28th Jan 2022 12:15
(Alliance News) - Avon Protection PLC on Friday said it is confident in achieving full-year expectations after posting revenue growth in its first quarter and plans to launch a share-buyback programme.
The Wiltshire, England-based respiratory protection equipment manufacturer said organic revenue in its first quarter was ahead of revenue in the comparable quarter a year before. It, therefore, remains confident in achieving full-year expectations.
Avon noted that the supply chain issues it experienced last year are continuing. Nonetheless, these are "largely stable" now and mitigation actions continue to be taken, it said.
The company also said that customer demand continues to be "robust".
However, given the continued longer order lead times, Avon expects revenue to be weighted to the second half of the year.
The company anticipates overheads in the first half to be at a similar run rate as overheads in the second half of 2021.
It started to take actions to reduce these and the benefits of them are expected to be seen in the second half of the new financial year as well.
In its Respiratory Protection business, Avon is seeing further progress with its North Atlantic Treaty Organization framework contract. It received additional orders from its initial six customers, with Latvia becoming the seventh country to order under the framework.
Furthermore, it received an order for its MCM100 underwater rebreather from Belgium.
The company also anticipates follow-on orders under its long-term US DOD contracts during the first half of the new year.
For its Head Protection business, the delivery of the existing first-generation Integrated Head Protection System helmets continues. The company is also "well-advanced" in its preparations to submit helmets for the next generation of IHPS helmets for first article testing in the second quarter of the year.
Furthermore, it is pursuing a "strong" pipeline of opportunities in both the military and first responder markets for the F90 helmets and Team Wendy EXFIL range of helmets.
Lastly, the company developed detailed plans to complete the closure of its Armor business during its 2023 financial year.
Discussions with customers to finalise their order requirements and plan the transition to other sources of supply are continuing productively, Avon said.
Actions to reduce the cost base of the business ahead of closure have started, it noted.
The equipment manufacturer also made progress in finalising the first article test approvals for its DLA ESAPI body armour product. It expects the approvals to be finalised during the second quarter of this year.
Separately, Avon will launch a share buyback of up to GBP18.5 million. The purpose of this buyback is to reduce the share capital of the company for the benefit of shareholders, it explained.
The company plans to execute the buybacks in two tranches. The first one will start on Friday and finish no later than May 30. The second will commence "promptly" on completion of the first.
Shares in Avon Protection were up 2.5% at 1,074.00 pence each on Friday midday in London.
By Abby Amoakuh; [email protected]
Copyright 2022 Alliance News Limited. All Rights Reserved.
Related Shares:
Avon Protection