Skip to main content
Sister Publication Links
  • European Rubber Journal
  • Plastics News
  • Tire Business
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Tire
    • Airless Tires
    • Non-Tire
    • More News
    • Suppliers
    • Silicone
    • Latex
    • Technical Notebooks
    • Opinion
    • Online Exclusive
    • Special Reports
    • Automotive
    • Executive Action
    • Government/Legal
    • Sustainability
    • Blogs
      • Products
      • Wacky World of Rubber
    • Best Places to Work
    • War in Ukraine
    • Rubber Division IEC
    • ITEC
    • Women Breaking the Mold
  • PFAS
  • Custom
    • Sponsored Content
    • White Papers
  • Resources
    • Directory
    • Classifieds & Mold Mart
  • Data
  • Events
    • RN Events
    • RN Livestreams/Webinars
    • Industry Events
    • Past Events
    • Rubber News M&A Live
    • PFAS Live
    • Ask the Expert
    • International Tire Exhibition & Conference (ITEC)
    • Women Breaking the Mold Networking Forum
  • Advertise
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. Financial
December 23, 2020 10:43 AM

Avon Rubber shares wobble on U.S. contract delays

European Rubber Journal Report
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    MELKSHAM, England—Shares in Avon Rubber P.L.C. are recovering after the company disclosed Dec. 17 that product-approval issues would delay its delivery of ballistic protection contracts to the U.S.

    Avon shares subsequently fell by almost 20 percent to reach $4.06 on Dec. 21, before recovering slightly to $4.23 on Dec. 22—perhaps reflecting investor confidence in the positive business outlook presented in the company's trading update.

    Processes to approve "enhanced small arms protective inserts" (DLA ESAPI) for the U.S. Defense Logistics Agency and "vital torso protection" (VTP) body armor plates for the U.S. Army were to conclude in the first half of Avon's fiscal year 2021—ended Sept. 30.

    However, the U.K. manufacturer said Dec. 17 that "disappointingly, these approval processes have been delayed as a result of a failure encountered in first article testing."

    While it is working with customers to expedite the approvals, Avon said the initial delay meant that initial deliveries under the contracts would not occur until the first half of its 2022 financial year.

    "We are working collaboratively with our customers to resolve the delays to product approval for the DLA ESAPI and VTP contracts as quickly as possible," Avon Rubber CEO Paul McDonald said.

    Separately, Avon revealed that a protest had been made against a contract, disclosed Sept. 24, to supply the U.S. Army's "next generation integrated head protection system."

    "Whilst the delay created by this protest is unwelcome, its outcome is not currently expected to have any material impact on Group expectations for FY21," the company said.

    Trading update

    The contract delays were announced alongside a business update stating that trading had "continued as expected in the first quarter of FY21, with good order intake across our portfolio of life critical personal protection systems for the world's militaries and first responders."

    Within the military business, Avon added that it had received first orders under the NATO Support & Procurement Agency Contract totaling $33 million.

    There were also follow-on orders from the U.S. Department of Defense under a mask and powered air system contract in addition to continued strong demand for spares and accessories from the DOD and rest-of-world military customers.

    So, while the contract-delivery delays "will reduce overall expectations for FY21," Avon said it is "confident in achieving its medium-term expectations given the momentum we are seeing across the business."

    Related Article
    Avon completes acquisition of U.S. helmet maker Team Wendy
    Avon Rubber completes divestment of dairy equipment unit
    Avon wins $93 million deal for helmet supply to U.S. Army
    Letter
    to the
    Editor

    Rubber News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].

    Most Popular
    1
    Breaking molds, inspiring an entire industry | Women Breaking the Mold 2023
    2
    Banu Bilgin, Prometeon Tyre Group | Women Breaking the Mold 2023
    3
    Camille Duvalle, ExxonMobil Product Solutions Co. | Women Breaking the Mold 2023
    4
    Diya Garware Ibanez, Fulflex | Women Breaking the Mold 2023
    5
    3 key issues the UAW is fighting for in Detroit 3 contracts
    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Rubber News delivered straight to your inbox, free of charge.

    Subscribe Today

    Subscribe to Rubber News to get the best coverage and leading insights in the industry.

    SUBSCRIBE
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter

    MISSION

    To serve companies in the global rubber product industry by delivering news, industry insights, opinions and technical information.

    Contact Us

    2291 Riverfront Pkwy, Suite 1000
    Cuyahoga Falls,
    OH 44221

    Customer Service:
    877-320-1726

    Resources
    • About Us
    • Digital Edition
    • Staff
    • Advertise
    • Order Reprints
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Careers
    • Ad Choices
    • Sitemap
    Partner Sites
    • Tire Business
    • European Rubber Journal
    • Plastics News
    • Urethanes Technology
    • Automotive News
    • Crain Brands
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Tire
      • Airless Tires
      • Non-Tire
      • More News
        • Automotive
        • Executive Action
        • Government/Legal
        • Sustainability
        • Blogs
          • Products
          • Wacky World of Rubber
      • Suppliers
      • Silicone
      • Latex
      • Technical Notebooks
      • Opinion
      • Online Exclusive
      • Special Reports
        • Best Places to Work
        • War in Ukraine
        • Rubber Division IEC
        • ITEC
        • Women Breaking the Mold
    • PFAS
    • Custom
      • Sponsored Content
      • White Papers
    • Resources
      • Directory
      • Classifieds & Mold Mart
    • Data
    • Events
      • RN Events
        • International Tire Exhibition & Conference (ITEC)
        • Women Breaking the Mold Networking Forum
      • RN Livestreams/Webinars
      • Industry Events
      • Past Events
      • Rubber News M&A Live
      • PFAS Live
      • Ask the Expert
    • Advertise
    • DIGITAL EDITION