Defence technology firm Avon Rubber (AVON) perked up 3.4% to £35.47 as it announced the award of a new contract with NATO.
The company, which specialises in ‘life critical personal protection’ including items like gas masks, has been awarded a 10-year contract by the NATO Support & Procurement Agency to supply FM50 mask systems, powered and supplied air systems, filters, spare parts and accessories.
The company’s Avon Protection division anticipates receiving the first order under this contract shortly, with initial deliveries contributing to its expected Rest of World Military revenues for the 2021 financial year.
Avon, which recently agreed the sale of its dairy products business, is the best performing stock in the FTSE 350 over the last decade according to data from SharePad, with a 2,940% advance.
STRONG 2020 PERFORMER
It has performed strongly this year as it continued to win contracts through the pandemic and the net proceeds of £160 million from the dairy division divestment should give it funds to invest further in the defence side of the business.
Commenting on today’s announcement investment bank Jefferies said: ‘In our view, this is another milestone contract win for the group.
‘As well as highlighting the strength of the product portfolio and strong momentum in the business, this contract win/subsequent orders will help underpin the group’s long-term RoW revenue guidance (and possibly more).
‘While there are no numbers in this morning’s announcement, management has outlined that it expects to receive the first order under this contract “shortly”.
‘Once these orders are received/announced, this will start to give us a feel for the potential size of the contract.’
