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(Alliance News) - Avon Protection PLC on Friday said both underlying earnings and its order book grew in its second half, and that its Armour business is on track to be officially discontinued.
The Wiltshire, England-based personal protection equipment company said trading in the second half of the year ended September 30 was, as expected, stronger than the first.
Avon Protection said its order book grew by over 10% compared with the previous year, "with strong demand for helmets offsetting expected softness" in demand for respiratory equipment. It currently has approximately USD79 million in outstanding orders for helmets.
Avon said revenue excluding armour was significantly above that in the first half of financial 2023, while the adjusted operating profit margin remained "broadly flat".
On a covenant basis, net debt is expected to have fallen to around 2.0 times earnings before interest, tax, depreciation and amortisation by September 30, from 2.65 times by the end of the first half year.
"This improvement is the result of our successful exit from the Armour business and the improved profitability in the second half of the year," Avon said.
Avon now expects its net debt position on a convenant basis to be around USD65 million due to the timing of cash receipts from several large order shipments in September.
The company said all outstanding armour products have now been delivered to customers. Consequently, Avon expects its Armour business to be classified as discontinued for financial 2023, giving it "a more profitable and focused business and a stronger platform for future growth."
"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," commented Chief Executive Officer Jos Sclater. "In particular, we have demonstrated our ability to deliver helmets to the DOD, which is reflected by a stronger order book."
He added: "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."
Avon Protection shares were up 7.9% at 722.00 pence in London on Friday around noon.
By Emma Curzon, Alliance News reporter
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