Avon Protection PLC (LSE:AVON) shares have plunged 44% to 1,060p after the company delayed its results in order to carry out a strategic review following testing failures for the US Army body armour plates.
The defence industry supplier formerly known as Avon Rubber had previously been awarded a contract for the US Defense Logistics Agency (DLA) Enhanced Small Arms Protective Inserts (ESAPI) and US Army Vital Torso Protection (VTP) ESAPI body armour plates.
“Disappointingly, the VTP ESAPI plates have encountered a failure in First Article Testing which will significantly delay the likely approval timetable for this product,” Avon said.
“Separately, we have experienced further delays in obtaining final product approvals for the DLA ESAPI body armor plates, with approvals for this product now expected in the second quarter of our financial year ending 30 September 2022.”
Following this major setback, Avon, said the board has launched a strategic review of the body armour business, which was expected to contribute US$40mln of revenue in the current financial year.
The division’s financial contribution is now expected to be “significantly reduced”, though the exact impact depends on the outcome of the review.
Results for the year to September 2021 had been scheduled for 23 November but a revised date is now expected to be in early December and an update on the strategic review and updated guidance for the new year and beyond is promised.
10.22am: Powerhouse Energy and 600 Group (AIM:SIXH) lead early risers
The 600 Group (AIM:SIXH) PLC was among the early risers on Friday, with shares in the industrial engineering company cranked up 12% to 14.55p after it revealed good news about the US government’s Paycheck Protection Program and about its level of order intake in recent months.
All three of the AIM-listed company’s US operations have all been granted forgiveness of their second round loans under the PPP, totalling US$2.2mln.
General trading was also said been in line with board expectations, with order intake continuing to improve and the forward order book up to US$23mln as at 9 November, up from US$22mln in September, US$11mln a year ago and now above pre-pandemic levels.
Surging even higher was Powerhouse Energy Group PLC (AIM:PHE), up 35% to 5.95p after flagging that overseas partner Hydrogen Utopia (HUI) has signed a framework agreement with German chemical giant Linde to produce hydrogen, starting with a project in Poland.
Linde has been granted five-year exclusive rights to supply HUI in its development of Powerhouse’s waste-to-energy DMG technology in Poland, Hungary and Greece where HUI holds exclusivity for promotion and marketing of the technology.
The deal allows for potential wider applications across Europe on a project-by-project basis.
Linde Engineering has carried out a technical feasibility evaluation based on a planned plant to be located in Konin, Poland, where it would take the syngas produced by the 10 DMG units and provide clean-up and hydrogen extraction.