Avon Technologies Posts Robust FY25 Growth and Record Order Book

Revenue up 14% and margins rising – the FY25 headline numbers

Avon Technologies has delivered a punchy set of prelims for the year to 30 September 2025. Revenue rose 14.1% to $313.9m, adjusted operating profit climbed 27.5% to $40.3m, and adjusted operating margin improved to 12.8% from 11.5%. Adjusted basic EPS was up 30.5% to 91.2c, and the dividend increased 5.6% to 24.6c.

The statutory picture improved too. Operating profit was $19.2m versus $10.7m last year, with statutory EPS of 34.9c. Orders received dipped 3.5% to $351.5m, but the order book hit a record $262.8m, up 16.7%.

Metric	FY25	FY24	Change
Revenue	$313.9m	$275.0m	+14.1%
Adjusted operating profit	$40.3m	$31.6m	+27.5%
Adjusted operating margin	12.8%	11.5%	+130 bps
Adjusted EPS	91.2c	69.9c	+30.5%
Total dividend	24.6c	23.3c	+5.6%
Orders received	$351.5m	$364.4m	-3.5%
Closing order book	$262.8m	$225.2m	+16.7%
Statutory profit before tax	$13.1m	$2.3m	n.m.
Net debt (ex leases)	$50.1m	$43.5m	+15.2%

Jargon buster: “Adjusted” excludes items like transformation costs. “ROIC” is return on invested capital, and it rose to 18.6%. “Cash conversion” is operating cash flow compared with EBITDA; Avon delivered 90.3%.

Order book at a record $262.8m – why that matters

For a defence-tech supplier, backlog is king. The Group finishes FY25 with a record order book of $262.8m, giving clear visibility into FY26. Within that, there is $131m of US DoW backlog for NG IHPS and ACH Gen II helmets, plus a Turkish Ministry of Defence order for a full CBRN ensemble and new rebreather wins in Canada and two European navies.

Note the mix shift: Avon Protection’s order book jumped to $117.0m, helped by NATO demand for respirators, boots and gloves. Team Wendy’s order book eased to $145.8m as deliveries accelerated, particularly to the US Department of War (DoW – the company’s term for the former DoD). The headline takeaway is positive: higher quality, multi-programme backlog and better pricing on recent helmet awards.

Operational turnaround: from batch to flow, and it shows in the numbers

Management’s continuous improvement push is landing. All factories have moved from batch to flow manufacturing, the Irvine, California site has been closed, and scrap fell 24% year-on-year to 1.24% of revenue. Average inventory turns improved to 3.0x and year-end turns to 3.32x.

Team Wendy, the prior pain point, tripled helmet output in Q4 to hit planned rates on NG IHPS. The Group ended the year with a run-rate operating margin approaching the long-term 14-16% target range. In short, the heavy lifting in operations is translating into margin momentum.

Segment performance: premium margins at Avon Protection, ramp at Team Wendy

• Avon Protection: Revenue up 15.9% to $168.8m, adjusted operating profit up 26.3% to $33.6m, margin 19.9% (18.3%). Strength in NATO and Australia offset lower US commercial mask sales.
• Team Wendy: Revenue up 12.1% to $145.1m, adjusted operating profit up to $6.7m, margin 4.6% (3.9%). DoW helmets and Navy bump helmets led growth, with US law enforcement up 15%.

Programs of Record, which are formally approved US procurement lines, now total nine across the Group, anchoring multi-year demand. On the product front, launches such as the RIFLETECH helmet and the MITR lightweight respirator drew strong early interest.

Innovation pipeline: CBRN and head protection optionality

R&D investment was $13.5m, mostly expensed. The NATO Support and Procurement Agency orders for FM50 respirators plus boots and gloves have reached $100m across 16 countries. MITR, the modular half mask aimed at lower-threat missions and law enforcement, now has CE and US NIOSH approvals, with customer-funded development underway on ENBD and STAR variants with the DoW and US Marines.

On integrated protection, Avon won a full ensemble order with Turkey and is seeing two-year backlogs in boots and gloves. Team Wendy’s RIFLETECH is shipping to international military users and US police, cementing its positioning from bump helmets through to high-end rifle protection.

Cash, debt and dividends – a balanced picture

Cash generation was solid at 90.3% cash conversion, despite a year-end receivable of $17.2m from the DoW after Q4 shipments, which has been paid in full by the announcement date. Net debt excluding leases rose to $50.1m, or $68.0m including leases, reflecting transformation spend, LTIP share purchases and dividends. Leverage is comfortable, with a bank leverage ratio of 0.86x and headroom on a $137m RCF to May 2028.

The dividend steps up again to 24.6c, covered 3.7x by adjusted EPS. That is sensible discipline while Avon finishes its footprint optimisation and completes the last legs of the transformation.

FY26 guidance and my take

• High-single-digit revenue growth.
• Adjusted operating margin inside the 14-16% target range.
• Transformation expenses cut by more than 60% to about $6m.
• Cash conversion above 80% before transformation costs.

That guidance looks credible. The record order book, helmet backlog with the US, and NATO demand for CBRN kit give good visibility. Closing Irvine should benefit Team Wendy’s margin from FY26, and the shift to flow manufacturing should keep scrap and productivity trending the right way. The door is opening to bolt-on M&A, but management is rightly prioritising organic growth and execution for now.

Where the risks sit

• US government shutdown risk: cannot deliver helmets during a shutdown, which ties up working capital. Management does not see a long-term impact, but it can bump cash temporarily.
• Team Wendy ramp: output surged in Q4 and needs to be sustained. Recruiting and line optimisation in Cleveland remain focus areas.
• Competition on NG IHPS: a potential new supplier could enter as sustainment planning evolves.
• Costs: US healthcare inflation is flagged as a 2026 headwind. Net debt ticked up as transformation spending ran at $15.4m this year.

What this means for investors

In two years Avon has moved from firefighting to a disciplined, operationally improving platform with expanding end markets. The strategic backdrop is supportive, with European defence budgets rising and heightened interest in CBRN protection. The company has already hit several 2027 targets early: revenue growth ahead of plan, ROIC at 18.6%, cash conversion strong, and leverage low.

There are still moving parts – chiefly the Team Wendy ramp and US budget dynamics – but the trajectory is positive. If management lands FY26 guidance and converts the pipeline in MITR, rebreathers and high-end helmets, there is scope for margins to push further into the 14-16% range and for earnings to compound from a stronger base.

Overall view: a good year operationally, a better one financially, and a record backlog to work through. The shares will live and die on execution in Cleveland and the cadence of US orders, but the heavy lifting on the factory floor is largely done. On balance, this feels like a business with improving quality of earnings and more optionality than it had a year ago.