Avon Protection cut its revenue guidance for 2021 and 2022 because of delayed orders and supply chain disruption.
The personal protection products company said it expected revenue to be in the range of $245m-$260m for the year to the end of September and reduced its guidance for 2022 revenue to $320m-$340m.
Cash conversion in 2021 is likely to be about 50% because of inventory build-ups and delayed receipts from customers. Avon said it was also affected by a tight US labour market.
The FTSE 250 group said there was strong demand for its products with an order book up 21% to $146m in the 10 months to the end of July. Avon said it was confident that delayed orders would be received in the coming months but that it expects supply chain disruption and US labour conditions to persist into the next financial year.
Paul McDonald, Avon’s chief executive, said: “We have made considerable commercial progress over the last 18 months in building a broad portfolio of significant, multi-year contracts across the business, with the underlying demand momentum continuing, so the short-term disruption that we are seeing is unwelcome. These issues will be resolved over the coming months, but as they are affecting both our customers and suppliers simultaneously the situation has significantly limited our operating agility in the short term.”
The company said it had made “considerable further progress” on delayed product approvals in its military ballistic business.
