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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