It already ships respirators to many other countries and is said to have supplied our own Army with every gas mask used since the First World War.Avon’s shares are now 206p, capitalising the company at £57.3m, against my 194.5p buying price They have been as low as 110p since I climbed aboard. The stockbroker Collins Stewart said at the time: “Avon is a large automotive components maker with a small gas mask activity. Over three to five years it will become a large gas mask business with a small automotive activity, and that will not be because the automotive business is getting any smaller.”Well, two years down the road the Collins Stewart forecast remains on target. But any profits from the US gas mask venture are unlikely to bounce Avon’s way for some time: indeed, there is little chance of any materialising before 2006.

The group has, in preparation for anticipated US demand, established a gas mask factory in Michigan, and it has been selected as “prime contractor” for a US military order for up to three million gas masks over a period of up to 10 years.Whether the order will be spread equally over the 10 years remains to be seen. Avon could find itself supplying the equipment over a much shorter period, which would have an explosive impact on its profits. It was, however, its technical products division – and its involvement in gas masks – which attracted me There is no doubt it is a well-run company. But no matter how excellent the management, its components side is a hostage to the volatile fortunes of the car industry. Not so most of its technical products, especially those gas masks.It was a possible deal with the US Defence Department that alerted me to the group’s potential. I should have waited until a signalled US order was much nearer signature.

Still the shares, although at one time slipping into the red, are showing a modest profit and the company, on the trading front, has performed moderately well in a difficult environment.Once famed as a tyre maker, Avon is now largely known for supplying automotive components. Hold on tight, folks.s.o’grady independent.co.uk. It is two years since the no pain, no gain portfolio recruited Avon Rubber. Although the shares have yet to justify my faith, I remain hopeful they will eventually produce the sort of display achieved by my high flyers, such as the cider maker Merrydown. Well, inflation, as any schoolboy knows, produces winners and losers capriciously, and in the next round, if that is indeed what we are in for, much depends on the housing market.I suspect that inflation won’t get so bad that it wipes out the value of mortgage debts in the way it did years ago, and I guess that interest rates will have to rise rather more than some first-time borrowers may have thought was at all likely A crunch, in other words, with a redistribution of wealth Maybe there’ll be protests about that. Indeed for a time I was worried about what would happen to the few index-linked certificates I still hold if we actually had an official declaration of UK price deflation in the relevant period: would National Savings return less than I put in?Now it would seem higher inflation is about to descend on us, just when the pundits were exploring the consequences of global deflation.