Avon Protection has decided to pursue an “orderly wind-down” of its troubled armour business unit, the UK-based company announced on 15 December.
The closure will take place over two years to allow the business to fulfil its existing customer commitments, Avon said. The exit is the result of a strategic review that Avon launched after new and legacy body armour products experienced test failures and approval delays.
While the company expressed confidence it will soon resolve the legacy product's problems, it concluded that redesigning the new product would be expensive and time-consuming and would provide no guarantee of success. It considered selling the business but determined “that any divestment is unlikely to be achievable, given the uncertainties surrounding the business”.
Avon said the closure will enable it to focus on its larger, more successful respiratory and head protection businesses. The armour business accounted for just USD6.5 million of its USD248.3 million in fiscal year 2021 revenue, while respiratory and head protection contributed the remaining USD241.8 million.
“Despite the obvious disappointment of body armour, we continue to have confidence in the medium term and remain optimistic for the years ahead,” Avon CEO Paul McDonald told analysts.
Avon obtained the armour business as part of its acquisition of 3M's personal protective equipment business in January 2020. “Whilst our primary interest was [3M's] helmets business, we regarded armour as a sensible adjacency to helmets and one that should be cash-generative and we're happy to support,” McDonald said.
In addition to body armour, the armour business makes flat armour for fixed-wing aircraft.
Looking to read the full article?
Gain unlimited access to Janes news and more...
