Disposal
Avon Rubber PLC
22 May 2006
Embargoed until 0700 22 May 2006
AVON RUBBER PLC
('Avon Rubber' or 'the Group')
Proposed disposal of Avon Rubber's Automotive Division
('Avon Automotive')
HIGHLIGHTS
•Conditional agreement to sell Avon Automotive for a total value of £63
million
•Disposal will allow the Group to develop opportunities in respiratory
protection where Avon Rubber expects to achieve higher margins and growth
•Avon Rubber will continue to develop its strong market positions in
dairy, aerosol gaskets and engineered fabrications
•Cash proceeds from sale will be used, in the first instance, to reduce
debt
Commenting on the disposal, Trevor Bonner, Chairman of Avon Rubber said:
'The disposal signals a significant strategic advance for the Group allowing
Avon Rubber to focus on the high growth potential the Board has identified for
the Group's respiratory protection products. Avon Rubber will continue to
develop its strong market positions in dairy, aerosol gaskets and engineered
fabrications. This combination of established businesses and growth
opportunities provides a balanced portfolio of business activities for the
future.
The Board is excited about the opportunity to pursue its planned strategic
direction and is confident of the future opportunities for growth of the
continuing businesses as this strategy is implemented.'
For further information:
Avon Rubber p.l.c. 020 7067 0700
Terry Stead, Chief Executive (until 2.00pm)
Peter Slabbert, Finance Director
ING Corporate Finance 020 7767 1000
Simon Newton
Vinesh Karia
Weber Shandwick Square Mile 020 7067 0700
Richard Hews
Rachel Taylor
Stephanie Badjonat
ING Corporate Finance (the corporate finance division of ING Bank N.V., London
Branch), which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Avon Rubber and no one
else in connection with the Disposal and the associated related party
arrangements and will not be responsible to anyone other than Avon Rubber for
providing the protections afforded to clients of ING Bank N.V., London Branch or
providing advice in relation to the Disposal and the associated related party
arrangements, or any other matter referred to in this announcement.
This announcement is not intended to and does not constitute, or form any part
of, an offer to sell or an invitation to purchase any securities or the
solicitation of any vote or approval in any jurisdiction pursuant to the
Disposal and the associated related party arrangements or otherwise. Persons who
are not resident in the United Kingdom, or who are subject to the laws of any
jurisdiction other than the United Kingdom, should inform themselves about, and
observe, any applicable legal and regulatory requirements.
This announcement, including information included or incorporated by reference
in this announcement, may contain 'forward-looking statements' concerning the
Disposal and the continuing Group. Generally, the words 'will', 'may', 'should',
'continue', 'believes', 'expects', 'intends', 'anticipates' or similar
expressions identify forward-looking statements. The forward-looking statements
involve risks and uncertainties that could cause actual results to differ
materially from those expressed in the forward-looking statements. Many of these
risks and uncertainties relate to factors that are beyond the Company's ability
to control or estimate precisely, such as future market conditions and the
behaviours of other market participants, and therefore undue reliance should not
be placed on such statements. The directors of Avon Rubber assume no obligation
and do not intend to update these forward-looking statements, except as required
pursuant to applicable law.
Overview
The Board of Avon Rubber announced today, along with its interim results for the
six months ended 31 March 2006, that the Company has entered into a conditional
agreement to sell Avon Automotive to Petrol Automotive Holdings Inc. (the
'Purchaser'), a company established and controlled by Red Diamond Capital, L.P.
('RDC') and the Management Team led by Leland Richards (the 'Disposal'). The
Disposal values Avon Automotive at £63.0 million, prior to the assumption by the
Purchaser of certain long term liabilities amounting to £4.6 million. After
working capital adjustments, taxation and transaction costs, Avon Rubber expects
to receive cash of not less than £52.1 million.
In view of the size of the Disposal relative to the Group, the Disposal is
conditional upon the approval of Shareholders. This approval is to be sought at
the Extraordinary General Meeting ('EGM') of the Company to be held on 13 June
2006 or as soon as possible thereafter, notice of which will be posted to
Shareholders shortly.
