Avon Protection stocks boom as AIM-listed manufacturer lands deal with US Department of Defense despite bulletproof vest gaff
- Avon Protection won a £15 million order from the US Department of Defense for gas mask filters
- The future of his relationship with the US military has been questioned over the past year
Avon Protection shares rose more than 30 percent on Wednesday after the AIM-listed manufacturer announced a £15million deal with the US Department of Defense.
Wilshire-based Avon told investors it has received an order from the Ministry of Defense for 380,000 pairs of M61 filters, which are a component used in gas masks, with deliveries due to begin early next year.
Avon Protection shares are up 30.3 per cent to 963 pence in morning trade, down 11.4 per cent year-to-date. It remains well below its peak of around 4,000p in 2020.
In November 2021, Avon had to admit problems with his body armor
Last November, the company’s shares lost half their value after it admitted that bulletproof vests it provided for US soldiers were not working.
It was the latest incident to jeopardize Avon’s status as a key supplier to the American military, after the group’s body armor failed a similar US Army test in December 2020.
Shares came under further pressure in May when Avon posted a first-half loss on supply chain issues and a slowdown in orders.
After the outbreak of the Ukraine war, however, the manufacturer forecast higher demand for personal protective equipment in NATO member states in the medium and long term.
It was also announced in May that boss Paul McDonald would step down at the end of September, and the company now said the search for his successor was making “good progress”.
In an update today, Avon told investors that trading had improved in the second half of 2022 “due to a slight improvement in mix” in its respiratory portfolio and the start of body armor shipments.
Avon added, ‘Additionally, cost reduction activities continue to progress as expected. Overall performance for the year without armor is expected to be at least in line with market expectations.’