Avon Rubber falls into loss, will sell engineered fabrications unit

ERJ staff report (DS)

London -- Avon Rubber plc reported a net loss of £19.5 million (euro 23.2 million) for the 12 months to September 2008, compared with a small profit of £1.1 million a year ago. Sales were up by over 10 percent at £54.6 million (from £48.7 million), but the company made an operating loss of £4.1 million pre-exceptionals, which translated to £12.6 million loss after exceptionals.

In an effort to reduce debt levels, the company intends to sell its US Engineered Fabrications business

In its statement to investors, Avon said, "2008 proved to be a difficult year for the Group. Whilst our dairy business remained strong, the transition to full rate production in our new US respirator facility in Cadillac, Michigan has been a challenging exercise with higher than expected costs. Markets for non military respiratory protection products have also been weaker than expected and we experienced delays in winning new long term contracts at our Engineered Fabrications business.

Avon said, "Our Engineered Fabrications business, which is classified as discontinued and held for sale at 30 September 2008, had a difficult year as the award of a major fuel storage tank contract by the DoD was delayed. This contract was finally awarded in August with an initial value of approximately $10m for delivery in financial year 2009."

The company added that its transition from general rubber goods maker to specialist in the fields of defence and dairy is now complete.

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Press release from Avon Rubber