Avon Protection share price plunges more than 20 per cent after wrestling with rising costs
Avon Protection shares have plunged, after the helmet maker warned investors of lower-than-expected profits in the first half of this year.
The London-listed protective equipment provider has been wrestling with “additional manufacturing costs” in recent months, as global raw materials prices are engulfed by inflation.
Supply chains have also been significantly stretched post-Brexit, with the world still navigating the Covid-19 pandemic, which has hit the firm’s helmets business, it said in its half-year trading update today.
Shares collapsed 23.6 per cent to 1,010p per share by mid-afternoon.
Profitability is expected to improve in the second half of the year, but will not completely “offset the weakness experienced” in the beginning of the year.
While the share price drop will add pressure to the firm, Avon attempted to reassure investors in the update that it has a strong outlook.
The company has seen a “notable increase” in customer enquiries amid the Ukraine conflict.
“We have a number of active discussions ongoing with customers regarding potential incremental orders across both respiratory and helmet products,” Avon said in the update, adding that the discussions are ongoing.