This morning, Avon Rubber (LON:AVON) announced completion of the disposal of Avon Engineered Fabrications (AEF) for $9.25m. The company announced in its FY17 annual report that it was considering the strategic options for the business. We estimate that this deal should add c £6m to cash at current exchange rates. Overall, the company’s threefold growth strategy remains in place and we are encouraged to see the actions management is taking.
The AEF business, based in Mississippi, US, delivers world-class coated fabrics to a broad range of end-markets, including hovercraft skirts and liquid storage tanks. Reported in the Avon Protection division, the FY17 revenue contribution was £4m (FY16: £4.8m). The company has stated that the group’s acquisition strategy would result, in the medium term, in AEF losing its US small business regime benefits. Hence, although AEF had a strong Q417 and a healthy order book, the FY17 annual report mentioned that the group was “considering the strategic options for this business”.
To read the entire report Please click on the pdf File Below: