Avon Technologies PLC (LSE:AVON) shares rose 7% to 1,976p after the defence equipment group upgraded its assessment of prospects on the back of a record order book and improving margins.
For the year to 30 September, revenue increased 14.1% to $313.9 million, while adjusted profit before tax climbed 37.9% to $34.9 million.
The closing order book advanced 16.7% to $262.8 million, giving management “confidence in the 2026 financial year and beyond.” Statutory profit before tax rose to $13.1 million from $2.3 million. The dividend was lifted 5.6% to 24.6 cents.
Adjusted operating margin improved to 12.8%, and the company said it is “on track” to reach its 14–16% target range in the 2026 financial year.
Return on invested capital rose to 18.6%, ahead of a 17% medium-term goal originally set for 2027, while cash conversion was 90%. Net debt, excluding lease liabilities, stood at $50.1 million, equivalent to 0.86 times EBITDA.
Chief executive Jos Sclater said: “Adjusted EPS has grown by over 100% since 2023, the balance sheet now provides a strong foundation and strategic optionality, and we’ve launched several exciting new products which will support future growth…
"We are now a stronger business with more growth opportunities than ever, underpinned by disciplined investment and relentless operational improvement.”
Guidance for the 2026 financial year points to high-single-digit revenue growth, an adjusted operating margin within 14–16%, more than 60% lower transformation costs at about $6 million, and cash conversion above 80% (before transformation costs).
Medium-term priorities include sustaining higher helmet production at Team Wendy, expanding sales coverage in North America and internationally, and selective bolt-on acquisitions to complement organic growth.
Risks remain, notably the need to maintain elevated output on US helmet programmes, potential new competition on NG IHPS and working-capital timing if US government shutdowns delay deliveries.
Even so, with a record backlog, improving operations and clearer margin targets, today’s update suggests the group has momentum heading into the new financial year.