LSE:AVON

Stock Analysis Report

Executive Summary

Avon Rubber p.l.c. designs, manufactures, and sells chemical, biological, radiological, and nuclear respiratory protection systems for military, law enforcement, and fire markets worldwide.


Snowflake Analysis

High growth potential with excellent balance sheet.

Share Price & News

How has Avon Rubber's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AVON's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

2.8%

AVON

1.7%

GB Aerospace & Defense

0.2%

GB Market


1 Year Return

113.8%

AVON

36.2%

GB Aerospace & Defense

6.4%

GB Market

Return vs Industry: AVON exceeded the UK Aerospace & Defense industry which returned 36.2% over the past year.

Return vs Market: AVON exceeded the UK Market which returned 6.4% over the past year.


Shareholder returns

AVONIndustryMarket
7 Day2.8%1.7%0.2%
30 Day25.2%1.5%-1.4%
90 Day39.6%11.1%3.8%
1 Year115.9%113.8%40.9%36.2%11.9%6.4%
3 Year191.8%182.5%31.4%17.7%18.6%3.8%
5 Year287.8%268.2%33.3%6.0%34.8%4.0%

Price Volatility Vs. Market

How volatile is Avon Rubber's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Avon Rubber undervalued compared to its fair value and its price relative to the market?

59.32x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: AVON (£27.8) is trading above our estimate of fair value (£21.91)

Significantly Below Fair Value: AVON is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: AVON is poor value based on its PE Ratio (59.3x) compared to the Aerospace & Defense industry average (32x).

PE vs Market: AVON is poor value based on its PE Ratio (59.3x) compared to the UK market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: AVON is poor value based on its PEG Ratio (2.2x)


Price to Book Ratio

PB vs Industry: AVON is overvalued based on its PB Ratio (9.8x) compared to the GB Aerospace & Defense industry average (2.6x).


Next Steps

Future Growth

How is Avon Rubber forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

26.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AVON's forecast earnings growth (26.4% per year) is above the savings rate (0.5%).

Earnings vs Market: AVON's earnings (26.4% per year) are forecast to grow faster than the UK market (12.9% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: AVON's revenue (11.4% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: AVON's revenue (11.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AVON's Return on Equity is forecast to be high in 3 years time (27.6%)


Next Steps

Past Performance

How has Avon Rubber performed over the past 5 years?

5.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AVON has a large one-off loss of £16.7M impacting its September 30 2019 financial results.

Growing Profit Margin: AVON's current net profit margins (8%) are lower than last year (12%).


Past Earnings Growth Analysis

Earnings Trend: AVON's earnings have grown by 5.8% per year over the past 5 years.

Accelerating Growth: AVON's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: AVON had negative earnings growth (-27.8%) over the past year, making it difficult to compare to the Aerospace & Defense industry average (-13.2%).


Return on Equity

High ROE: AVON's Return on Equity (16.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Avon Rubber's financial position?


Financial Position Analysis

Short Term Liabilities: AVON's short term assets (£104.5M) exceed its short term liabilities (£36.6M).

Long Term Liabilities: AVON's short term assets (£104.5M) exceed its long term liabilities (£50.7M).


Debt to Equity History and Analysis

Debt Level: AVON's debt to equity ratio (0.1%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if AVON's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: AVON's debt is well covered by operating cash flow (15800%).

Interest Coverage: AVON earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: AVON has a high level of physical assets or inventory.

Debt Coverage by Assets: AVON's debt is covered by short term assets (assets are 1045x debt).


Next Steps

Dividend

What is Avon Rubber's current dividend yield, its reliability and sustainability?

0.75%

Current Dividend Yield


Dividend Yield vs Market

company0.7%marketbottom25%1.8%markettop25%5.1%industryaverage2.8%forecastin3Years1.2%

Current dividend yield vs market & industry

Notable Dividend: AVON's dividend (0.75%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.8%).

High Dividend: AVON's dividend (0.75%) is low compared to the top 25% of dividend payers in the UK market (5.1%).


