Avon Technologies (LSE:AVON) shares dropped 5% in Tuesday's trade, to 2,280p, after releasing a trading update, telling investors that it expects to generate $50 million to $60 million in free cash flow this financial year, up from $30.9 million last year.
At the top of that range, the maker of military helmets and respirators would nearly double the cash its operations produce after interest payments and investment in equipment.
The improvement is already visible on the factory floor. Avon produced more helmets at its Team Wendy business and handled record filter volumes in the year to September.
Sales rose 12.7% to $353.7 million, while adjusted operating profit climbed 50.6% to $60.7 million.
Avon kept just over 17 cents of adjusted operating profit for every dollar of sales, up from just under 13 cents a year earlier.
Higher production and IT savings helped, although some of the gains came from one-off items, including US tariff refunds. Reported profit before tax rose to $42 million from $13.1 million.
Avon ended September with $262.7 million of orders on its books, broadly unchanged from a year earlier.
For the year to September 2027, it expects sales to grow by a mid-single-digit percentage and its adjusted operating margin to reach 16% to 18%.
