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

Avon Rubber p.l.c. – Annual report – 30 September 2021

Industry: manufacturing

Directors’ Report (extract)

Research and development

The Group continues to utilise its technical and materials expertise to remain at the forefront of innovative technology and produce specialist products and services to maximise the performance and capabilities of its customers. 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 $19.1 million (2020: $11.8 million), further details of which are contained in the Strategic Report on page 46.

Strategic Report (extract 1)

Chief Executive Officer’s Review (extract)

Investing for growth

We continue to focus on maintaining our reputation for technological excellence and innovation across both respiratory and head protection product lines. The strategic objective of our product development programme is to both increase the capability of the current platforms we provide and also to move up the value chain by providing more advanced systems for our specialist user groups. We continue to ensure our development pipeline is designed in partnership with our customers to ensure that their exacting performance requirements are met, whilst ensuring we have a committed and commercial route to market to maximise our return on investment.

We have continued this focus on selective new product development in the year, with $13.2 million (2020: $10.1 million) of investment in new product development projects in respiratory and head protection. The increase in investment over the prior year primarily reflects the Group’s growth with additional development resources and capability across the respiratory and head protection product portfolio being supplemented with the addition of Team Wendy.

In the respiratory portfolio, we have made notable investments over the year in;

  • enhancing the ST54 tactical self-contained breathing apparatus;
  • FM61 filter development for the NATO framework contract;
  • developing a range of CBRN boots and gloves; and
  • enhancements to the MCM100 underwater rebreather in association with the ongoing U.S. Navy tender process.

For the head protection portfolio, development expenditure has focused on the next-generation IHPS programme and the F90 helmet launch.

In addition to the helmet in-sourcing, Team Wendy has focused on developing an additional small sized variant of its EXFIL ballistic helmet in response to a customer specific requirement as well as developing the next-generation IHPS liner pad system, supporting development of the F90 helmet and contributing to a U.S. DOD funded research project exploring innovative helmet liner solutions to reduce traumatic brain injury.

Over the long-term, the strategy of our selective product development programme is focused on looking to the future of ever more sophisticated technical and operational requirements of serving military and first responder personnel through the development of seamlessly integrated respiratory and head protection systems with data and communications technology.

Strategic Report (extract 2)

Financial Review (extract)

Research and development expenditure

In line with our strategy and to maintain our leadership position in technological excellence we continue to invest in the next generation of products and our total investment in research and development (capitalised and expensed) amounted to $19.1 million (2020: $11.8 million) of which $7.8 million (2020: $5.5 million) relates to our respiratory portfolio, $5.4 million (2020: $4.6 million) to the development of our helmet portfolio and $5.9 million (2020: $1.7 million) to the armor portfolio which has subsequently been impaired. Total research and development as a percentage of revenue was 7.7% (2020: 5.5%).

The increase in investment over the prior year primarily reflects the Group’s growth with additional development resources and capability across the respiratory and ballistic product portfolio being supplemented with the addition of Team Wendy.

Over the year we have made notable investment in enhancing the Supplied Air ST54 tactical self-contained breathing apparatus, the FM61 filter development for the NATO framework contract and developing a range of CBRN boots and gloves. There has also been a focus on enhancements to the MCM100 underwater rebreather in association with the ongoing U.S. Navy tender process.

Development expenditure for the ballistic protection portfolio has focused on the next-generation IHPS programme, the F90 helmet launch and $5.9 million (2020: $1.7 million) in respect of body armor first article testing.

Team Wendy has focused on developing a small size variant of its EXFIL ballistic helmet in response to a customer specific requirement as well as developing the next-generation IHPS liner pad system, supporting development of the F90 helmet and contributing to a U.S. DOD funded research project exploring innovative helmet liner solutions to reduce traumatic brain injury.