Avon Protection shares boom as AIM firm agrees US military contract

Shares in Avon Protection soared by more than 30 per cent on Wednesday after the AIM-listed manufacturer revealed a £15million contract with the US Department of Defense.

Wilshire-based Avon told investors it had received an order from the DoD for 380,000 pairs of M61 Filters, which are a component used in gas masks, with deliveries to commence early next year.

Avon Protection shares were up 30.3 per cent in morning trading to 963p, taking year to date performance to an 11.4 per cent loss. It remains well below its 2020 peak of around 4,000p. 

Last November, the company’s shares lost half their value after it admitted bullet-proof vests it provided for US soldiers did not work.

It was the latest incident to endanger Avon’s status as a key supplier to the American military after the group’s body armour failed a similar test conducted by the US army in December 2020.

Shares came under further pressure in May when Avon slumped to a first-half loss on the back of supply chain problems and a slowdown in orders.

However, following the outbreak of the Ukraine war, the manufacturer forecasted higher demand in both the medium and long term for personal protective equipment across NATO member countries.

It was also announced in May that boss Paul McDonald would step down at the end of September, and the firm has now said the search for his successor is ‘making good progress’.

In an update today Avon told investors that trading in the second half of 2022 had improved ‘due to a modest improvement in mix’ in its respiratory portfolio and the commencement of body armor deliveries.

Avon added: ‘In addition, cost reduction activities continue to progress as expected. Overall, performance for the year on an excluding armor basis is predicted to be at least in line with market expectations.’