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Avon Rubber wins further US defence contract

The protective equipment specialist is gathering momentum this year
August 28, 2020

Avon Rubber (AVON) has been awarded a $127m (£96m) dual source contract by the US Department of Defence (DoD) to supply replacement M61 filters for the M50 mask system. Up against the Canadian Commercial Corporation, the group will compete to secure each order of the contract for five years, as well as two potential one-year extension periods. The first order is expected shortly, and delivery would commence in the year to 30 September 2021.

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The DoD is Avon Rubber’s largest military customer and the group has been a long-standing supplier of the M50 respiratory mask, spares and accessories. Its exclusive 10-year contract came to an end in 2018, but a five-year sustainment contract was agreed back in June with an initial value of $50m. The group’s newer M69 and M53A1 masks are more likely to be the drivers of earnings growth moving forward on the back of $340m-worth of sole source contracts with the DoD. But there is still the opportunity to harness the DoD’s installed base of over 2m M50 mask systems for a steady stream of revenue.

This latest news follows the announcement of a 10-year contract with the NATO Support and Procurement Agency (NSPA) to supply its FM50 mask systems, powered and supplied air systems and ancillary parts. While Avon Rubber did not disclose how much the contract is worth, it will widen the group’s customer base and is expected to boost earnings for the ‘rest of world’ military segment from next year.