Avon Technologies raises full-year guidance

(Sharecast News) - Avon Technologies raised its full-year guidance on Wednesday after reporting continued strong trading momentum in the second quarter, underpinned by robust demand across its defence and protective equipment businesses. The London-listed company said it now expected revenue growth in excess of 10% for the 2025 financial year, ahead of prior mid-single-digit expectations, and an adjusted operating margin above 12%, up from earlier guidance of around 11.5%.

It said the upgrade came after a solid first-half performance to 31 March, driven by the ramp-up of ACH Gen II helmet deliveries at Team Wendy to the US Department of Defense and strong sales of FM54 respirators and underwater rebreathers at Avon Protection.

The company also secured two new NATO-backed orders for FM50 and C50 respirators to support the Armed Forces of Ukraine, with deliveries set for 2025 and some extending into early in the 2026 financial year.

In addition, Avon Protection signed a new 12-year framework contract with two European navies for its MCM100 Multi-Role Rebreather systems.

While specific delivery volumes and timing were yet to be finalised, the agreement was expected to support long-term growth across accessories, training, and maintenance services.

Operating profit margins at Avon Protection were meanwhile benefiting from favourable product mix and ongoing efficiency improvements.

While costs related to the production ramp-up and factory closure at Team Wendy would weigh on first-half profitability, the group remains confident that margins will strengthen as the year progresses.

Management noted that scaling production for the US Department of Defense at Team Wendy continued to present both a risk and an opportunity, but efforts remained focused on mitigating challenges and unlocking further margin gains into the 2026 financial year.

All other guidance for 2025 remained unchanged.

"We are proud of the contribution that Avon continues to provide to the security of NATO nations," said chief executive officer Jos Sclater.

"The additional orders for provision of respiratory protection to Ukrainian war fighters and rebreathers for military divers allows both users to operate with confidence, knowing they are protected against increasingly prevalent threats in the harshest and most demanding environments."

Sclater said the company was continuing to deliver in accordance with its STAR strategy.

"Our growing order book, progress closing our California facility and the culture, capability change and pace we are seeing as we implement continuous improvement across the group all give us confidence for the medium term and beyond."

Avon said it would report its half-year results on 21 May.

At 0847 GMT, shares in Avon Technologies were up 6.4% at 1,457.59p.

Reporting by Josh White for Sharecast.com.