Avon Protection Share Discussion Threads

[warala] 02/6/2011 17:27

Held up well today.

[angels share] 12/5/2011 11:44

Independent - Monday, 9 May 2011

Avon Rubber mixes defence with dairy to engineer growth



".........John Cummins, an analyst at Altium Securities, dates the change in Avon's fortunes to 2000, when it secured a development contract with the US Department of Defence (DoD) to design and manufacture gas masks for the army, navy, air force and the special forces.

"This was the first time all the US armed forces came under a single contract," he said. "After a number of false starts, in 2008, Avon secured a full rate production contract with the DoD worth $112m (£68.4m) over a five-year period for 100,000 masks per annum, with an option for this to rise to a total of 300,000 masks over a 10-year period. This option was invoked in 2009, meaning that a significant proportion of the currently forecast protection and defence revenue is underpinned to at least 2017."

Not bad. But while the defence business is more eye-catching, Mr Cummins said investors should also take note of the potential for the company's dairy arm, which he suggests is "more than just a cash cow". Indeed.

"The new dairy lines brought to market provides farmers with the ability to increase milk production, and has been proved to reduce the infection rate in cows from the milking processes," he explained.

"This not only attracts a higher selling price, but also subsequent margin improvement for Avon." Besides, the company has ample scope for growth, with three quarters of the world's cows still being milked manually.

The picture is a good one.........."

[angels share] 12/5/2011 11:28

BUY recommendation and good write up in today's Shares mag....

Gas mask and dairy products manufacturer Avon Rubber (AVON) saw margins and profits advance in the six months to 31 March (4 May) despite a decline in revenues on delays to the approval of the US defence budget. We would continue to buy the Wiltshire company which still trades on an undemanding 10.3 times consensus earnings forecast for 2012, even after a 26.2% advance since our 216p 'buy' call (Plays, 24 Mar). It is encouraging to see Avon shrug off the impact of political wrangling across the pond so comprehensively. The group made £48 million in revenues in the first half compared to £56.5 million last year, but recorded a post-tax profit of £3.1 million compared to £1.7 million in 2010. Avon expects to see stronger revenues in the second half following April's agreement on US military spending.

[nellie1973] 06/5/2011 13:43

Two broker upgrades:

Avon Rubber raised to buy from hold at Westhouse, target price 320p. Started with buy recommendation at Altium, 355p target price.

Nice news on this dire day!!

[nellie1973] 04/5/2011 19:56

The full article (thanks sufi!!):Having undertaken a successful turnaround that dates back to 2006, the focus for gas masks to dairy products specialist Avon Rubber (AVON) is now very much on growth.

In the half year to 31 March pre-tax profits soared 49% to £4.4m due to higher margins, but a six-month hiatus in the approval of the US defence budget dented sales 15% to £48m. The performance has enabled Avon to reinstate the dividend with a 1p payout.

With new contracts now secured Avon expects a robust second half result as deliveries step up a gear. Long-term programs such as a ten-year sole source respiratory contract continue to provide a solid backdrop, and news is awaited on a potential order to supply filters to the US Department of Defence.

Moreover, contract delays held back filter sales in the first half but production has since increased thanks to a new filter line. Aside from demand in the US a sales and marketing push has helped drive new gas mask business in Kuwait, Saudi Arabia and France.

Dairy sales increased 16% to £15.4m as operating profits jumped 25% to £2.5m, which was driven by good demand and outsourced manufacturing. On the downside input costs have risen due to higher raw material prices.

Chief executive Peter Slabbert says 'we are pleased with the performance and for the first time are now considering acquisitions'. Arden Partners predicts 2011 pre-tax profits of £9.7m and EPS of 24p. We recommended the shares as a strong buy at 82.5p in October 2009 so the re-rating since then is pleasing. With plenty of scope for expansion Avon still rates as a buy.

[bluebelle] 04/5/2011 13:13

Absolutely. As a long term holder, the company's cash position and its cash generation capability are two of the many things I like about it. As I've said elsewhere, funny how some of the best shares have the quietest bbs !

[18bt] 04/5/2011 09:09

Cracking results if you take into account the deferral. The implication is that cash generation would have been significant.

[bluebelle] 04/5/2011 08:40

Good half yearly report.

[gargoyle2] 12/4/2011 04:58

Raised because Henderson bought Gartmore, I think, rather than a new buy. I guess a sell down might be a possibility - if so, I'll be buying some.

[nellie1973] 11/4/2011 17:50

Henderson holding-raised 5-14% thats a fair whack of the company. Good confidence vote if you ask me!

[bluebelle] 11/4/2011 12:23

jeffian - 8 Apr'11 - 13:53 - 192 of 193

Oh dear. I'm sorry to say I laughed at that !!!

Interesting to see that Henderson now hold over 14% of the equity.

[cockneyrebel] 08/4/2011 22:18

trading update a bit late - must be soon.

CR

[jeffian] 08/4/2011 13:53

Got my Avon Rubber div cheque today. Do you think it will bounce?

(sorry. couldn't resist)

[cockneyrebel] 31/3/2011 07:51

:-)

Perhaps these masks are useful re iodine in Japan? I would have thought they sup the ingestion of it - not much uses against cesium or plutonium but iodine would see it's affects reduced I would think.

CR

[jeffian] 30/3/2011 23:46

I bumped into an ex-soldier ski-ing last week. He told me a story about when he was in Iraq during that war. They had the gas masks (remember Saddam was supposed to have 'chemical weapons') but no filters. They put in the requisition but someone mis-keyed one of the reference numbers. When the sealed container turned up, they broke it open and found it was full of ......chef's hats! Apparently some of them went into battle looking like Gordon Ramsay. You've got to love the spirit of the British squaddie, eh?!

[landie1976] 30/3/2011 19:58

good point jeffian

[jeffian] 30/3/2011 16:50

There was an issue hanging over the gas mask contracts afaicr - slowing orders from US military and UK Govt not taking up option for next tranche? - maybe the outbreak of a few Middle Eastern wars has made them think again.

[nellie1973] 30/3/2011 16:11

Looking good for a further breakout past recent highs.

[landie1976] 30/3/2011 15:47

8% today? whats up?

[cockneyrebel] 30/3/2011 15:07

Testing the high ahead of their trading update - 31st March last year I think.


Tomorrow?

CR

[nellie1973] 24/3/2011 17:38

Tipped by press today

[23retired] 17/3/2011 10:49

A drop of 5 or 6% I'd understand on the back of recent events, not a drop of 12%...

...also, sadly, one of those macro-economic issues should be highlighting the critical requirement for CBRN protection for commercial/industrial/environmental/government agencies.

[jeffian] 17/3/2011 10:27

"Disappointed with the drop over the last week!"

I think you'll find that there have been one or two macro-economic issues over the past week or so which may have affected investment sentiment more than the prospects for any individual company!