Stability and Growth of Payments

Stable Dividend: AVON is not paying a notable dividend for the UK market, therefore no need to check if payments are stable.

Growing Dividend: AVON is not paying a notable dividend for the UK market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: AVON is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of AVON's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.0yrs

Average management tenure


CEO

Paul McDonald (45yo)

3yrs

Tenure

UK£772,000

Compensation

Mr. Paul McDonald has been Chief Executive at Avon Rubber p.l.c. since February 15, 2017 and serves as its Director. Mr. McDonald served as the Managing Director of Avon Dairy Solutions at Avon Rubber plc  ...


CEO Compensation Analysis

Compensation vs Market: Paul's total compensation ($USD1.00M) is about average for companies of similar size in the UK market ($USD1.19M).

Compensation vs Earnings: Paul's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Paul McDonald
CEO & Director3yrsUK£772.00k0.11% £951.5k
Nicholas Keveth
CFO & Director2.7yrsUK£461.00k0.038% £326.5k
Mike Hamner
Vice President of Operations0yrsno datano data
Mike Harral
Chief Technical Officer8.1yrsno datano data
Miles Ingrey-Counter
General Counsel & Company Secretary0yrsno data0.072% £608.8k
Gary Dunn
Vice President of Sales & Marketing0yrsno datano data
Craig Sage
Managing Director of Milkrite | Interpuls0yrsno datano data
Leon Klapwijk
President of Avon Protection0yrsno datano data
James Wilcox
President of Military0yrsno datano data
David Mack
President of Law Enforcement & Fire0yrsno datano data

3.0yrs

Average Tenure

48.5yo

Average Age

Experienced Management: AVON's management team is considered experienced (3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Paul McDonald
CEO & Director3yrsUK£772.00k0.11% £951.5k
Nicholas Keveth
CFO & Director2.7yrsUK£461.00k0.038% £326.5k
David Evans
Independent Chairman8yrsUK£18.00k0.082% £695.0k
Bruce Thompson
Independent Non-Executive Director0yrsno datano data
Pim R. Vervaat
Senior Independent Non-Executive Director0yrsUK£56.00k0.025% £208.5k
Chloe Ponsonby
Non-Executive Director3.9yrsUK£51.00k0.015% £126.5k

3.5yrs

Average Tenure

51.5yo

Average Age

Experienced Board: AVON's board of directors are considered experienced (3.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Avon Rubber p.l.c.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Avon Rubber p.l.c.
  • Ticker: AVON
  • Exchange: LSE
  • Founded: 1885
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: UK£848.373m
  • Shares outstanding: 30.52m
  • Website: https://www.avon-rubber.com

Number of Employees


Location

  • Avon Rubber p.l.c.
  • Hampton Park West
  • Semington Road
  • Melksham
  • Wiltshire
  • SN12 6NB
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AVONLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
AVNB.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
AVONlBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992

Biography

Avon Rubber p.l.c. designs, manufactures, and sells chemical, biological, radiological, and nuclear respiratory protection systems for military, law enforcement, and fire markets worldwide. It operates in two segments, Avon Protection and milkrite | InterPuls. The company offers masks and filters with portfolio of respirators, filters, powered air, and supplied air and long term pedigree for military contracting and supplying chain; escape hoods; underwater rebreathers; and thermal image camera technology and self-contained breathing apparatus, as well as accessories. It also provides milking point solutions, such as milking cluster technology products, which include liner, tubing, claw, and calf nurser products to remove milk from the animal for dairy farmers; precision air systems within the milking process to maximize the performance and efficiency of the system; control solution, a physical control system of the milking system to provide automation opportunities to minimize labor inputs; and intelligence solution, a critical part of the dairy system, which extracts data from the animal and integrates this within the farm herd management system or dairy management system, as well as farm services offerings, such as clusters, pulsators, and tags to the farm on a lease hire basis. The company was founded in 1885 and is headquartered in Melksham, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/22 20:38
End of Day Share Price2020/02/21 00:00
Earnings2019/09/30
Annual Earnings2019/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.