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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Investors in defence firm Avon Protection (AVON), nursing the wounds from a 13 August profit warning, might have hoped news of a contract win on 8 September would restore some momentum to the share price.
However, the $87.6 million award from the US Army did little to arrest Avon’s recent slide. The key reason was that it merely replaced a previous contract to supply a next generation Integrated Head Protection System, which had been withdrawn in the face of a competitor protest.
For now, the market remains wary of ongoing risks facing the business, as Berenberg recently noted: ‘Any further challenges with the body armour product approval could result in further earnings downgrades, asset write-downs and longer-term revenue and reputational damage.
‘Supply chain challenges could remain problematic too, while we also await the appointment of a new chief financial officer, who could reassess current guidance.’
SHARES SAYS: We think investors will eventually be rewarded for their patience, but it will require a more significant catalyst to get the stock moving in the right direction. Sit tight for now.
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