Avon Technologies sees significant opportunities ahead as sales jump

Avon Technologies PLC on Tuesday said it is confident the "best is yet to come", as it reported sharp increases in full-year profit and margin.

The Wiltshire, England-based military and law enforcement protection equipment manufacturer said pretax profit more than trebled to USD42.0 million in the financial year ended September 30 from USD13.1 million the year prior.

Adjusted operating profit increased 51% to USD60.7 million from USD40.3 million, with operating margin growing strongly to 17.2% from 12.8%.

"The improvement reflects the benefits of the STAR transformation programme, stronger operational execution, productivity gains and operating leverage across both businesses. The improvement also includes IT savings and the effect of some beneficial one-offs including US tariff refunds," Avon explained.

Avon launched STAR, strengthen, transform, advance, revolutionise, a multi-year operational transformation strategy in 2023.

The firm said financial 2026 marks the "successful completion" of the programme, "having achieved all our 2027 targets a year early."

Revenue increased 13% to USD353.7 million from USD313.9 million a year ago, with orders received up 0.6% to USD353.6 million from USD351.5 million.

Sales growth was driven by strong demand across both business units, including record filter volumes in Avon Protection and higher production rates in Team Wendy.

Basic earnings per share ballooned to 108.4 US cents from 34.9 cents.

Free cash flow improved to USD30.9 million from USD12.6 million, helping lower net debt to USD50.3 million from USD68.0 million.

The annual dividend was boosted 8.9% to 26.8 cents per share from 24.6 cents, including a final payout of 18.7 cents, up from 17.0 cents a year ago.

Return on invested capital increased to 27.6% from 18.6% a year ago, reflecting higher profitability and efficient utilisation of assets.

Avon said it has exceeded all medium-term revenue, margin, return on invested capital, cash and leverage targets one year ahead of plan.

Chief Executive Jos Sclater said: "Our new Improve. Grow. Compound. strategy sets out the next phase of our journey. We see significant opportunities ahead to build on our market positions, expand into adjacent protection markets and create long-term value. With a clear strategy, a talented team and a strong foundation in place, I am confident that Avon's best is yet to come."

Shares in the company were down 3.8% at 2,310.00 pence each early Tuesday afternoon in London.

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