Background to and reasons for the Disposal
The focus in Avon Automotive has for some time been on improving operational
productivity, cost control and financial discipline in the face of challenging
market conditions. Whilst this strategy has led to improved results within Avon
Automotive, the Board has decided to concentrate the future direction of the
Group on its Protection and Engineered Products businesses, where the Board
believes Avon Rubber can sustain higher margins and growth.
Avon Automotive operates in a highly competitive market, supplying customers who
are considerably larger than itself. A significant feature of the market is the
expectation of annual price reductions from component suppliers. Under
International Financial Reporting Standards ('IFRS'), Avon Automotive achieved a
4.2 per cent return on sales in the six months ended 31 March 2006 and a 4.7 per
cent return in the year ended 30 September 2005, before exceptional items and
any allocation of central costs. These low margins coupled with price reductions
and increasing raw material costs have led the Group progressively to relocate
many activities to lower labour cost areas with the resultant costs of closure
in the higher labour cost areas. The Board believes this pattern is likely to
continue into the future.
The low margins also make the business vulnerable to relatively small volume
changes. Historically, Avon Automotive in North America has been predominantly a
supplier to the Big 3 automotive companies. Whilst the overall number of
vehicles sold in North America has remained at an historically high level, the
Big 3 manufacturers have lost market share and this is expected to continue.
This could result in a substantial risk to the Avon Automotive business if sales
to new domestic manufacturers cannot be grown to offset any reduction.
Whilst Avon Automotive has continued to be cash generative, it is the Board's
view that this cash generation is not sufficient to fund the combination of any
future automotive plant closures, and expansion, particularly into the growing
Chinese market, and the accelerated development and expansion in the Group's
respiratory protection activities. Accordingly, the Board reviewed the future of
the automotive business within the Group and concluded that the sale of Avon
Automotive was in the best interests of Shareholders. The Board appointed ING
Corporate Finance to determine how value may be realised for Shareholders. The
Board received a number of expressions of interest in the business, which
concluded with an approach from RDC, in conjunction with the Management Team led
by Leland Richards (Divisional Managing Director of Avon Automotive and a former
director of Avon Rubber), expressing an interest in acquiring Avon Automotive.
The discussions with RDC culminated in the Disposal announced today.
Use of proceeds and capital structure
The expected net proceeds from the Disposal of not less than £52.1 million are
required by the Group's lending banks, in the event of a disposal of this
nature, to be applied, in the first instance to reduce indebtedness resulting
from previous investments and acquisitions in respiratory protection.
The Disposal represents an opportunity to review the appropriate capital
structure for the Group. The appropriate capital structure will need to be
determined by the Board having balanced a number of important factors, including
perceived growth/acquisition opportunities (most notably in respiratory
protection), product development programmes, restructuring plans, on-going
pension obligations and distribution policy. The Board intends to update
Shareholders on this review at the time of the Group's preliminary results for
the period ending 30 September 2006.
Information on Avon Automotive
Avon Automotive is an international manufacturer of advanced polymer products,
predominantly for supply to the automotive industry.
For the year ended 30 September 2005, under IFRS, Avon Automotive generated an
operating profit before exceptional items of £8.8 million and an operating
profit after exceptional items of £2.1 million on turnover of £186.4 million. In
the six months ended 31 March 2006, under IFRS, Avon Automotive generated an
operating profit before exceptional items of £4.0 million and an operating
profit after exceptional items of £4.0 million on turnover of £96.7 million. All
operating profits stated in this paragraph are before any allocation of central
costs. As at 31 March 2006, under IFRS, Avon Automotive had net operating assets
of £48.0 million and gross assets of £93.2 million. The IFRS financial
information for Avon Automotive for the period ended 31 March 2006 and the
comparative information for the year ended 30 September 2005 and the period
ended 31 March 2005 has not been audited. Further financial information on Avon
Automotive is set out at Annex A.
Principal terms of the Disposal
Under the Sale and Purchase Agreement, which was signed on 19 May 2006, Avon
Rubber has agreed to sell, or to procure the sale of, Avon Automotive to the
Purchaser.
