Restructuring/Trading Update

Avon Rubber PLC 21 July 2005 21 July 2005 Avon Rubber p.l.c. RESTRUCTURING AND TRADING UPDATE Restructuring and Board changes ------------------------------- Following the appointment of Terry Stead as Chief Executive of Avon Rubber p.l.c., the Board has conducted a review of the structure and management of the Group. The Board has concluded that the Group will operate more effectively by reducing central management, with as many functions as possible devolved to the businesses. The new management structure will result in the elimination of the current divisional structure which will lead to a significant reduction in costs. Lee Richards will continue to head the Avon Automotive business. All the other businesses will report to Jonty Palmer who retains his responsibility for business development, particularly focusing on the development of the Group's protection activities. Both Lee Richards and Jonty Palmer will report to Terry Stead. The Board of the Group will comprise the Chairman, two independent Non Executive Directors, the Chief Executive and the Finance Director. As previously announced Steve Willcox, the former Chief Executive, is retiring and will be leaving the Group at the end of September. Steve Stone, currently Managing Director of Technical Products, has decided to take early retirement at the end of August 2005. He has agreed to make himself available to the company on a consultancy basis so that his wealth of technical knowledge is not lost. Lee Richards has agreed to step down from the Board but will retain his executive responsibilities. Eric Priestley, the deputy Chairman, will retire from the Board at the time of the AGM in January 2006. It is expected that the annual savings from the restructuring will be in excess of £2.5 million. The savings should start from the end of August this year and there will be a one off exceptional charge of about £1 million in order to implement these cost reductions. These savings will be incremental to the savings arising from the creation of a single global automotive business. Trading update -------------- At the time of our interim announcement in May we thought that there could be a softening in Automotive markets, particularly affecting larger vehicles produced by the traditional North American manufacturers. This has happened and, coupled with increased material prices and continuing competitive pressure means that we now expect the profit in the second half of the year to be lower than in the first half for our Automotive business, despite the expected growth being sustained in Orizaba, Mexico. We also noted in our interim statement that we expected to see improved sales of respirators and flexible storage tanks in the second half year. In July we received Chemical Biological Radiological and Nuclear (CBRN) certification from the National Institute of Safety and Health (NIOSH) for our FM12 respirator. This will allow us to sell this product to the industrial and homeland security markets in North America. However, as the approval was obtained late in our financial year some of this year's anticipated sales may not be made until after our year end, but we still expect to make significant sales to these markets. We have seen the expected strong demand for our new flexible storage tanks resulting in new orders. It is taking some time to achieve the increased rate of manufacture, but we expect to exit the year meeting the increasing demand in this area. < ends > Contact Information: Avon Rubber p.l.c. 01225 861100 Terry Stead, Chief Executive Peter Slabbert, Finance Director Weber Shandwick Square Mile 020 7067 0700 Richard Hews / 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 £55 million. Avon is a significant supplier to the world's automotive, engineering, dairy and defence markets - manufacturing high performance elastomer products. This information is provided by RNS The company news service from the London Stock Exchange
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