(Alliance News) - Avon Protection PLC on Friday said it is initiating a review of its body armor business because of "significant" product approval delays for contracts that will impact revenue for the 2022 financial year.
Shares were down 44% at 1,065.00 pence on Friday in London around midday.
The Wiltshire, England-based manufacturer of respiratory protection equipment said that the product approval timetable for its contracts with the US Defense Logistics Agency and the US Army are "significantly" delayed, due to "a failure" in first article testing.
Avon Protection also encountered delays with its DLA 'enhanced small arms protective inserts' body armour plates. Approvals for this product is now expected in the second quarter of financial 2022.
Due to these changes, the company expects the financial contribution of the body armour business for financial 2022, ending September 20, 2022, to be "significantly reduced" and initiated a review of the business.
The revenue for the arm was previously expected to be around USD40 million.
Avon Protection said that it will announce its results for financial 2021 to be delayed, so a review of the assets related to the body amror business can be carried out first, as well as additional audit work for the post balance sheet.
The new announcement date is expected to be in early December.
Revenue of the company's Helmet and Armor branch was GBP40.8 million for the 2020 financial year, ended September 30, 2020.
Avon Protection still expects underlying trading results for 2021 to be in line with guidance.
By Abby Amoakuh; abbyamoakuh@alliancenews.com
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Avon Protection (AVON)