The value attributable to Avon Automotive is £63.0 million, on a cash and debt
free basis, subject to the assumption by the Purchaser of certain long term
liabilities relating to employee retirement medical benefits and product recall
provisions amounting in total to £4.6 million. Avon Rubber expects to receive
net proceeds of not less than £52.1 million. The net proceeds are arrived at
after estimated transaction costs (£4.0 million), taxation (£1.9 million) and
expected working capital adjustments (£0.4 million).
The Disposal, which is expected to be completed in June 2006, is conditional,
inter alia, on the approval of Shareholders at the EGM. The Sale and Purchase
Agreement will terminate automatically if this approval is not received on or
before 31 July 2006. The Purchaser is entitled to terminate the Sale and
Purchase Agreement at any time before completion where any of the warranties
given by Avon Rubber under the agreement cease to be true in all material
respects or on the occurrence of certain specified events, including the
business of Avon Automotive suffering a material adverse change.
Financial effects of the Disposal
The Disposal is expected to be earnings dilutive in the current financial year.
The Board believes that the actions and opportunities set out below provide the
opportunity for growth in the future. An unaudited pro forma statement of net
assets of the Group as at 31 March 2006 is set out at Annex B for illustrative
purposes only. At that date, the Group had consolidated net assets of £42.1
million.
As shown in that statement, the illustrative consolidated net assets of the
Group as at 31 March 2006, on a pro forma basis and adjusted to reflect the
Disposal as if completion had occurred at that date, would have been £42.1
million. It should be noted that the pro forma statement includes an amount of
£4.5 million in respect of working capital adjustments relating to the Disposal.
As noted above, the expected working capital adjustments at completion will
amount to £0.4 million. The Disposal would have had a positive cash impact of
£50.0 million (before taxation) based on the working capital position as at 31
March 2006. Based on the projected working capital at completion the Disposal is
expected to have a positive cash impact of £54.1 million before taxation and
£52.1 million after taxation.
Related party arrangements
The Avon Automotive businesses currently report to Leland Richards, Divisional
Managing Director. Following completion, Mr Richards, together with the other
members of the Avon Automotive senior management team, will remain with the
disposed businesses. Mr Richards is deemed to be a related party under the
Listing Rules so far as his involvement in the Disposal is concerned, as he has
been a director of the Company during the last 12 months prior to the date of
the transaction. As at 19 May 2006, Mr Richards held 39,534 Shares, representing
approximately 0.14 per cent of Avon Rubber's issued share capital. Mr Richards
will abstain from voting at the EGM on the resolution to approve the Disposal
and additionally has undertaken to take all reasonable steps to ensure that his
associates, where relevant, will abstain from voting on that resolution. As Mr
Richards ceased to be a director of the Company on 21 July 2005, he has not been
party to the Board's decision to proceed with the Disposal.
The Company has agreed with Mr Richards and other members of the Management Team
to make a payment on successful completion of the Disposal. As this payment is
connected with the Disposal, in the case of Mr Richards the anticipated payment
of £311,458 amounts to a related party transaction under the Listing Rules. The
transaction with Mr Richards is, however, classed as a smaller related party
transaction for the purposes of the Listing Rules. As such, the transaction with
Mr Richards does not require the consent in general meeting of the Company, but
in accordance with the Listing Rules the Company will notify the UK Listing
Authority ('UKLA') in writing of the terms of the transaction with Mr Richards
and ING Corporate Finance will confirm to the UKLA that the terms of the related
party transaction are fair and reasonable so far as Shareholders are concerned.
The Company will undertake to the UKLA in writing to include details of the
related party transaction in its next published Annual Report.
The Group - Businesses, strategy and prospects
Respiratory protection
The Board has identified respiratory protection as a major growth opportunity
for the Group. Having supplied the UK military with respirators for over 50
years, the Group won the development contract for the United States Joint
Services General Purpose Mask ('JSGPM') in 1999. This is now entering the
production phase and forms the basis for the Group's expansion in respiratory
protection.
In early 2005 the Board agreed the strategic direction for respiratory
protection and identified the additional technologies that it wished to develop
or acquire. The first of these was Self Contained Breathing Apparatus ('SCBA').
