Sign In
Last checked at 
8 Aug 2008 07:00
8th August 2008
AVON RUBBER p.l.c.
("Avon", the "Group" or the "Company")
Interim Management Statement for the period from 31 March 2008 to 7 August 2008
In the interim results announced on 28 May 2008, the Company stated that the award of the multi-year respirator contract by the US Department of Defense (DoD) and the expectation of securing long-term contracts for the Engineered Fabrications business, should underpin the Group's return to profitability in the short-term. It was further explained that difficulties had been experienced in the production of filters for the M50 respirator, which had led to delays and cost overruns.
Avon has now commenced delivery to schedule of mask systems against the DoD order, but has experienced continuing start up production issues relating to these complex new filters which will restrict our ability to deliver accelerated quantities of systems this financial year. Avon is confident that measures have been implemented to resolve these issues. However, production costs, as a consequence, will be higher in the current financial year.
The Company is also pleased to announce that the DoD has exercised a requirements option under our contract which allows them to order total quantities of up to 300,000 mask systems per year for a period of up to 10 years. Orders of $17m are expected to be placed under this contract for delivery next year in addition to the $22m already on order.
Delays in the award of a multi-year Government contract to our US based Engineered Fabrications business will reduce its revenue this financial year. The Company remains confident that this contract will be in place for 2009. At Avon-ISI, the improved levels of enquiries and orders experienced towards the end of the first half have not been maintained, largely due to aggressive market pricing by competitors. We are taking actions to manage this situation.
Net debt increased to £18.3m at 30 June 2008 (31 March 2008: £13.5m) due to costs associated with the closure of the mixing plant and a further increase in working capital associated with the DoD contract.
The excellent performance from the Dairy business has continued. The Company believes that the Protection and Defense business with its range of new products, the orders currently in hand and the future opportunities arising from our unique market position will deliver significantly enhanced future performance.
Peter Slabbert, recently appointed as Chief Executive, commented:
"We have strengthened the management team with the appointment of Andrew Lewis as Group Finance Director and Matthew Evans from BAE Systems, as Rest of World Sales and Marketing Director within the Protection business and we are actively pursuing all opportunities for returning the Group to profitability."
END >
For further enquiries please contact:
Avon Rubber p.l.c:
Peter Slabbert 01225 896883
Weber Shandwick Financial:
Richard Hews
Rachel Martin 020 7067 0700
Hannah Marwood
NOTES TO EDITORS:
Avon Rubber p.l.c. is an international polymer engineering group adding value through material, manufacturing and industry sector expertise. For further information please visit the Group's website www.avon-rubber.com.
Follow the stocks
