Defence companies have been a relatively safe haven during the Covid-19 crisis. While few stocks were left unscathed by the ‘Corona-crunch’, companies in the defence sector with more limited commercial exposure have largely outperformed the FTSE 350. Protective equipment specialist Avon Rubber (AVON) has been particularly impressive – its shares are up around 60 per cent so far this year, compared to a 21 per cent decline for the wider index.
That’s not to say that the good times will continue. There are threats on the horizon, not least over what will happen to defence spending moving forward. Post-pandemic budget pressures and the upcoming US election could motivate cuts to spending. But before looking ahead, it’s worth catching up with some recent results to see how defence companies have weathered the impact of Covid-19 thus far.