Last checked at 21 Jan 2009 07:00
Embargoed until 7.00 a.m. Wednesday 21 January 2009
AVON RUBBER p.l.c. ("Avon", the "Group" or the "Company")
AGM and Interim Management Statement
Avon Rubber p.l.c. issues this interim management statement for the period since 1 October 2008, ahead of its Annual General Meeting to be held at 10.30 a.m. today, 21 January 2009.
In increasingly challenging global economic conditions, Avon has returned to profitability (Profit Before Interest and Tax from continuing operations) in the three months to 31 December 2008, the first quarter of our financial year. The Protection & Defence business, led by our US Cadillac facility producing M50 mask systems for the US Government, has developed in line with our expectations and is meeting customer delivery schedules. The Dairy business has continued its strong 2008 performance.
The Cadillac facility has fulfilled its production and delivery schedule under the multi-year US Government contract and for a second quarter in succession has been profitable on a month by month basis, contributing to the Group's performance. We have received an order for 2009 from the US Government under the multi-year contract for 100,000 mask systems, valued at $18m.
Avon-ISI, which sells primarily to fire services in the US, has experienced difficult market conditions in the first quarter. We have implemented a cost reduction program which together with a stronger order book will improve this business' performance in the second quarter.
Sales by our Dairy business globally were strong and we expect this to remain the case. Falling milk prices may lead to a slightly softer market in the remainder of 2009, but the benefits of lower input costs, as falling oil prices are passed on by suppliers, should be positive.
The strengthening of our two major trading currencies, the Euro and the US Dollar, throughout 2008, is continuing to be of benefit to trading overall, although the strengthening of the US Dollar has increased our reported level of net debt by £3.2m due to the high proportion of US Dollar borrowings. Net debt at 31 December 2008 was £19.2m, (30 September 2008: £15.1m). The Group has banking facilities which run to June 2010, of £22.4m at 31 December 2008 exchange rates.
On 7 November 2008 we completed the sale of the Group's mixing facility to ATR Compounding Limited for a cash consideration of £2.05m. On 3 December 2008 we completed the sale and leaseback of our Dairy warehouse in California for a net consideration of US$2m. The proceeds of both transactions were used to reduce borrowings.
Outlook
Current trading, our long term US Government mask contract, stable profitable Dairy business and the stronger US Dollar give us confidence that we are on target to return the Group to full year profitability.
For further enquiries, please contact:
| Avon Rubber p.l.c. | ||
| Peter Slabbert, Chief Executive | 01225896831 | |
| Andrew Lewis, Group Finance Director | ||
| Fiona Stewart, Corporate Communications Executive | 01225 896871 | |
| Weber Shandwick Financial | ||
| Nick Oborne | 020 7067 0700 | |
| Clare Perks | ||
NOTES TO EDITORS: Avon Rubber p.l.c. is a world leader in the design, test and manufacture of advanced Chemical, Biological, Radiological and Nuclear (CBRN) respiratory protection solutions to the worlds military, law enforcement, first responder, emergency services, fire and industrial markets. Avon has a unique capability in CBRN protection based on a range of advanced CBRN technologies in respirator design, filtration and compressed air breathing apparatus. This enables Avon to develop specialised solutions that take full account of user requirements. Avon also owns a world leading dairy business manufacturing liners and tubing for the automated milking process. For further information please visit the Group's website www.avon-rubber.com