Management continues to successfully execute the three pronged strategy of organically growing core activities, enhanced by a focus on selective new product development and augmented by value-creating M&A. Avon Protection and milkrite | InterPuls both delivered strong organic sales growth of 10.0% and 8.5% respectively, albeit against a subdued prior year comparison. At Avon Protection both the Military and ongoing First Responders lines of business delivered strong organic revenue growth, which was boosted by the acquisition of Helmets & Armor from the start of Q220. All lines of the dairy business in all geographies drove the improved performance at milkrite | InterPuls. There was a £94.1m cash outflow that left net debt at £45.8m (excluding lease liabilities of £21.1m), £90.7m of which related to the acquisition.The interim dividend was once again increased by 30% to 9.02p per share, reflecting management confidence in prospects.

H120 order backlog at Avon Protection of £110.6m was almost double the position a year earlier as Military continued to deliver its existing strong backlog and Helmets & Armor added £64.8m, which should support maintenance of the quarterly sales rate it delivered in Q220 through the second half of the year. Recent contract awards should kick in from FY21, with the anticipated $5m of cost synergies progressively improving margins. Favourable dairy market conditions also supported a positive book to bill performance at milkrite | InterPuls, with an opening H220 backlog of £4.9m (H119:£3.7m). 

Avon has maintained its rating in the recent market turmoil, reflecting the robust financial performance augmented by the acquisition. We continue to feel that the group is well positioned strategically to weather the pandemic as defence and dairy markets appear resilient. The FY21 P/E multiple of 23.0x reflects the strong growth being delivered.