Avon Protection reports improved margins in second half

Melksham, UK – Avon Protection plc has closed its financial year (ended 30 Sept) on a strong note with orders showing growth of 10% year-on-year.

Reflecting “good strategic progress”, the UK protection gear supplier also expects a stronger second half and higher underlying earnings, it added in a trading update.

In particular, the Melksham group is seeing strong demand for helmets, offsetting expected softness in respiratory equipment demand.

“We now have $59 million (€56 million) of outstanding orders for next generation integrated head protection system (NG IHPS) helmets,” said the 13 Oct update.

Furthermore, the group has recently won a delivery order worth over $7 million for its Gen II combat helmet, bringing total outstanding orders for the product to over $20 million.

Overall, Avon said sales, excluding its discontinued armours unit, had improved significantly since the first half.

The uptick, is said, was mainly due to the ramp-up of its NG IHPS programme, as well as the shipment of a previously announced, large respiratory masks order.

However, adjusted operating profit margin for the final six months of the year remained “broadly flat” compared to the first half, Avon reported.

The company also reduced its net debt to two times earnings (EBITDA), compared to 2.6 times earnings at the end of the first half.

The improvement is debt-level was due mainly to the exit from the armour business, according to the trading update.

Meanwhile, Avon is delivering a “more reliable financial performance” as a result of actions to improve operations and programme management, said CEO Jos Sclater.

Avon has previously announced plans to introduce a new operating model with the creation of two business units: respiratory protection and head protection.

In its trading update, Avon said the restructuring was now complete with both business units “fully resourced and internal performance management and reporting structures in place.”