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


Avon Rubber p.l.c. – Annual report – 30 September 2018

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 US and UK 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 £9.7m (2017: £8.3m) further details of which are contained in the Strategic Report on page 32.

Through Artis, the Group’s research and development arm, the Group is recognised as a world leader in understanding the composition and use of polymer products.

Strategic Report (extract 1)

Chief Executive Officer’s Review (extract)

Selective Product Development

Continued investment to expand our product range

We have made a substantial 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 the highest commercial returns on our investment are delivered.

The development expenditure in the year has predominantly focused on Avon Protection, with significant investment in the UK GSR, MCM100 and next generation hood programmes. We also invested in obtaining NIOSH safety approval for our supplied and powered air range and preparing our upgraded Magnum SCBA for NFPA verification. Development expenditure for milkrite | InterPuls included the upgraded Milk Meter equipment and subsequent ICAR approval together with the PCI heavy duty equipment for North America to meet the needs of our larger industrial farm customers.

In 2018 we invested a total of £9.7m, representing 5.9% of revenue, in research and development. Over the medium-term we expect to maintain the current level of funding for product development. This reflects our confidence in our ability to innovate to meet the future technical needs of our customers thereby generating profitable revenue growth.

Building on our long-term partnership with the DOD

We have continued to work with the DOD on a number of potentially significant new platform programmes including the M69 aircrew mask, the M53A1 mask and powered air system and a follow on M50 mask system contract.

We currently expect to enter into multi-year contracts with the DOD for the M69 aircrew mask and the M53A1 mask and powered air system in the new financial year with production commencing in the second half of the year. We are also in discussions with the DOD to put in place a follow on contract for the M50 mask system following the conclusion of the initial 10 year contract in July.

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 £9.7m (2017: £8.3m) as shown below. Total research and development as a percentage of revenue was 5.9% (2017: 5.2%).


In Avon Protection, the most significant investments have been in the production preparation for the General Service Respirator for the UK MOD and development of the MCM100 and the next generation hood programmes. We have also invested in obtaining approval for Magnum SCBA and the supplied and powered air range, with the NFPA and NIOSH respectively. In milkrite | InterPuls, investment expenditure has been focussed on the heavy duty PCI equipment range and an upgrade to our Milk Meter equipment.

The reduced charges in the year for amortisation and impairments reflects the non-recurrence of the one-off impacts in 2017 of the termination of the EEBD programme.