Avon Rubber (AVON) has announced a contract worth a potential $246m (£186m) with the US Department of Defense. The framework deal was widely expected – we flagged it in our recent buy tip on Avon – and will see the group provide its M53A1 mask and powered air system.
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The framework lasts for an initial term of five years, with the potential for two one-year extensions. It marks the latest step oil the group’s move into higher-margin, more technologically advanced products. The first order under the framework is expected imminently, as is a follow-on contract for the group’s M50 masks.
