Avon Technologies PLC (LSE:AVON) shares fell over 7% to their lowest in over a year after strong Ukraine-related demand in its Protection division was partly offset by weaker orders at helmet maker Team Wendy because of delays to US government funding.
Group orders declined 32% year-on-year, largely because of disruption at the US Department of Homeland Security following recent government shutdowns, hitting orders for helmets in particular.
The FTSE 250 defence equipment group reported sharply higher first-half profits and said it had delivered its medium-term financial targets 18 months ahead of schedule.
The maker of respiratory protection systems and helmets for the military and emergency services sectors posted adjusted operating profit of US$24.4 million for the six months to 31 March, up 39% from a year earlier, on revenue that rose 6.8% to US$160.8 million.
Adjusted pre-tax profit jumped 47% to US$21.8 million and the interim dividend was lifted 6.6% to 8.1 US cents per share.
However, investors focused on the decline in orders to US$117.9 million and an 11% reduction in the closing order book to US$219.9 million.
Avon said the weakness reflected the timing of US Department of Defense orders and softer commercial helmet demand at Team Wendy, partly linked to delays caused by the recent US government shutdown.
Analyst Andrew Humphrey at house broker Peel Hunt said funding delays had created “temporary weakness” in orders, noting that discussions over extending Department of Homeland Security funding were continuing after the shutdown ended in late April.
Orders from the Protection division were around US$10 million lower than a year earlier, although the comparison was distorted by unusually strong Ukraine-related contracts in the prior period.
The broker added that the Protection order pipeline remained “robust”, with a book-to-bill ratio of 0.95 times in the first half of 2026.
Team Wendy still achieved production milestones under its Department of Defense contract for the next-generation Advanced Combat Helmet, doubling delivery volumes over six months, with poduction at the Cleveland facility largely stabilised, helping adjusted operating profit at Team Wendy rise to US$3.7 million from US$3.2 million a year earlier despite lower revenues.
Chief executive Jos Sclater said: "We delivered a strong first half performance, with revenue, profit and margin all up significantly, reflecting the long-term demand opportunity in our markets and the progress we have made in strengthening our operational execution."
He said demand for Avon's products is increasing with "long‑term growth visibility and an exciting development pipeline to support expansion internationally and into adjacent markets".
The board will set out new mid‑term targets at the end of the financial year, he added.
Avon shares sank below 1,500p in Wednesday morning trading, the lowest since May last year.