Avon Technologies Interim Results: Transformation Delivers Strong Growth and Margin Improvement

Avon Technologies H1 2026 results show stronger profits, better margins and a business that looks far more in control

Avon Technologies has put out a genuinely solid set of interim results for the six months to 31 March 2026. Revenue rose to $160.8m, adjusted operating profit jumped to $24.4m, and adjusted operating margin improved sharply to 15.2% from 11.8%.

That matters because this is not just a sales story. It is an execution story. Management says it has delivered its medium-term targets for growth, margin, return on invested capital and leverage 18 months early, and the numbers in this update give that claim some proper backing.

Key H1 numbers	H1 2026	H1 2025	Change
Orders received	$117.9m	$170.5m	(31.6%)
Closing order book	$219.9m	$247.0m	(11.4%)
Revenue	$160.8m	$148.7m	6.8% constant currency
Adjusted operating profit	$24.4m	$17.5m	39.4%
Adjusted operating margin	15.2%	11.8%	340bps
Adjusted basic EPS	56.4c	38.8c	45.4%
Interim dividend	8.1c	7.6c	6.6%

Avon Technologies profit margin improvement is the big headline here

The standout number for me is the adjusted operating margin of 15.2%. That puts Avon well inside its target range of 14-16%, and management says it has hit that range 18 months ahead of plan.

In plain English, margin is the share of revenue left after running the business, before interest and tax. A 340 basis point improvement means margins rose by 3.4 percentage points year on year. That is a meaningful step up, not a rounding error.

It also looks broad-based. Avon Protection delivered an adjusted operating margin of 22.3%, while Team Wendy improved to 5.4% from 4.4%. Team Wendy is still the weaker division, but it is at least moving in the right direction.

Why Avon’s adjusted results look strong, even if statutory profit is lower

Statutory operating profit came in at $16.5m, up from $6.2m, so that improved too. The gap between statutory and adjusted profit is mainly down to $2.8m of amortisation of acquired intangibles and $5.1m of transformation costs.

Adjusted numbers strip those items out to show the underlying trading picture. You can argue about the finer points of adjusted reporting, but in this case the direction of travel is clear either way: profits are up sharply.

Basic earnings per share rose to 35.0c on a statutory basis and 56.4c on an adjusted basis. That is the sort of jump investors like to see, especially when it comes alongside stronger margins rather than weaker ones.

Orders and order book fell – that is the main soft patch in these interim results

Not everything here is rosy. Orders received fell 31.6% to $117.9m, while the closing order book dropped 11.4% to $219.9m.

That is the number likely to make investors pause. Defence and protection companies live on future visibility, so a lower order book can spook the market even when current trading is strong.

Management’s explanation is that this is mainly about timing, especially for Team Wendy and DoW orders. DoW means United States Department of War in the RNS wording. The company expects follow-on DoW orders towards the end of this calendar year, and also expects US commercial helmet demand to recover in the second half.

I think that explanation is plausible, but it still needs proving. A timing issue is fine for one half. If the follow-on orders do not show up, this will become a more serious concern.

Avon Protection carried the growth while Team Wendy is still rebuilding momentum

The split between the two divisions tells the story nicely. Avon Protection was excellent. Revenue rose 23.0% to $92.9m, and adjusted operating profit reached $20.7m. Demand was helped by NATO mask orders, US law enforcement upgrades, emergency funding channels and a Canadian Armed Forces contract for the MITR mask.

Team Wendy was more mixed. Revenue fell 7.2% to $67.9m, largely because of a backlog in ballistic testing caused by the US government shutdown, which delayed acceptance of DoW orders. Even so, adjusted operating profit edged up to $3.7m and margin improved.

That matters because Team Wendy has been the operational headache. The update from Cleveland is encouraging: management says both IHPS and ACH are now delivering at contractually agreed production rates, with improving reliability. If that sticks, there is room for better profitability from here.

Cash flow was weak, but Avon says timing flattered the problem

The ugly number in the pack is cash conversion, which dropped to 38% from 56%. Cash conversion shows how much of accounting profit turns into actual cash. Lower is worse.

However, Avon says this was mainly due to timing. Specifically, $18m of cash from Team Wendy’s DoW shipments in March was received in the first week of April, just after the period end. Management says that without this timing effect, cash conversion would have been around 100%.

That makes the weak cash number easier to live with. Net debt excluding lease liabilities rose modestly to $58.0m from $54.9m, but leverage remains below 1x and the group has a $137m revolving credit facility running to May 2029, plus a $50m accordion. Balance sheet stress does not look like the issue here.

Dividend up and guidance unchanged – both point to management confidence

The interim dividend has been increased to 8.1c per share from 7.6c. That is not a huge rise, but it is another sign management feels comfortable with the trading outlook.

Full-year guidance was also maintained, and the tone was confident. Avon expects:

• Revenue growth in the high single digits
• Adjusted operating profit margin towards the top end of the 14-16% range
• Total transformation operating and capital expenditure of $7m
• Cash conversion above 80%

That reads well. When a company delivers a strong first half and then says it is on track to meet or exceed guidance, that usually lands positively.

What matters next for Avon Technologies shares in H2 2026

There are three big watchpoints from here. First, whether Team Wendy’s operational improvements hold up. Second, whether the expected DoW follow-on orders arrive on schedule. Third, whether US commercial helmet demand actually recovers in H2.

There are positives beyond that too. Avon flagged a $14m DoW filter order received after the period end and a new Middle East military order for the upgraded EXFIL Endurance helmet. Those wins add some extra comfort for the second half.

The company also says it will set new mid-term growth targets with its FY26 results. That suggests management thinks the transformation phase is mostly done and the business is ready to lean harder into growth.

My view on Avon Technologies interim results: more positive than negative, but orders need watching

My take is simple: this is a good update. Revenue growth was decent, profit growth was strong, margins were excellent, and the operational story finally looks credible rather than just aspirational.

The weak spot is clearly order intake and the lower order book. I would not ignore that. But the reasons given are specific, the post-period order news helps, and the balance sheet gives the company room to execute.

For retail investors, the key point is that Avon Technologies now looks like a business moving from fixing itself to benefiting from that hard work. If H2 delivers the expected orders and Team Wendy keeps improving, this could have more to run.