Having already made the decision to seek a disposal of Avon Automotive, the
Group acquired International Safety Instruments ('ISI') in June 2005 mainly to
bring SCBA technology into the Group. The cost of the acquisition was £12.7
million and ISI is performing strongly, producing a consistent level of
earnings. In addition, the Group has acquired the technology associated with the
design and manufacture of the filters for the JSGPM respirators and is investing
in production capability to manufacture a range of respiratory protection
filters, the first of which are now being produced. The Group has also invested
in the development of an escape hood which is designed to give 20 minutes
Chemical, Biological, Radiological and Nuclear ('CBRN') protection. Sales of
this product are expected to start in the second half of this financial year. In
order to develop a range of products to enable the Group to grow its respiratory
protection business, ongoing investment in product development will be necessary
and, in due course, consideration will be given to the acquisition of
technologies and other businesses.
Non protection business
In addition to the respiratory protection business, the Group will maintain its
existing operations primarily in the dairy, aerosol gaskets and engineered
fabrications markets. The dairy market is served from Hi-Life, Wisconsin, USA
and Hampton Park West, UK. The principal product offering from both sites for
this market is milking machine liners. Aerosol gaskets are manufactured at
Hampton Park West. Avon Engineered Fabrications based in Picayune, Mississippi,
USA supplies skirts for air cushioned vehicles and portable storage tanks for
fuel and water.
Strategy
The Group has a number of well established businesses that are operating
effectively, producing consistent levels of profit and generating cash. The
Group also has significant growth opportunities, particularly in the area of
respiratory protection and, in the immediate future, the business will require
investment to grow and develop a broader product offering. Additionally, the UK
operations offer the opportunity of substantially improved performance. These
businesses have underperformed and actions are being taken to bring them back to
profitability.
The established businesses include the North American dairy business and ISI,
which have both performed strongly, and Avon Engineered Fabrications, which has
experienced substantial growth. All of these businesses are generating
consistent levels of earnings and the Board would expect this to continue.
The major growth opportunity is in respiratory protection. The Group has a long
history in providing respiratory protection, particularly to the military
market. The Group has been awarded the contract to supply the new US military
respirator and production has already started. A facility to manufacture filters
is being established in Cadillac, Michigan, alongside the manufacturing
operation for the respirator. The Board expects sales to the US Department of
Defense to grow significantly over the coming months. This will form the base
for the Group to be able to address other military and homeland security
markets. In addition, sales of the new escape hood are expected to start before
the end of the current financial year. There are further new products being
developed in the area of respiratory protection and the Board would expect to
see growth continuing in future years. The contractual nature of these sales
will result in a proportion of the growth being in large discrete contracts. In
order to smooth the various market provisioning cycles the Group is targeting
not only military but also the fire (through ISI), homeland security,
industrial, law enforcement and medical markets.
The Group has some underperforming businesses, particularly in the UK. The Board
is taking steps to improve the performance of its UK operations near Melksham
and a proposed reduction in the workforce has been announced today. The UK
mixing facility is currently operating at a loss and actions are being taken to
eliminate this. Both of these areas, whilst not offering significant scope for
top-line growth, offer the opportunity for meaningful margin improvement. The
reduced size of the Group will necessitate a reduction in corporate overheads.
Some of these cost reductions were implemented last July in advance of the
disposal but further reductions will be necessary and will be announced in due
course.
Outlook
The Disposal signals a significant strategic advance for the Group, allowing
Avon Rubber to focus on the high growth potential the Board has identified for
the Group's respiratory protection products. Avon Rubber will continue to
develop its strong market positions in dairy, aerosol gaskets and engineered
fabrications. This combination of established businesses and growth
opportunities provides a balanced portfolio of business activities for the
future.
The Group is targeting respiratory protection as its major growth area,
particularly related in the short term to the new US military respirator and
associated filters, and an escape hood which provides emergency protection from
CBRN threats. Longer term, the Group has an exciting range of new products being
developed and will explore appropriate acquisitions to enhance its technologies.
