2nd Apr 2007 07:02
Avon Rubber PLC02 April 2007 Embargoed until 2 April 2007 at 07.00 AVON RUBBER p.l.c. ("Avon" or "the Company") TRADING UPDATE In the light of the forthcoming requirements which will increase the frequencyof market reporting and the significant changes in the Group recently, theCompany is issuing this update in respect of the half year ending on 31 March2007. Protection We have made significant progress in our new M50 respirator and filterproduction facility in Cadillac Michigan. The Low Rate Initial Production order(LRIP) for the US Department of Defense has been successfully completed and, asindicated in the Chairman's AGM statement of 25 January 2007, we have receivedfollow on orders. We experienced some excess cost in delivering the LRIP and asa result have made changes to the organisation to address this. We are alreadyseeing the benefits of these changes. We remain confident that further orderswill be received enabling us to continue production at current levels for theremainder of the financial year. In our AGM statement we noted that demand at ISI has continued to be lower thanexpected due to delayed release of federal funding grants. This has continued tobe the case despite grants starting to be released in late 2006. We believe thatsome of the delay in utilising these grants may be due to fire departmentswaiting for the introduction of new National Fire Protection Association (NFPA)standards for breathing apparatus, effective from 31 August 2007. We stillexpect some improvement in performance from ISI in the second half, but at aslower rate than previously anticipated. Despite significant sales to the National Health Service, we have only seen lowvolumes of sales of our new Rapid Escape Hood to law enforcement agencies.Changes in Government procurement arrangements and budget allocations havedelayed the expected subsequent high volume demand. The resulting shortfallshave, however, been offset by continuing strong demand for our legacy S10 andFM12 respirators. Dairy Our dairy rubberware business is performing to expectations. In North America wehave maintained our strong market position. In Europe sales have grownparticularly in the higher margin aftermarket business. We also remain focusedon identifying and benefiting from new geographic markets for these products. Other Businesses Our Engineered Fabrications business in the USA has continued to grow sales andimprove operational performance with an expectation that this will continue.Progress in our UK based Aerosol gaskets operation has however been limited bythe effect of the weaker US dollar which will also have an impact on thetranslation of our North American earnings. Our expectation of a return to profitability in the first half year remainsunchanged. This would represent a significantly improved result compared to the£3.3 million loss incurred by our continuing businesses in the second half of2006. As we noted in the AGM statement, our short-term challenge is predictingthe timing and rate of growth of the respiratory protection business. However,we remain confident that this area represents an opportunity for exciting growthin both the near future and longer term. -- ENDS -- For further enquiries please contact: Avon Rubber p.l.c. 01225 896831Terry Stead, Chief ExecutivePeter Slabbert, Group Finance Director Weber Shandwick Financial 020 7067 0700Richard HewsRachel TaylorHannah Marwood NOTES TO EDITORS: Avon Rubber p.l.c. is an international polymer engineering group adding valuethrough material, manufacturing and industry sector expertise. The Group iscurrently capitalised at approximately £51 million. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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