Trading Update

Avon Rubber PLC 02 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 frequency of market reporting and the significant changes in the Group recently, the Company is issuing this update in respect of the half year ending on 31 March 2007. Protection We have made significant progress in our new M50 respirator and filter production facility in Cadillac Michigan. The Low Rate Initial Production order (LRIP) for the US Department of Defense has been successfully completed and, as indicated in the Chairman's AGM statement of 25 January 2007, we have received follow on orders. We experienced some excess cost in delivering the LRIP and as a result have made changes to the organisation to address this. We are already seeing the benefits of these changes. We remain confident that further orders will be received enabling us to continue production at current levels for the remainder of the financial year. In our AGM statement we noted that demand at ISI has continued to be lower than expected due to delayed release of federal funding grants. This has continued to be the case despite grants starting to be released in late 2006. We believe that some of the delay in utilising these grants may be due to fire departments waiting for the introduction of new National Fire Protection Association (NFPA) standards for breathing apparatus, effective from 31 August 2007. We still expect some improvement in performance from ISI in the second half, but at a slower rate than previously anticipated. Despite significant sales to the National Health Service, we have only seen low volumes of sales of our new Rapid Escape Hood to law enforcement agencies. Changes in Government procurement arrangements and budget allocations have delayed the expected subsequent high volume demand. The resulting shortfalls have, however, been offset by continuing strong demand for our legacy S10 and FM12 respirators. Dairy Our dairy rubberware business is performing to expectations. In North America we have maintained our strong market position. In Europe sales have grown particularly in the higher margin aftermarket business. We also remain focused on identifying and benefiting from new geographic markets for these products. Other Businesses Our Engineered Fabrications business in the USA has continued to grow sales and improve operational performance with an expectation that this will continue. Progress in our UK based Aerosol gaskets operation has however been limited by the effect of the weaker US dollar which will also have an impact on the translation of our North American earnings. Our expectation of a return to profitability in the first half year remains unchanged. This would represent a significantly improved result compared to the £3.3 million loss incurred by our continuing businesses in the second half of 2006. As we noted in the AGM statement, our short-term challenge is predicting the timing and rate of growth of the respiratory protection business. However, we remain confident that this area represents an opportunity for exciting growth in both the near future and longer term. -- ENDS -- For further enquiries please contact: Avon Rubber p.l.c. 01225 896831 Terry Stead, Chief Executive Peter Slabbert, Group Finance Director Weber Shandwick Financial 020 7067 0700 Richard Hews Rachel Taylor 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. The Group is currently capitalised at approximately £51 million. This information is provided by RNS The company news service from the London Stock Exchange
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