Avon Rubber's recent acquisition, ISI, together with the North American dairy
business and the engineered fabrications business in Mississippi are operating
in line with the Board's expectations and delivering consistent levels of
earnings. The Board is taking steps to improve the performance of the continuing
UK operations. The expected growth from respiratory protection will build on
this foundation.
The Board is excited about the opportunity to pursue its planned strategic
direction and is confident of the future opportunities for growth of the
continuing businesses as this strategy is implemented.
Expected Timetable of Principal Events
Latest time and date for receipt of Forms of Proxy 48 hours prior to the EGM
Extraordinary General Meeting 10 a.m. on 13 June 2006 or shortly thereafter
Expected date of completion of the Disposal 23 June 2006
For further information:
Avon Rubber p.l.c. 020 7067 0700
Terry Stead, Chief Executive (until 2.00pm)
Peter Slabbert, Finance Director
ING Corporate Finance 020 7767 1000
Simon Newton
Vinesh Karia
Weber Shandwick Square Mile 020 7067 0700
Richard Hews
Rachel Taylor
Stephanie Badjonat
ING Corporate Finance (the corporate finance division of ING Bank N.V., London
Branch), which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Avon Rubber and no one
else in connection with the Disposal and the associated related party
arrangements and will not be responsible to anyone other than Avon Rubber for
providing the protections afforded to clients of ING Bank N.V., London Branch or
providing advice in relation to the Disposal and the associated related party
arrangements, or any other matter referred to in this announcement.
This announcement is not intended to and does not constitute, or form any part
of, an offer to sell or an invitation to purchase any securities or the
solicitation of any vote or approval in any jurisdiction pursuant to the
Disposal and the associated related party arrangements or otherwise. Persons who
are not resident in the United Kingdom, or who are subject to the laws of any
jurisdiction other than the United Kingdom, should inform themselves about, and
observe, any applicable legal and regulatory requirements.
This announcement, including information included or incorporated by reference
in this announcement, may contain 'forward-looking statements' concerning the
Disposal and the continuing Group. Generally, the words 'will', 'may', 'should',
'continue', 'believes', 'expects', 'intends', 'anticipates' or similar
expressions identify forward-looking statements. The forward-looking statements
involve risks and uncertainties that could cause actual results to differ
materially from those expressed in the forward-looking statements. Many of these
risks and uncertainties relate to factors that are beyond the Company's ability
to control or estimate precisely, such as future market conditions and the
behaviours of other market participants, and therefore undue reliance should not
be placed on such statements. The directors of Avon Rubber assume no obligation
and do not intend to update these forward-looking statements, except as required
pursuant to applicable law.
Annex A
FINANCIAL INFORMATION ON AVON AUTOMOTIVE
1. Nature of financial information
The following financial information relating to the entities which make up Avon
Automotive has been extracted without material adjustment from the consolidation
schedules which support the interim financial statements of Avon Rubber for the
six months ended 31 March 2006 and 31 March 2005 and the financial statements of
Avon Rubber for the three years ended 30 September 2003, 30 September 2004, and
30 September 2005.
The financial information contained in sections 2 and 3 of this Annex A does not
constitute statutory accounts for any company within the meaning of Section 240
of the Companies Act, 1985 (as amended) ('Act'). The statutory accounts for Avon
Rubber in respect of each of the last three financial years have been delivered
to the Registrar of Companies.
The auditors' reports in respect of those statutory accounts for the three years
ended 30 September 2003, 30 September 2004 and 30 September 2005 were
unqualified and did not contain statements under Section 237(2) or (3) of the
Act. PricewaterhouseCoopers LLP was the auditor of Avon Rubber in respect of the
three years ended 30 September 2003, 30 September 2004 and 30 September 2005.
The audited financial information on Avon Automotive has been prepared under
United Kingdom Generally Accepted Accounting Principles ('UK GAAP') using the
accounting policies set out in the respective Annual Reports of Avon Rubber for
the years ended 30 September 2003, 30 September 2004 and 30 September 2005.
