Avon Protection Regulatory News (AVON)

21 Jul 2005 07:01

Avon Rubber PLC21 July 2005 21 July 2005 Avon Rubber p.l.c. RESTRUCTURING AND TRADING UPDATE Restructuring and Board changes------------------------------- Following the appointment of Terry Stead as Chief Executive of Avon Rubberp.l.c., the Board has conducted a review of the structure and management of theGroup. The Board has concluded that the Group will operate more effectively byreducing central management, with as many functions as possible devolved to thebusinesses. The new management structure will result in the elimination of thecurrent divisional structure which will lead to a significant reduction incosts. Lee Richards will continue to head the Avon Automotive business. All the otherbusinesses will report to Jonty Palmer who retains his responsibility forbusiness development, particularly focusing on the development of the Group'sprotection activities. Both Lee Richards and Jonty Palmer will report to TerryStead. The Board of the Group will comprise the Chairman, two independent Non ExecutiveDirectors, the Chief Executive and the Finance Director. As previously announcedSteve Willcox, the former Chief Executive, is retiring and will be leaving theGroup at the end of September. Steve Stone, currently Managing Director ofTechnical Products, has decided to take early retirement at the end of August2005. He has agreed to make himself available to the company on a consultancybasis so that his wealth of technical knowledge is not lost. Lee Richards hasagreed to step down from the Board but will retain his executiveresponsibilities. Eric Priestley, the deputy Chairman, will retire from theBoard at the time of the AGM in January 2006. It is expected that the annual savings from the restructuring will be in excessof £2.5 million. The savings should start from the end of August this year andthere will be a one off exceptional charge of about £1 million in order toimplement these cost reductions. These savings will be incremental to thesavings arising from the creation of a single global automotive business. Trading update-------------- At the time of our interim announcement in May we thought that there could be asoftening in Automotive markets, particularly affecting larger vehicles producedby the traditional North American manufacturers. This has happened and, coupledwith increased material prices and continuing competitive pressure means that wenow expect the profit in the second half of the year to be lower than in thefirst half for our Automotive business, despite the expected growth beingsustained in Orizaba, Mexico. We also noted in our interim statement that we expected to see improved sales ofrespirators and flexible storage tanks in the second half year. In July wereceived Chemical Biological Radiological and Nuclear (CBRN) certification fromthe National Institute of Safety and Health (NIOSH) for our FM12 respirator.This will allow us to sell this product to the industrial and homeland securitymarkets in North America. However, as the approval was obtained late in ourfinancial year some of this year's anticipated sales may not be made until afterour year end, but we still expect to make significant sales to these markets. Wehave seen the expected strong demand for our new flexible storage tanksresulting in new orders. It is taking some time to achieve the increased rate ofmanufacture, but we expect to exit the year meeting the increasing demand inthis area. < ends > Contact Information: Avon Rubber p.l.c. 01225 861100Terry Stead, Chief ExecutivePeter Slabbert, Finance Director Weber Shandwick Square Mile 020 7067 0700Richard Hews / Stephanie Badjonat NOTES TO EDITORS: Avon Rubber p.l.c. is an international polymer engineeringgroup adding value through material, manufacturing and industry sectorexpertise. The Group is currently capitalised at approximately £55 million. Avon is a significant supplier to the world's automotive, engineering, dairy anddefence markets - manufacturing high performance elastomer products. This information is provided by RNS The company news service from the London Stock Exchange