A boost to its order book and a strategic move to more profitable product lines means defence manufacturer Avon Protection faces a brighter future, its directors have told shareholders.
The Melksham-based group, which specialises in protective gear, masks and breathing equipment for the military and first-responder markets, has been recovering from a tough period during which its shares lost around 70% of their value as it struggled to overcome damaging delays in military orders from the US.
But in an update to the London Stock Exchange for the financial year ended 30 September it said trading in the second half had been stronger than in the first, with order book growth and higher underlying earnings.
The order book was 10% stronger at year-end compared to the prior year, with strong demand for the group’s helmets offsetting expected softness in demand for its respiratory products.
During the year it had outstanding orders for its Next Generation Integrated Head Protection System (NG IHPS), pictured, helmets worth $59m (£49m) and had also recently received a further delivery order valued at more than $7m for its Advanced Combat Helmet GEN II (ACH GEN II), taking total outstanding orders for this helmet to $20m-plus.
The group said, as expected, second-half revenue – excluding sales of its armour products – was significantly above the first half, driven by the successful ramp-up of the NG IHPS programme, encouraging sales of the new EPIC range of helmets and shipment of a previously announced large mask order.
It also said it had seen some early benefits from its initiatives to strengthen and transform the business within its wider strategy, known as START, to offset the mix effect of strong growth in its lower margin head protection business.
It added that work so far on STAR had confirmed that there was an “excellent opportunity” to grow the top line, improve margins and deliver strong cash generation and attractive returns on capital.
During the period the group delivered its final armour products, having decided to exit the market and now said it had “a more profitable and focused business and a stronger platform for future growth”.
Avon Protection CEO Jos Sclater said: “We are now seeing more reliable financial performance as a result of our actions to strengthen the business by increasing accountability and improving operations and programme management.
“In particular, we have demonstrated our ability to deliver helmets to the US Department of Defense, which is reflected by a stronger order book.
“Our focus is now turning to our multi-year plan to improve margins through the transform pillar of our STAR strategy.
“I am delighted to see the Avon team rising to the challenge of realising our full potential and remain excited by the significant opportunity to expand cash-backed margins, accelerate growth and improve return on capital.”
The group, which changed its name in 2021 from Avon Rubber, employs more than 1,000 people in seven locations.
