Avon Technologies profits surge as governments ramp up defence spending

(Sharecast News) - Military and civil protection equipment maker Avon Technologies on Tuesday reported a large jump in earnings and sales as governments ramped up spending in response to political instability.

For the fiscal year ended 30 September 2026, Avon Technologies reported revenue of $353.7m, up 12.7%. Adjusted pre-tax profit rose 58.7% to $55.4m, while statutory pre-tax profit surged 220.6% to $42.0m, reflecting strong operational performance, higher production volumes and benefits from the group's transformation programme.

"The demand environment has changed meaningfully over the last few years. Governments are rebuilding military and civil readiness, replacing and upgrading ageing equipment and responding to increasingly complex threats," the company said.

Looking ahead, management said trading has continued in line with expectations, supported by a record order book of around $1.3bn and sustained demand across its key defence markets. The group expects further growth in fiscal 2027, underpinned by strong visibility from existing contracts and programmes.

Avon also highlighted opportunities to expand margins as operational improvements and efficiency initiatives continue to take effect. While remaining mindful of supply chain and geopolitical risks, the board said it is well positioned to deliver continued profitable growth and create long-term shareholder value.

For 2027, Avon expects mid-single-digit revenue growth, an adjusted operating profit margin within its 16-18% target range, and free cash flow of approximately $50m-$60m. Management also reaffirmed medium-term targets of more than 5% annual revenue growth, adjusted EPS growth above 10% per annum and over $175m of cumulative free cash flow across the next three years.

Reporting by Frank Prenesti for Sharecast.com