Avon Technologies (LSE:AVON) announced its preliminary results for fiscal year 2025 on Wednesday, reporting performance that exceeded market forecasts. Pretax earnings and earnings per share both came in 5% above estimates, underscoring another year of solid execution.
The company generated sales of $314 million, representing a 13.8% year-on-year increase at constant exchange rates. EBITA rose 30.8% to $40.3 million, with margins improving by 130 basis points to 12.8%. Orders for the period totaled $352 million, down 3.6% from last year, while the closing backlog climbed 16.2% to $263 million. Adjusted basic earnings per share advanced 35.1% to 91.2 cents, supported by the rise in EBITA.
Net debt grew 15.2% to $50.1 million, mainly due to increased receivables related to Team Wendy shipments for the U.S. Department of Defense, which were subsequently reabsorbed. The leverage ratio improved to 0.86x from 0.91x in fiscal 2024, reflecting a stronger financial position.
By division, Team Wendy delivered sales of $145.1 million, up 12.1% year-on-year, with Department of Defense revenue rising 15.4% on higher deliveries of ACH Gen II and EXFIL helmets. The division’s order backlog ended the year at $146 million, down 4.8%, as shipments outpaced new orders. Avon Protection sales increased 15.9% to $168.8 million, with backlog surging 62.5% to $117 million, including $10.3 million in new rebreather orders.
Looking ahead, management expects “above-market” growth in fiscal 2026, noting that the closure of the Irvine facility will lead to a “significant” improvement in margins for Team Wendy.
For the upcoming year, the company projects high single-digit sales growth, EBITA margins between 14% and 16%, free cash conversion above 80%, and a reduction in transformation costs of over 60% to approximately $6 million. Avon has already met several medium-term goals two years ahead of schedule and maintains a robust balance sheet to support ongoing expansion and potential strategic acquisitions.
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