The unaudited financial information on Avon Automotive for the year ended 30
September 2005 and the six months ended 31 March 2005 and 31 March 2006 has been
prepared on the basis of the recognition and measurement requirements of IFRS
and International Accounting Standards currently in issue that either are
adopted by the EU and will be effective (or available for early adoption) at 30
September 2006 or are expected to be adopted and effective (or available for
early adoption) at 30 September 2006, being Avon Rubber's first annual reporting
date at which it is required to use accounting standards adopted by the EU.
Based on these recognition and measurement requirements, management has made
assumptions about the accounting policies expected to be applied when Avon
Rubber's first annual financial statements are prepared in accordance with
accounting standards adopted by the EU for the year ending 30 September 2006.
The unaudited financial information on Avon Automotive set out in sections 2 and
3 of this Annex A is included in the Group's Interim Results for the six months
ended 31 March 2006, announced today.
Some entities within the Group include both Automotive and non Automotive
operations. Avon Rubber did not allocate the interest costs of such entities
between these segments, and does not consider that a meaningful allocation can
be produced. In addition it is not possible to provide a meaningful allocation
of tax balances nor other finance income.
2. Profit and loss accounts
IFRS UK GAAP
------------------ ------------------
Six months ended Year ended Year ended
31 March 30 September 30 September
------------------ ------------- --------------
2006 2005 2005 2005 2004 2003
Unaudited Unaudited Unaudited Audited Audited Audited
---------- ---------- ---------- ---------- ---------- ----------
£000 £000 £000 £000 £000 £000
Turnover 96,702 90,372 186,391 186,391 177,289 181,781
Cost of sales (85,587) (80,547) (166,127) (166,127) (156,831) (156,267)
---------- ---------- ---------- ---------- ---------- ----------
Gross profit 11,115 9,825 20,264 20,264 20,458 25,514
Net operating expenses (7,072) (6,590) (11,463) (11,497) (12,799) (17,794)
---------- ---------- ---------- ---------- ---------- ----------
Operating profit
profit before
exceptional items 4,043 3,235 8,801 8,767 7,659 7,720
Exceptional items - (1,760) (6,734) (6,734) - -
---------- ---------- ---------- ---------- ---------- ----------
Total operating
profit 4,043 1,475 2,067 2,033 7,659 7,720
========== ========== ========== ========== ========== ==========
3. Balance sheets
IFRS
-----------------------
As at As at
31 March 30 September
--------------------------- ------------
2006 2005 2005
------ ------ -------
Unaudited Unaudited Unaudited
----------- ----------- ------------
£000 £000 £000
ASSETS
Non-current assets
Goodwill - 10,270 10,078
Intangible assets 5,282 5,715 6,072
Property plant and equipment 34,421 41,351 40,639
Investments accounted for using the
equity method 146 74 146
Deferred tax asset 708 512 750
---------- ----------- ------------
40,557 57,922 57,685
Current assets
Inventories 14,336 14,852 14,559
Trade and other receivables 38,289 37,708 40,382
Cash and cash equivalents - - -
----------- ----------- ------------
52,625 52,560 54,941
----------- ----------- ------------
Total assets 93,182 110,482 112,626
----------- ----------- ------------
LIABILITIES
Current liabilities
Financial liabilities - - 2
Trade and other payables 36,594 33,642 41,021
Current tax liabilities 338 257 196
----------- ----------- ------------
36,932 33,899 41,219
Net current assets 15,693 18,661 13,722
Non current liabilities
Financial liabilities - - -
Deferred tax liability 1,487 996 1,460
Retirement benefit liability 5,048 2,396 5,301
Provisions 1,682 3,574 2,324
----------- ----------- ------------
8,217 6,966 9,085
Total liabilities 45,149 40,865 50,304
----------- ----------- ------------
NET ASSETS 48,033 69,617 62,322
=========== =========== ============
Annex B
PRO FORMA STATEMENT OF NET ASSETS
The following unaudited pro forma statement of net assets of the continuing
Group has been prepared under IFRS for illustrative purposes only to show how
the Disposal might have affected the net assets of the Group if it had occurred
on 31 March 2006. Because of its nature, the pro forma statement addresses a
hypothetical situation and does not, therefore, represent the continuing Group's
actual financial position or results.
