Interim Management Statement

    RNS Number : 9193A
  Avon Rubber PLC
  08 August 2008
   

    


     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.  

This information is provided by RNS
The company news service from the London Stock Exchange
 
  END 
 
IMSSSWFMWSASEEA