Avon Protection PLC (LSE:AVON), a provider of protective equipment to the military and emergency services, said Paul McDonald will be stepping down as chief executive after five years in the role and 19 years with the company.
He will leave at the end of this financial year, with the first half having seen a swing to a loss and the second half entirely dependent on the timing of customer orders.
The shares dived 16% to 1,004p in early trades.
A pre-tax loss of US$13.6mln was reported for the half year ended April 2, compared to a profit of US$400,000 a year ago, as revenue was broadly flat at US$121.9mln compared to US$122.0mln.
The company blamed the "extended delay in the sign-off of the US federal budget" which impacted customers dependent on federal funding, and lower than expected product deliveries caused by order delays and supply chain challenges.
The company said US Department of Defense revenue of US$43.5mln was 32.5% lower versus last half year and the adverse product mix was due to lower sales of higher margin products, particularly first responder products, its highest margin business.
"This should gradually reverse in H2, given the strength of demand, in part dependent on further orders that are expected to be received in Q3," it said.
The company said volatility of funding and timing of customer orders is a risk to the second half outlook on revenue mix.
"The first six months of FY22 has seen both challenge and opportunity for the group," said McDonald. "While we have experienced some specific issues impacting profitability, they have been identified. We are working proactively to address them."