Avon Protection reports strong Q1 on steady demand for military helmets and rebreathers
( ) , a technology company specialising in respiratory protection equipment for military, law enforcement, and fire personnel, issued a trading update for Q1 2024 ahead of its Annual General Meeting today.
Avon Protection reported 36% higher order intake in Q1, reflecting strong demand for helmets and rebreathers, following a recently announced contract from the German Navy. This was partially offset by a small decline in respirator orders, with the overall order book 21% higher year-on-year.
Revenue growth was 27% from Q1 2023, in line with management expectations, reflecting continued delivery of NG IHPS helmets to the US Department of Defense and robust demand for pads and commercial helmets. Cash conversion was strong, reflecting the unwind of elevated FY23 year-end receivables balance, following a high volume of deliveries in Q4 2023.
Avon will report its half year results for the 6 months to March 31, 2024 on May 21, 2024.
Jos Sclater, CEO, commented on the results: "After a year of strengthening the business, we are now focused on our objectives of creating a competitive advantage through superior execution, growing faster than our markets by delivering new and improved products to our customers, and increasing margins through our transformation programme. While there remain a number of opportunities and risks for us to navigate in the year ahead, I am pleased to see the results start to reflect the strategic and operational progress we are making. We remain focused on the actions required to deliver our medium-term objectives."
View from Vox
Strong results from Avon Protection with robust revenue growth and cash conversion on rising global demand for advanced military helmets. 27% revenue growth in Q1 was in line with management expectations, supporting full-year guidance of high single-digit revenue growth and continued progression in adjusted operating margin in H2. Further helping future sales volumes, the company's new ACH GEN II helmet recently finished qualification and is expected to ramp up production ahead of delivers in H2.
Avon's increased focus on operational improvement has delivered expected scrap reduction benefits, with unspecified "recent actions taken in support of functional excellence" expected to yield further cost savings in H2 2024 in line with management expectations. The group is actively streamlining its operations, with plans to close its Irvine, California facility by summer 2025 and consolidate California production into its Head Protection sites from FY26, expected to result in further operational efficiency and margin improvement in the medium term.
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