Unstable global outlook triggered by Ukraine conflict lifts demand for Avon Protection’s products

May 30, 2022

Defence manufacturing group Avon Protection believes the war in Ukraine and the increasingly volatile international political situation means the need for its equipment has never been greater.

The Melksham-based group, which specialises in protective gear, masks and breathing equipment, pictured, for the military and first-responder markets, said a “very strong macro demand environment” meant it could look ahead with confidence. 

It is looking to bounce back from a tough year or so during which its shares lost around 70% of their value as it struggled to overcome damaging delays in military orders from the US. 

The group, which changed its name last year from Avon Rubber, is also to begin the hunt for a new chief executive following Paul McDonald’s decision to step down at from the role after five years the end of this financial year.

Avon’s interim results for the half-year to 2 April showed an 80% increase in pre-tax profits to $15.5m on revenues up just 1.1% at $119.4m.

Mr McDonald said the period had been one of challenge and opportunity for the Group.

“While we have experienced some specific issues impacting profitability, they have been identified. We are working proactively to address them,” he said.

The challenges included problems in the US – its largest market – including order delays, which compounded global supply chain headaches, while the opportunities were linked to Russia’s invasion of Ukraine, which has sparked increased interest in the group’s products.

Mr McDonald said: “The requirement for our world-leading, high-tech products has never been stronger. Our global customers are adjusting to the structurally higher threat environment and, against this backdrop, we remain confident in a return to growth.” 

Looking ahead, he added that the group’s $111m order book – a 15% improvement over the period – provided good visibility into the second half, although inflation and supply chain issues would continue to put pressure on margins.

However, beyond the current financial year he said the group would benefit from a “fundamental shift in the European threat environment requiring higher military spending”. This rise in demand gave Avon a “significant opportunity”, he said, adding: “We have confidence in delivering growth into the medium and long term”.

During the half year, the group submitted its next-generation Integrated Head Protection System (IHPS NG) helmet for first article testing in March, while it secured a contract for its second-generation Advanced Combat Helmet (ACH GEN II) contract from the US Department of Defence.

Avon Protection chair Bruce Thompson said Mr McDonald had been instrumental in the transformation of Avon Protection, employs more than 1,000 people in seven locations, into a world leader in respiratory and head protection technology.

“I am grateful for his dedication and commitment during his tenure,” he added.

“A search will be initiated to identify a successor with the skill set to manage the complex challenges and opportunities ahead and deliver value for all stakeholders.”

Mr McDonald has spent a total of 19 years with the group.



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