Avon anticipates 'significant growth' in FY 2023

MELKSHAM, U.K.—Despite seeing a decline in annual earnings, Avon Protection P.L.C., expects a "strong performance" in its 2023 financial year.

The United Kingdom-based manufacturer said this is due to "solid order intake."

During its fiscal year, ended Sept. 30, the group saw an EBITDA decline of nearly 39 percent year-over-year to $25.5 million, on 9.1-percent sales of $272 million.

Adjusted operating profit fell 61 percent to $10 million during the period, while adjusted earnings margin fell to 9.4 percent from 15.1 percent reported last year.

Avon said the results reflect "a combination of product-mix shift and operational challenges, including supply chain issues."

The company remains upbeat about the short-term outlook, however, noting a "much-improved operational performance in the second half."

During the second six months, Avon said margins were up at 12.9 percent, following improvement in product-mix and manufacturing efficiencies.

Furthermore, Avon said it made "significant progress" toward reducing overheads, with a saving of $21 million per year.

In addition, the U.K. group has taken up forward ordering of long lead-time components in the face of supply-chain disruption.

"We have made good progress in 2022 preparing for a new chapter of growth and future value generation, including restructuring some areas of the business and resolving legacy execution issues," Executive Chair Bruce Thompson said.

He added that there is "a significant long-term growth opportunity" for Avon, with demand for respiratory and head protection systems being "as strong as ever."

For the 2023 financial year, Avon said it has an opening order book of $151.3 million, which provides the group with good visibility going into the new financial year.