Avon Protection - Unmasking its growth potential

Avon Protection's capital markets day highlighted its continued focus on medium-term margin expansion (targeting operating margin of 14-16%), concentrating on its core business of respirators and head protection. The unwinding of the armour business, alongside the consolidation of Team Wendy (acquired in H220) should enable Avon to benefit from rising global defence spending. Its strong relationship with the US DoD, and organic growth opportunities with recurring revenue from necessary product replacements, should bolster its medium-term target for ROIC to exceed 17%, which would surpass the average of UK defence peers.

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