Avon Protection tanked on Friday after it warned the revenue contribution from its body armour segment for FY22 and beyond will be “significantly reduced” following a testing failure for one of its products and delays to product approvals.
The maker of gas masks and helmets said the US Army Vital Torso Protection (VTP) ESAPI body armour plates have encountered a testing failure that will significantly delay the likely approval timetable for the product.
Separately, it has experienced further delays in obtaining final product approvals for the DLA ESAPI body armour plates, with approvals for this product now expected in the second quarter of the year ending 30 September 2022.
As a result, Avon has initiated a strategic review of the body armour business.
The group’s FY22 revenue guidance had included around $40m of body armour revenue. However, due to the issues mentioned above, this contribution is now expected to be “significantly reduced”, with the ultimate impact, including any associated cost savings, depending on the outcome of the review process.
Avon said its respiratory protection and helmet product portfolios are unaffected.
The group said its underlying trading results for FY21 are expected to be in line with the guidance given in the update on 13 October. However, it has delayed the announcement of its FY21 results, which had been due on 23 November, “to allow for a review of the carrying value of the assets related to the body armour business and the additional audit work arising from this post balance sheet event”.
At 0820 GMT, the shares were down 42% at 1,097.10p.
