21st Apr 2008 07:00
Avon Rubber PLC21 April 2008 21 April 2008 AVON RUBBER p.l.c. ("Avon", the "Group" or the "Company") TRADING UPDATE AND BOARD CHANGES The Company is issuing the following update in respect of the half year ended on31 March 2008. In our AGM statement we noted that growth in our Protection and Defence businesshad been slower than we anticipated and that the Company was expectingconfirmation of the multi-year contract for the new M50 US military respiratorin the very near future. The regulatory and administrative processes undertakenby the US Government for contracts of this value and duration have taken muchlonger than previously projected. We are however now in final contractnegotiations with the Department of Defense for this 5 year contract worth inexcess of US$100million. A follow-on requirements option to cover significantadditional demand over a period of up to 10 years will be executed at the sametime. In the interim, government funding has already been committed for longlead items to allow us to commence production immediately under this programme. The effect has been to delay sales on the main production contract into thesecond half of the year. This will mean that the Group will incur a loss for thehalf year. Once the multi-year contract is received however, it will provide thebasis for increased turnover and a return to profitability in the second half ofthe year making a profit for the year as a whole. The 2009 financial year shouldreflect the full benefit of this new business. At the same time, Terry Stead has decided to stand down as Chief Executive withimmediate effect and will be succeeded by Peter Slabbert, Finance Director. The Chairman, Sir Richard Needham, commented: "Although the market and shareholders will be disappointed with our first halfProtection results, the Board is confident that the Company is very close toreceiving the multi-year order for the Joint Service General Purpose Mask fromthe US Government. It is not unusual for there to be teething problems with newand advanced programmes of this nature and we have experienced furtherunexpected delays. The order should deliver a long-term growing and profitablerevenue stream for our Protection operation to complement the already successfulDairy business. To win the world's largest contract for the world's mostadvanced respirator represents an enormous achievement for the Company." "We have now reached the point of restructuring where Avon Rubber is a highvalue-added, defence and dairy focused company. Terry Stead has therefore stooddown as CEO. His successor is Peter Slabbert our Finance Director. I am certainthat his experience and expertise make him the ideal candidate to take theCompany forward." Terry Stead said: "Having completed the major reorganisation from a mainly automotive business,and with the imminence of the multi-year order for the Joint Services GeneralPurpose Mask, I feel now is the right time for the Group to move forward undernew leadership. I wish Peter and his team every success in delivering thebenefits from these substantial opportunities." Commenting, Peter Slabbert said: "I would like to pay tribute to Terry Stead's contribution to the company over10 years as Finance Director and then CEO. During that time he has overseen therepositioning of the company from a predominantly automotive business to onefocused on international defence and dairy markets." < END > For further enquiries please contact: Avon Rubber p.l.c:Peter Slabbert 01225 896830Fiona Stewart, Corporate Communications Executive 01225 896871 Weber Shandwick Financial:Richard Hews 020 7067 0700Hannah Marwood NOTES TO EDITORS:Avon Rubber p.l.c. is an international polymer engineering group adding valuethrough material, manufacturing and industry sector expertise. For furtherinformation please visit the Group's website www.avon-rubber.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Avon Protection