Adjustments
-------------------------
Group(1) Avon Disposal(3) Use of Pro forma(5)
Automotive(2) proceeds(4)
------------ ------------ ------------ ------------ ------------
£000 £000 £000 £000 £000
ASSETS
Non-current assets
Goodwill 6,338 - - - 6,338
Intangible assets 10,456 - - - 10,456
Property, plant and
equipment 31,613 - - - 31,613
Investments accounted
for using the equity
method - - - - -
Trade and other
receivables 597 - - - 597
Deferred tax asset 2,620 - - - 2,620
------------ ------------ ------------ ------------ ------------
51,624 - - - 51,624
------------ ------------ ------------ ------------ ------------
Current assets
Inventories 9,072 - - - 9,072
Trade and
other receivables 16,492 - - - 16,492
Cash and cash
equivalents 7,808 - 49,977 (49,977) 7,808
------------ ------------ ------------ ------------ ------------
33,372 - 49,977 (49,977) 33,372
Assets classified as
held for sale 93,182 (93,182) - - -
------------ ------------ ------------ ------------ ------------
126,554 (93,182) 49,977 (49,977) 33,372
------------ ------------ ------------ ------------ ------------
Total assets 178,178 (93,182) 49,977 (49,977) 84,996
------------ ------------ ------------ ------------ ------------
LIABILITIES
Current liabilities
Financial liabilities 44,053 - - (44,053) -
Trade and other 12,935 - - - 12,935
payables
Current tax liabilities 3,008 - 1,944 - 4,952
------------ ------------ ------------ ------------ ------------
59,996 - 1,944 (44,053) 17,887
Liabilities directly
associated with assets
classified as held for
sale 45,149 (45,149) - - -
------------ ------------ ------------ ------------ ------------
105,145 (45,149) 1,944 (44,053) 17,887
------------ ------------ ------------ ------------ ------------
Net current
assets/(liabilities) 21,409 (48,033) 48,033 (5,924) 15,485
Non-current liabilities
Financial liabilities 20,246 - - (5,924) 14,322
Deferred tax
liabilities 1,682 - - - 1,682
Other non-current
liabilities 1,153 - - - 1,153
Retirement benefit
liability 4,952 - - - 4,952
Provisions 2,879 - - 2,879
------------ ------------ ------------ ------------ ------------
30,912 - (5,924) 24,988
------------ ------------ ------------ ------------ ------------
Total liabilities 136,057 (45,149) 1,944 (49,977) 42,875
------------ ------------ ------------ ------------ ------------
Net assets 42,121 (48,033) 48,033 - 42,121
============ ============ ============ ============ ============
Notes:
(1) The net assets of the Group as at 31 March 2006 have been extracted without
material adjustment from the unaudited Interim Results of Avon Rubber for the
six months ended 31 March 2006.
(2) The net assets of Avon Automotive as at 31 March 2006 have been extracted
without material adjustment from the financial information on Avon Automotive
set out in Annex A. In accordance with IFRS 5 'Non-current assets held for sale
and discontinued operations', in the balance sheet at 31 March 2006 in Avon
Rubber's interim statement of results for the six months then ended, all assets
of Avon Automotive are shown in the single line 'assets classified as held for
sale' and all liabilities of Avon Automotive are shown in the single line
'liabilities directly associated with assets classified as held for sale'. The
adjustment is therefore made against those line items.
(3) The Disposal adjustments comprise:
(a) an adjustment to cash of £49,977,000, representing:
£'000
---------
Gross cash proceeds 63,000
Deduction in respect of assumed long term
liabilities (4,573)
Working capital adjustment, calculated based on Avon
Automotive's actual working capital at 31 March 2006
(see note (5)) (4,450)
Transaction costs (4,000)
---------
49,977
=========
(b) an adjustment to current tax liabilities of £1,944,000, representing the tax
payable on the Disposal.
(4) The net proceeds are used to repay outstanding debt.
(5) The actual working capital adjustment will be dependent on the level of Avon
Automotive's working capital at Completion. Based on the expected movement in
Avon Automotive's working capital balances between 31 March 2006 and Completion,
it is expected that the actual cash received at Completion will be higher than
that shown in this pro forma net asset statement.
This information is provided by RNS
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