Avon Protection Regulatory News (AVON)

8 Sep 2006 07:01

Avon Rubber PLC08 September 2006 Embargoed until 0700 8 September 2006 AVON RUBBER PLC ("Avon" or "the Company") TRADING UPDATE Avon Rubber p.l.c. has undertaken significant changes during 2006 and as aresult the Company is issuing this update to aid the understanding of the impactof these changes before our year end on 30 September. Automotive At the time of our interim statement in May we announced the agreement to dispose of our Automotive businesses. We expected the transaction to be completed by the end of June and no later than the end of July. As a result of certain events which we subsequently announced, completion was delayed until 11 August 2006. The delayed completion means that Avon's full year results will include Automotive's traditionally weaker trading months of July and August, as well as higher interest charges due to the late receipt of proceeds. Recent announcements of downturns in the automotive market reinforce the rationale for exiting this area of our business. Protection In our interim statement we reported that we had experienced delays in the introduction of the newly developed rapid escape hood. Since that time further slippage has occurred in finalising the necessary approvals. This has delayed our initial production of this exciting new product. In North America we have also experienced delays in finalising agreement of the design specification for the new M50 respirator, which has resulted in a later start to the initial production. Both of these products are now in production and we expect to exit this financial year with the M50 production rates at the level required for the following financial year and the escape hood being produced at rates necessary to achieve targeted levels by the end of the first quarter of the 2007 financial year. Demand for both of these products remains in line with our earlier estimates. In addition ISI has experienced lower than expected demand due to delayed allocations of Federal Fire grants. We expect these grants to be released in October. These various delays have resulted in a deferral rather than a loss of sales. Other Businesses Our dairy business continues to deliver strong operational performance, particularly in North America. We are also seeing consistent strong operational performance from our engineered fabrications business in Picayune, Mississippi. As a result of these various factors our second half trading performance will besignificantly weaker than we anticipated at the time of the interimannouncement. During the year we have undertaken a major restructuring of the Group. Wedisposed of the Automotive businesses, restructured the UK operations asoutlined in the interim statement and, as previously announced, effected thesale and leaseback of our UK manufacturing site at Hampton Park West. We havealso signed an agreement to sell Zatec, our business machines operation based inRaynham, Massachusetts. We anticipate that these and other actions are likely toresult in a non-trading charge for the year in excess of the £15.9 million(pre-tax) charge reported in the interim results. The 2006 financial year has been a year of major strategic change and, whilstthe results for the year will not be as good as previously anticipated, we areconfident we have put in place the foundations for the exciting growthopportunities we anticipate over the next few years. -- End -- For further enquiries, please contact: Avon Rubber p.l.c 01225 896831Terry Stead, Chief ExecutivePeter Slabbert, Group Finance Director (Local/Trade Press) 01225 896300Fiona Stewart Weber Shandwick | Square Mile 020 7067 0700Richard Hews / Rachel Taylor / Stephanie Badjonat NOTES TO EDITORS: Avon Rubber p.l.c. is an international polymer engineering group adding value through material, manufacturing and industry sector expertise. The Group is currently capitalised at approximately £50 million. This information is provided by RNS The company news service from the London Stock Exchange