x represents a 20% premium to UK defence peers, which we feel is justified by the high returns, strong cash generation and consistent execution of the growth strategy.

03/01/2020 4 EN

Underlying

Avon Rubber PLC

Avon Rubber is a technology group focusing on respiratory protection systems and milking point solutions through its two businesses, Avon Protection and milkrite , InterPuls. Avon Protection is a provider in Chemical, Biological, Radiological and Nuclear respiratory protection systems for the world's Military, Law Enforcement and Fire markets. milkrite , InterPuls provides milking point solutions to customers across the world.

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GB0000667013 London Stock Exchange United Kingdom

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Toby Thorrington

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Avon Rubber - More Protection enhances EPS

Audio Note: Avon Protection - Capital Markets Event and Bull and Bear Case

Avon Protection - Unmasking its growth potential

Avon Protection (AVON LN) - Initiation: plenty of potential

Norcros - Sale of Johnson Tiles UK agreed

Henderson Far East Income - Repositioning to raise total returns

Freelancer - AI to drive return to growth

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