UK directors’ report, activities in the field of research and development

Avon Rubber p.l.c. – Annual report – 30 September 2019

Industry: manufacturing

Directors’ Report (extract)
Research and development
The Group continues to utilise its technical and materials expertise to further advance its products and remain at the forefront of technology in the fields of respiratory protection, dairy milking technology and polymer engineering. The Group maintains its links to key universities in the U.S. and U.K. and continues to work with new and existing customers and suppliers to develop its knowledge and product range. Total Group expenditure on research and development in the year was £8.2m (2018: £9.7m) further details of which are contained in the Strategic Report on page 43.

Strategic Report (extract 1)
Chief Executive Officer’s Review (extract)
Selective product development
Continued investment to maintain our competitive advantage and to expand our product range

We have continued our investment this year in enhancing the technical capability of our existing portfolio and developing new products that will deliver future growth for the business. The majority of our development pipeline is designed in partnership with our customers to ensure that their performance requirements are met whilst ensuring we deliver the highest commercial returns on our investment.

The development expenditure in the year has predominantly focused on Avon Protection, with significant investment in the U.K. GSR, MCM100 and next generation hood programmes. Development expenditure for milkrite | InterPuls included the compact milk meter to address the market for smaller milk producing animals.

In 2019, we invested a total of £8.2m (2018 £9.7m), representing 4.6% of revenue (2018: 5.9%), in research and development. Over the medium-term we expect to maintain the level of funding at around 5% of revenue for product development.

This reflects our confidence in our ability to innovate to meet the future technical needs of our customers thereby generating revenue and profit growth.

Strategic Report (extract 2)
Financial Review (extract)
Research and development expenditure
We continue to invest for the future and our total investment in research and development (capitalised and expensed) amounted to £8.2m (2018: £9.7m) as shown below. Total research and development as a percentage of revenue was 4.6% (2018: 5.9%).

In Avon Protection, the most significant investments have been in the production preparation for the GSR for the U.K. MOD, the continued development of the MCM100 and the next generation hood programmes. In milkrite | InterPuls, investment expenditure has been focused on the compact milk meter for sheep and goats and updating the software in our intelligence Farm Controller.