Avon Technologies (LON: AVON), the maker of military and law-enforcement protective equipment, said its full-year profit will beat market expectations, and its shares jumped about 17% in early trading. The update came at 7am, before the London session began.
A delayed quote at 8.15am showed the shares at 2,235p, up 327p from yesterday’s close of 1,908p after opening at 2,090p. That is above every daily close since the 1st of July, the highest of which was 1,948p on the 14th of August. The session is still running.
In a trading update for the year to the 30th of September, the board said it expects FY26 results ahead of current market expectations. Revenue growth should be about 12.5%, against 13.8% a year earlier. Adjusted operating margin, operating profit as a share of sales on the company’s adjusted basis, should be comfortably above the guided 14-16% range, from 12.8% in FY25.
The margin figure includes some beneficial one-offs, which the company did not quantify. The order book has risen significantly since the half-year results, with new European orders through NATO’s procurement agency, NSPA, at Avon Protection. At its US helmet business Team Wendy, production has stabilised at target levels, which lifted second-half margin, and it won the largest share of the Next Generation Integrated Head Protection System order.
Alongside the update, Avon launched a strategy called “Improve. Grow. Compound.” with management targets, which are not guidance:
| Metric | FY26 update | Target |
|---|---|---|
| Revenue growth | About 12.5% | Above 5% a year |
| Adjusted operating margin | Comfortably above 14-16% | 16-18% |
| EPS growth | No FY26 figure given | Above 10% a year |
| Free cash flow | Cash conversion above 85% | Over $175m in three years |
The cash target is linked to inventory turns, how often stock is sold and replaced, rising above 5x. Five-year ambitions are revenue above $600m with return on invested capital above 18%.
Jos Sclater, Avon’s Chief Executive Officer, said acquisitions form part of the plan:
Over time, we also see an opportunity to create additional shareholder value by selectively acquiring, improving and growing protection technology businesses where Avon has a genuine ownership advantage.
Jos Sclater, Avon Technologies
FY27 guidance has not been given and arrives with full-year results on the 10th of November.
