Deal pushback pulls Avon shares down

Shares in FTSE 250 safety equipment specialist Avon Rubber (LON:AVON) dropped by 13.50% to 3,235p (as of 13:45 GMT) after the approval of certain US military contracts was delayed. It had been expected that two large contracts would be booked in the first half of 2021, but are now more likely to be delivered starting in early 2022.

CEO Paul McDonald commented: “We are working collaboratively with our customers to resolve the delays to product approval for the DLA ESAPI and VTP contracts as quickly as possible. These contracts remain an important part of the ballistic protection portfolio and will be a significant contributor to the Group over the medium term.

“The business continues to perform strongly, and our 2021 financial year will see further significant progress as a result of continued growth as well as the contribution from the recent Team Wendy acquisition. We remain very confident in the Group’s medium-term prospects which are built on a strong, growing and visible contract pipeline, together with a clear strategy.“