Avon Technologies, th maker of respiratory protection and helmet systems for military and law enforcement, has upgraded its full-year earnings outlook and set ambitious five-year growth targets, sending its shares up 11% to 2,125p in early trading.
The group now expects revenue growth of approximately 12.5% for the year ended 30 September 2026, with adjusted operating margins comfortably above its guided 14-16% range, boosted by some one-off benefits in the year.
Return on invested capital (ROIC) is expected to come in significantly above its greater-than-17% guidance, while year-end net debt is forecast at approximately $34 million, representing cash conversion above 85% and leverage below 0.5x.
The upgrade was driven by strong momentum in both divisions: Avon Protection has seen healthy demand through the NATO Support and Procurement Agency (NSPA) programme.
Team Wendy, its helmet business, secured the largest share of the recent next-generation Integrated Head Protection System (NG IHPS) order and renewed its Australian Defence Force contract.
Alongside the trading update, Avon set out the next phase of its strategy under the banner "Improve. Grow. Compound.".
This is targeting revenue of over $600 million within five years, annual revenue growth exceeding 5%, adjusted operating margins of 16-18%, and annual earnings per share growth of more than 10%.
The group also forecast free cash flow of more than $175 million over the next three years, supported by inventory turns rising above 5x.
Chief executive Jos Sclater said: "Avon Protection and Team Wendy now provide a strong platform for sustainable growth and increasing cash generation."
Broker Peel Hunt repeated its 'buy' recommendation and 2,250p price target for the shares.
